Friday, July 31, 2009
I don't think we should have a "free lunch" system where millions of Americans have no financial stake in their government. At the same time, with sales taxes increasing, it's hard to argue the middle class and poor are getting a "free lunch."
It would be more fair to see what percentage of all taxes--state, local, and federal--are paid by the top 10% rather than just income taxes. According to the WSJ, the top 1% of earners pay 26% of all federal taxes. See here. Given the income and wealth disparity in this country, the 26% figure does not shock my conscience--in fact, it seems more on the low than the high side. (Update: the income tax is less than half of federal taxes and only one-fifth of taxes at all levels of government.)
Mankiw's cited statistics show that our income taxation system is inefficient and non-diversified. Any entity that relies on such a small percentage of its "customer" base for 40% of its "profits" will soon have problems. Rather than feel sorry for the super-rich, we should realize that income taxes are volatile and inconsistent sources of revenue. By relying on such a volatile source of revenue, the government isn't doing us any favors.
Mankiw's post implicitly contends that the rich have never had it worse--their 40% contribution is "the highest percentage in modern history," he says. This increased burden could mean two things: one, the rich are getting bilked; and/or two, the recession has hit the middle class and poor harder than the rich, so they are getting smaller slices of the income pie and paying less taxes as a result of receiving less income. I'm going with Door #2. I am disappointed that Professor Mankiw--normally a very thorough writer--cited the Tax Foundation's statistics without properly explaining the numbers.
Overall, we should figure out how to get more paying stakeholders into the system so we diversify revenue sources and rely on more recession-resistant revenue streams.
Update: Professor Mankiw points out that "the [tax] data predate the recession." Although the recession is not factored into the tax data, the disparity in tax burden between the rich and others may still be a result of a declining middle class.
Thursday, July 30, 2009
Every time we hear the phrase “the United States of Goldman Sachs” we shake our heads in wonder. Every ninth-grader knows that the U.S. government consists of three branches. Goldman owns just one of these outright; the second we simply rent, and the third we have no interest in at all. (Note there isn’t a single former Goldman employee on the Supreme Court.)
Devastatingly funny, isn't it?
Wednesday, July 29, 2009
During the Al-Haramain case you wrote a response to a government brief that you were not allowed to see. How does one go about doing that?
It was quite a challenge. It wasn't just that we had to speculate as to what might be in the secret DOJ brief; the conditions under which we wrote our secret response were onerous, approaching the bizarre: We were required to write the brief under guard in the U.S. Attorney's office in San Francisco; we were forbidden from preparing any notes for the brief-writing session; the DOJ retained sole possession of the brief we produced; and the DOJ has refused to allow us to review the brief since we wrote it. Litigation doesn't get any weirder than that.Unbelievable stuff. Sounds like something out of a Soviet novel, doesn't it?
Mr. Eisenberg mentions one of his favorite authors, Jerzy Kosinski. Mr. Kosinksi's book, Being There, was adapted into a very good film by the same name. I had seen the film but was unaware of Mr. Kosinski's connection to it. If you haven't seen the film Being There, I highly recommend it. Peter Sellers plays the main character in the film.
Tuesday, July 28, 2009
1. What is the point of the 4th Amendment if the government can tell you how to behave in your own home even after it has verified that it is your home; you have not committed a crime; and you have a legal right to be there?
2. Prof. Gates was arrested on his own front porch. The officer who arrested him had already verified his ID and appears to have been walking outside. If Prof. Gates began yelling at the police officer and belligerently demanded the officer's badge number, whose job was it to walk away and de-escalate the situation? The Harvard professor in his own home, or the police officer whose salary is being paid by the Harvard professor?
3. As soon as the police officer verified Prof. Gates' ID and realized he was the proper homeowner, did Prof. Gates have the legal right to tell the police officer to leave his property? If yes, then as a legal principle, what does it matter the choice of words that Prof. Gates used to ask the officer to leave his home?
4. Is it a crime to be verbally belligerent to a police officer in your own home when the police officer has already verified that no crime is taking place in the home? Is there ever such a thing as "contempt of cop"?
Here is the best article I've read so far on the Gates-Crowley affair (Robin Wells, July 27, 2009):
I believe that the treatment of Professor Gates was unjust and unprofessional. Yes, he was belligerent to a police officer. But that is no crime, and nowhere has Officer Crowley shown that there was any chance of a crime being committed, confirmed by the Cambridge Police Department's quick decision to drop the charges against Professor Gates. Police officers are trained to be professionals, and a professional would have recognized that an obstreperous sexagenarian who walks with a cane standing in his own house and faced with a phalanx of armed police officers is no threat...
[But] The hard truth that Professor Gates needs to hear is that he is the one who handed over his power to Officer Crowley. Letting his agitation get the better of him, Gates lost the ability to shape the outcome of the encounter and set up his own victimization by a poorly trained police officer.
Amen, sister. Basically, the police officer was unprofessional and did not handle the situation properly, but Prof. Gates could have saved himself a lot of trouble by being the bigger man. Professor Gates might not have realized he had to show the officer his state-issued ID, not just his Harvard-issued ID.
In any case, when a police officer needs to call backup to handle a senior citizen Harvard professor, something's amiss. As President Obama stated, "I think...that you probably don't need to handcuff a guy, a middle-aged man who uses a cane, who is in his own home."
Bonus: Here are 9th Circuit Judge Alex Kosinski's comments on free speech, which apply to Gates' case:
See Duran v. City of Douglas (1990): [T]he First Amendment protects a significant amount of verbal criticism and challenge directed at police officers." [Houston v. Hill, 482 U.S. 451 at 461] The freedom of individuals to oppose or challenge police action verbally without thereby risking arrest is one important characteristic by which we distinguish ourselves from a police state. Id. at 462-63, 107 S.Ct. at 2510. Thus, while police, no less than anyone else, may resent having obscene words and gestures directed at them, they may not exercise the awesome power at their disposal to punish individuals for conduct that is not merely lawful, but protected by the First Amendment.
Re: criticism of judges, see Standing Committee of Discipline v. Yagman quoting Bridges v. California, 314 U.S. 252, 263 (1941):
"The assumption that respect for the judiciary can be won by shielding judges from published criticism wrongly appraises the character of American public opinion. For it is a prized American privilege to speak one's mind, although not always with perfect good taste, on all public institutions. And an enforced silence, however limited, solely in the name of preserving the dignity of the bench, would probably engender resentment, suspicion, and contempt much more than it would enhance respect."
Judge Kosinski is often named as one of the potential candidates for the U.S. Supreme Court.
1. The question isn't whether Gates could have acted better under the circumstances--the question is what a government worker should do in someone else's house once he verifies there is no threat, no crime, and the owner wants him out.
2. Gates may have been outsmarted by the police officer. The officer probably couldn't arrest Gates inside his own home for "disorderly conduct," so he may have beckoned Gates outside, where he could plausibly argue that the public was affected or endangered by Gates' conduct.
Patrick S. says:
Based upon the holdings in the MA cases below, Dr. Gates' conduct did not even fall under the disorderly conduct statute. Whether this is an issue of the cop arresting him anyway or whether the cops were not properly trained on what is "disorderly conduct" in MA is another question:
In Commonwealth v. Mallahan, 72 Mass.App.Ct. 1103, 889 N.E.2d 77 (2008), a decision rendered last year, an appeals court held that a person who launched into an angry, profanity-laced tirade against a police officer in front of spectators could not be convicted of disorderly conduct.
In Commonwealth v. Lopiano, (2004) 805 N.E.2d 522, 60 Mass.App.Ct. 723 (2004), an appeals court held it was not disorderly conduct for a person who angrily yelled at an officer that his civil rights were being violated. [In this case, according to the officer, Defendant was "yelling at me, you're violating my civil rights, then he began yelling at Ms. Carins, why are you doing this to me, you'll never go through with this."]
The Massachusetts statute defining "disorderly conduct" used to have a provision that made it illegal to make "unreasonable noise or offensively coarse utterance, gesture or display," or to address "abusive language to any person present." Yet the courts have interpreted that provision to violate the Massachusetts Constitution's guarantee of freedom of speech. So police cannot lawfully arrest a person for hurling abusive language at an officer.
[See more law-related discussion here and Commonwealth v Feigenbaum, 404 Mass. 471 (1989)]
Monday, July 27, 2009
On the substance of the altercation I do not know the details but some time ago we decided, for better or worse, to give policemen a lot of discretion in intimidating individuals, including innocent individuals and especially African-Americans. I don't think we chose an optimum but it is disingenuous to be suddenly shocked by what happened.
I agree wholeheartedly. The real issue is the proper balance between individual rights and police power. Since 9/11, we've elevated the status of law enforcement personnel from well-compensated civil servants to heroes. As a result, many Americans believe police can do no wrong, and citizens must be highly respectful to law enforcement at all times--even in their own homes. Prof. Gates' arrest should have been an opportunity to re-examine this shift in values; however, by focusing on race rather than how police ought to behave in another person's home, we've lost a chance to discuss a topic important to all Americans.
Despite the high profile of polemicists such as Lou Dobbs and Michael Savage, America has been mostly welcoming to this latest immigration wave. You don't see "Latinos Need Not Apply" or "No Mexicans" signs posted on public buildings the way you did with the Italians and the Irish, two groups who actually were disproportionately likely to turn to crime. The implication makes sense: An immigrant group's propensity for criminality may be partly determined by how they're received in their new country.
"Look at Arab-Americans in the Midwest, especially in the Detroit area," Levin says. "The U.S. and Canada have traditionally been very willing to welcome and integrate them. They're a success story, with high average incomes and very little crime. That's not the case in Europe. Countries like France and Germany are openly hostile to Arabs. They marginalize them. And they've seen waves of crime and rioting."
I love the common sense.
Sunday, July 26, 2009
1. "The entire essence of America is the hope to first make money--then make money with money--then make lots of money with lots of money." -- Paul Erdman
2. Heard on the street: "TARP = affirmative action for white people." [TARP was the name of a federal government program that bailed out the banking sector in the United States around 2008]
3. On the Henry Louis Gates arrest: "Honestly, it's not the local cops we have to worry about...the local SWAT team that's been drinking the Homeland Security Kool-Aid rampaging through a house on a bad tip is hella more worrisome than a local beat cop." -- Jason K.
4. "Of those who deplore trapping, he [a Maine resident] says, 'When someone decides to take up reformin', they first find somethin' that won't interfere with their style of living, and then brother, can they reform!'" [Nat'l Geographic, pp. 733, June 1977]
5. Chuck Thompson: "If there were a fundamental principle that once separated America from the rest of the world, I'd nominate institutional integrity. More simply, public honesty. I'm not suggesting that dishonesty isn't readily found in every civilization, that a Golden Age of American honor ever existed...Nor am I parading myself as a paragon of virtue. We all lie, to some degree, usually in petty ways, for the sake of discretion or keeping the peace or perhaps on occasion simply because it's the most expedient means available to get what we want. Still, lying and cheating--perhaps other than to avoid hurting someone's feelings--has never been openly accepted or condoned in the United States, much less celebrated as a 'genius' operational tactic (when done with Rovian finesse) from the boardroom to the courtroom. At least, not until recently....Worse, Americans seem to be reveling the descent...American society is no accident; it didn't evolve by providential decree; its success wasn't inevitable...Americans have historically understood that to create a country in which half the world aspires to live, the first prerequisite is the integrity of its public and private institutions. That's the foundation upon which the country was assembled and its illustrious future once determined...What's being overlooked in the rush to save the planet, however, is that we're also pissing away a social gift as great as any people in history have been bequeathed. And if we don't resist the seduction of the seemingly inevitable road in front of us, it won't matter how much fossil fuel we stop burning, we'll fail to preserve the part of us that mattered most in the first place." [To HellHoles and Back, pp. 309 et al, paperback, Henry Holt and Company]
6. "Sure, up there [New York City] black and white work side by side. But at night the black goes home to his ghetto and the white to his suburb. Here in the South we've been living together for 250 years, talking to each other every day. That gives you something solid to build on." -- Mayor Johnny L. Ford [National Geographic (October 1975), pp. 569]
"It struck me as notably ironic that Southerners could despise blacks so bitterly and yet live comfortably alongside them, while in the North people by and large did not mind blacks, even respected them as humans and wished them every success, just so long as they didn't have to mingle with them too freely." -- Bill Bryson [The Lost Continent, paperback, pp. 63 (1989)]
7. Graphic titled "The Middle East: where the oil is." Graphic shows total world [oil] reserves in Middle East as 444 billion barrels [62%] and remainder of world as 272 billion barrels. [National Geographic (October 1975), pp. 500]
As of January 1, 2011, the Middle East had 695.4 billion barrels of oil, which is around 47% of the world's reserves. See here. (U.S. Energy Information Administration)
8. "[T]he secret of America: a nation of people with the fresh memory of old traditions who dared to explore new frontiers." -- President John F. Kennedy [from National Geographic (January 1975), pp. 109]
9. The fundamental problem with creating jobs in first-world countries--as long as other countries are able to produce similar goods or services--is that capital is mobile while labor is not. Still, trade deficits don't help, and since countries have competing goals, true cooperation is difficult. Though we are all linked, only minimal rather than optimal cooperation appears necessary to maintain the existing system. -- Matthew Rafat (2012)
Rather than create better metrics measuring employee performance, govs are going the other way--resorting to fear and hero worship based on outliers--to maintain and increase employment. Better individual metrics mean that govs will not be able to rely as much on social engineering or irrelevant issues to hire, fire, and demand tax revenue.
If Inspector A has 10 successful investigations while Inspector B has 2, then the gov may easily defend any off-the-job behavior of Inspector A if challenged, including social media postings. In a world without individual metrics, Inspector B prevails because the touchstone in hiring becomes non-controversy rather than merit. Voters have sensed a decline in accountability as a result of statutory interference and have opted for political incorrectness because the alternative--control through manipulating social norms--is unacceptable to most thinking people. -- Matthew Rafat (2016)
Rising prices for essential items like healthcare, education, and housing, if disconnected from wage increases or if requiring decades-long debt, change society by elevating not God, not love, not relationships, not honor, not honesty, but money above all things. This phenomenon does not mean essential items should be given for "free." Rather, it means a society will decline and fracture if it cannot use government spending and education to promote sustainable, long term objectives and truly diverse consumer choices while preventing the degradation of the individual. -- Matthew Rafat (2017)
10. "Woe unto him that buildeth his house by unrighteousness, and his chambers by wrong; that useth his neighbour's service without wages, and giveth him not for his work." -- Jeremiah 22:13
11. Justice William Brennan, FCC v. Pacifica Foundation, 438 U.S. 726 (1978), dissenting: "[I]n our land of cultural pluralism, there are many who think, act, and talk differently from the Members of this Court, and who do not share their fragile sensibilities. It is only an acute ethnocentric myopia that enables the Court to approve the censorship of communications solely because of the words they contain...[T]he Court's decision may be seen for what, in the broader perspective, it really is: another of the dominant culture's inevitable efforts to force those groups who do not share its mores to conform to its way of thinking, acting, and speaking."
12. George Carlin: Every individual set of eyes you look into gives you something, whether it's a blank wall or an infinite regress of barbershop mirrors...People are wonderful one at a time. Each of them has an entire hologram of the universe somewhere within them. But as soon as individuals begin to clump, as soon as they begin to clot, they change...Groups of three, five, ten, fifteen--suddenly we have special little hats, we have arm bands, we have a marching song, a secret handshake and a list of people we don't agree with...One of my lists once was: "People I Can Do Without." Near the top: "People who say, 'Long live Such-and-such!' and then kill someone to accomplish it.
The ideal grouping for human beings is one. With the occasional sexual visit to the lady in the next group. Temporary twosomes are fine. Once upon a time people might have been good up to ten or twelve, or one hundred or so, whatever the ideal tribal unit was. When everybody took care of everybody else's children, there were no last names, no patriarchy, no patrimony, when property was unheard of. You might have personal stuff: this is my favorite rock, I got an ax I made. But no one owns the tent, everybody belongs in that tent as long as we have our fire. What buffalo there are belong to everybody if we can kill one. Something about that is awfully compelling. But we lost it long ago.
The larger the group, the more toxic, the more of your beauty as an individual you have to surrender for the sake of group thought. And when you suspend your individual beauty you also give up a lot of your humanity. You will do things in the name of a group that you would never do on your own. Injuring, hurting, killing, drinking, are all part of it, because you've lost your identity, because you now owe your allegiance to this thing that's bigger than you are and that controls you.
It happens in police culture. You get talking with with individual cops and they're the greatest f*cking guys in the world. But you know that when they're making a domestic disturbance call in the black section of town, they're going to hit first and ask questions later. And if you happened to be there and called them on it, you'd be the enemy, right or wrong. That great f*cking guy would be gone. It's the same with military men, with corporate *ssholes, the same anywhere on earth. And by the way, America's groups are no better than anyone else's. (Last Words, 2009, hardcover, pps. 283-284)
13. Stephen Pollan and Mark Levine, Die Broke (paperback, HarperBusiness, 1997): “For you, retirement is a pyramid scheme you’ve got no chance of winning…Remember that only one generation in American history has been able to make this dream—luxurious retirement—come true. They’re doing it by drawing on five income streams. The average retiree gets 42 percent of their income from government assistance, 20 percent from their personal wealth, 20 percent from their pensions, 15 percent from current wages, and 3 percent from other sources.” (page 52)
14. "The heart wants neither coffee nor coffeehouses. The heart wants a friend. Coffee is only the excuse." -- Turkish proverb
15. "Selling is what they don't teach you at Harvard Business School. Business schools admit that their purpose is to train managers, thereby almost totally overlooking the fact that if there are no sales there is nothing to manage. This escapes a lot of newly minted MBAs, who in their desire to run a company may find sales, the techniques involved, the *art* of selling, beneath them." -- Mark McCormack, pp. 90, What They Don't Teach You at Harvard Business School (1986)
16. "I am a firm believer that capitalism is the most potent form of foreign assistance. We should consider whether some of the many billions governments now devote to social development projects would be better spent on tax credits to encourage companies to invest in poor countries. Unlike social development projects, business investment has a larger multiplier effect and usually leads to even larger, more profitable companies that follow, literally freeing people from poverty." pp. 141, Inside Coca-Cola (paperback), by Neville Isdell with David Beasley
"The secret to the Coca-Cola distribution method is that everyone along the way, from start to finish, makes a profit." (Id., pp. 220)
"Can companies like Coke, with their unequalled distribution systems, help in this [humanitarian] effort? Yes. Could they do it 'free'? Yes, but that is not a sustainable model. One that would work over the long term would be to develop a system that involves a profit for everyone in the chain." (pp. 221) "Corporations, therefore, are like any other organism: They have to operate sustainably if they are to last." (Id., pp. 222)
"China's critics fail to realize that progress is of necessity an evolutionary process. How long did it take for blacks and women to obtain the right to vote in the U.S.? It took generations, a sad commentary on history. It's unrealistic to expect China's transformation to occur overnight, as well. Isolating China won't hasten that transformation." [Id., pp. 206]
17. "Heroin landed purring at the base of his skull, and wrapped itself darkly around his nervous system, like a black cat curling up on its favorite cushion. It was as soft and rich as the throat of a wood pigeon, or the splash of sealing wax onto a page, or a handful of gems slipping from palm to palm. The way other people felt about love, he felt about heroin, and he felt about love the way other people felt about heroin: that it was a dangerous and incomprehensible waste of time." -- from Some Hope (2003), by Edward St. Aubyn
18. On corporations issuing debt, which is tax-deductible, therefore lowering their reported taxable income: "As the World's Greatest Investor, Warren Bufffet, has said, 'If you can eliminate the government as a 46 percent partner, the business will be far more valuable.'" (Michael Lewis, pp. 69-70, The Money Culture, paperback, copyright 1991, but paperback published by Norton in 2011)
On corporate debt: Ben Bernanke: "Using high leverage to improve corporate performance is much like encouraging safe driving by putting a dagger, pointed at the driver's chest, in every car's steering wheel; it may improve driving but may lead to disaster during a snowstorm." (Michael Lewis, pp. 101, The Money Culture)
19. On income inequality: MLK: A true revolution of values will soon look uneasily on the glaring contrast of poverty and wealth. With righteous indignation, it will look across the seas and see individual capitalists of the West investing huge sums of money in Asia, Africa, and South America, only to take the profits out with no concern for the social betterment of the countries, and say, “This is not just.” It will look at our alliance with the landed gentry of South America and say, “This is not just.” The Western arrogance of feeling that it has everything to teach others and nothing to learn from them is not just. (4 April 1967, in New York, "Beyond Vietnam")
20. Enrico Moretti: "The most important aspect of inequality in America today is not what happens to a few thousand tycoons. The increase in their share of wealth is certainly a problem, but not as consequential as the rapidly growing divide between the 45 million workers with a college education and the 80 million workers without one." [The New Geography of Jobs (2012), hardcover, pp. 223]
A "visa issued to a highly skilled immigrant does not necessarily mean one less job for an American citizen. On the contrary, it could mean more jobs for Americans citizens. While foreign-born workers account for 15 percent of America's labor force, they account for a third of all engineers and half of those with doctorates...immigrants are almost 30 percent more likely than nonimmigrants to start a business, and they account for one-quarter of all venture-backed public companies since 1990 and one-quarter of new high-tech firms with over $1 million in sales." [pp. 242; hardcover (2012)]
21. From The Breaks of the Game: "[Jack] Scott was a classic radical of the sixties, intense, passionate, sincere and absolutely single-minded, so pure in his convictions and so devoted to them that he always had difficulty believing others could not see what he saw, and seeing it, would not come to the same conclusions that he came to."
22. Burrough's Barbarians at the Gate (hardcover), about the 1988 RJR Nabisco takeover:
“They could devise a charter for their new company, [Ross] Johnson said. Call it PIK [payment in kind] Associates. And it would include what Johnson dubbed the three rules of Wall Street: ‘Never play by the rules. Never pay in cash. And never tell the truth.’” [pp. 489]
The times—“The Roaring Eighties”—were a new gilded age. Winning was celebrated at all costs in “the casino society,” as Felix Rohatyn once dubbed it. The investment bankers were part croupiers, part alchemists. They conjured up wild schemes, pounded out new and more outlandish computer runs to justify them, then twirled their temptations before corporate executives in a “devil dance.” [pp. 515]
23. "But the ascent of man is not made by lovable people. It's made by people who have two qualities, an immense integrity and at least a little genius." -- Jacob Bronowski (Ascent of Man, "The Hidden Structures," 1972)
24. From Steve Fraser's Every Man a Speculator (2005), hardcover:
"As early as the mid-1960s, mutual funds accounted for one-fourth the value of all transactions on the NYSE. There were 340 mutual funds in 1982. By 1998, there were 3,513. Together with pension funds run by corporations and unions, they helped transform the investment landscape...In 1984, approximately 7.5 million people participated. About 34 million people had 401(k) plans with assets of $1.7 trillion by the year 2000. At the turn of the millennium, union-managed pension funds accounted for $400 billion, and a trillion dollars moved through treasuries of public-employee pension funds...By the year 2000, the biggest institutional investors owned 60% of the country's thousand largest corporations." -- pp. 582-583
"Earlier on, when [Senator Robert] Taft lost the Republican presidential nomination to Eisenhower in 1952, he vented his general resentment against these Wall Street internationalists, claiming, 'Every Republican candidate for president since 1936 has been nominated by Chase Bank.'" -- pp. 518
"When the war [WWII] ended, the United States accounted for two-thirds of the world's industrial output. In 1950, 60 percent of the capital stock of the advanced capitalist world was American. That same year, U.S. corporations accounted for one-third of the world's total GNP." -- pp. 511
"A DJIA that registered 381 in September 1929 plummeted to 41 by the beginning of 1932. An unemployment rate of 3.2% became a grotesquely bloated 23.6%." -- pp. 415
The "Federal Trade Commission (FTC) and the Justice Department stood aside as a mania of corporate mergers excited the Market. During the [Secretary of Treasury Andrew] Mellon era [1921 to 1932], of the 1,268 mergers of seven thousand corporations, only sixty caused even a raised eyebrow and only one was actually blocked by the government. By decade's end sixty thousand families at the top of the income pyramid were worth as much as the 25 million at the bottom." -- pp. 380
"Lt. General Smedley Butler recalled: "I spent thirty-three years and four months in active military service...And during that period I spent most of my time as a high-class muscle-man for big business, for Wall Street, and the bankers...Thus, I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of a half dozen Central American republics for the benefit of Wall Street..." -- pp. 358-359
(Joseph) "Pulitzer hated [President] T.R., and the feeling was mutual." -- pp. 356 (a reminder from when journalists actually served as America's "fourth pillar")
"As early as the 1880's, [John] Hay delivered his own cold-eyed view of the state of the union: 'This is a government of the people, by the people, and for the people no longer. It is a government of corporations, by corporations, and for corporations.'" -- pp. 287
25. "Life loses momentum and direction for those who cut off the past, shun purpose, evade commitment." -- Ann Hulbert
26. Our current system requires debt (student loans, mortgages, etc.) to enter the middle class, thereby favoring the status quo and the existing affluent. Young adults can more comfortably take on debt, knowing their parents will eventually pay it off: Economist Wolff "estimated that 50 to 70% of the wealth of households under age 50 was inherited." Other prominent economists, Lawrence Summers and Laurence Kotlikoff, "using a variety of simulation techniques, estimated that as much as 80% of personal wealth came from direct inheritance or the income on inherited wealth." -- Doug Henwood, Wall Street (1998), pp. 69
[My thoughts: The idea that one must enslave oneself to the banking cartel via loans in order to reach the middle class is a new idea. It is facilitated by the establishment, including the government, to make money and to create loyalty. Think of it: you borrow from a bank or the government and transfer money to a school; the school depends on the federal government and the banks to expand through student loans and endowment increases; the government receives interest and taxes from the additional development and uses it to create jobs in schools, which leads to votes. Round and round we go, until someone realizes it's an artificial economic system unless real value or innovation is created. Sadly, 50% of students don't realize the other half has parents or grandparents paying off their student loans upon graduation, which reinforces the status quo and makes their 10 to 15 years of penury seem outwardly normal. In reality, of course, the system crushes the poor and lower middle class, who lack the benefit of inheritances and property inflation to resolve the debt load.]
"Individuals may be able to set aside money for the future, but not a society as a whole; a society guarantees its future only by real physical and social investments." -- Doug Henwood, Wall Street (1998), pp. 306
27. "How do you get that rush again? That's why bad things happen to athletes more often than with other people. They can't reach that high anymore, so they have to get it artificially, or, if they don't succeed, feel empty...That's when I have to remind myself that I really had no one to share those victories with. That's when I remember how cold the top of the mountain was." -- John McEnroe, You Cannot Be Serious, pp. 324
"Aussies, as a rule, don't tend to be especially reverent." -- John McEnroe, You Cannot Be Serious, 2002, pp. 135 [FYI: skip McEnroe's book--it's not well-written.]
28. "Under the Constitution, majority rule is not without limit...We often think of equal protection as a guarantee that the government will apply the law in an equal fashion--that it will not intentionally discriminate against minority groups. But equal protection of the laws means more than that; it also secures the right of all citizens to participate meaningfully and equally in the process through which laws are created." -- Justice Sotomayor, dissenting, Schuette v. Bamn, pp. 30 (572 U.S. __) (2014)
29. "If the UN is right and drugs account for 70 percent of organized criminal activity, then the legalization of drugs would administer by far the deadliest blow possible against transnational organized criminal networks." -- pp. 227, McMafia (2008), Misha Glenny, hardcover
"The Machine, a corrupt Democratic Party operation similar to the Daley dynasty's fiefdom in Chicago, has always governed Albany [Albany County in New York], and there was one community who had never been granted membership. 'The party appoints the judges; the party appoints the chief of police, the mayors, everyone here--the legislators all come out of the same institution...They'll tell you that they employ a lot of African-Americans in the city. What they don't tell you is that they're all picking up trash!'" -- pp. 238, McMafia (2008)
"90% of the world's commercial traffic is transported in containers on the high seas." -- McMafia (2008), pp. 339
"Corruption and organized crime are intimately linked--the former spawns the latter with a resolute determinism." -- pp. 67
"No societies are free from organized crime except for severely repressive ones (and although North Korea has undoubtedly very low levels of organized crime, its state budget is decisively dependent on the trading of narcotics to criminal syndicates in neighboring countries." -- pp. 61
"The fall of Communism and the deregulation of the international financial markets in the late 1980s triggered a huge injection of cash into the global economy...The sums involved were vast. By the mid-nineties, the foreign exchange markets alone reached a volume of trading that exceeded $1 trillion every day." -- pp. 149
"Globalization needs regulation, but everyone is reluctant to demand it for fear that it may discriminate against them." -- pp. 150
"'A government of the contractors, by the contractors, for the contractors,' is how Ishola Williams of Transparency International described the notorious rule of General Ibrahim Babangida, known in Nigeria as IBB, from the mid-eighties to the early nineties." -- pp. 170
30. "The ideal government of all reflective men, from Aristotle to Herbert Spencer, is one which lets the individual alone - one which barely escapes being no government at all." -- H.L. Mencken (Le Contrat Social, 1922)
"[I]n very early times, the law gave a remedy only for physical interference with life and property, for trespasses vi et armis. Then the ‘right to life’ served only to protect the subject from battery in its various forms; liberty meant freedom from actual restraint; and the right to property secured to the individual his lands and his cattle. Later, there came a recognition of man's spiritual nature, of his feelings and his intellect. Gradually the scope of these legal rights broadened; and now the right to life has come to mean the right to enjoy life, -- the right to be let alone." -- “The Right to Privacy,” Harvard Law Review, Warren and Louis Brandeis, 1890
"The most dangerous man, to any government, is the man who is able to think things out for himself, without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane and intolerable, and so, if he is romantic, he tries to change it." -- H.L. Mencken
31. "There were also investigations by both the SEC and the U.S. attorney's office, but it seems that Enron got lucky once again. The investigations focused on the phony transactions....concocted to shift profits from quarter to quarter, transactions that several Enron executives had encouraged and that several others, including Ken Lay, had condoned after the fact. Yet, for some reason, the government chose not to prosecute the company [in 1987]." -- pp. 24, The Smartest Guys in the Room (2003, hardcover, McLean and Elkind)
"The analysis the accountant came up with showed that [Rebecca] Mark's business was earning a mere 2% return on equity--a pathetic amount...[but] Mark's analysis showed...that the international business had been a success, producing over $1 billion of cash and earnings and making a 12% compound annual return over its history...'Figures lie, liars figure,' says one of the accountants who worked on the analysis...Yet the accountant went on to note an even more astonishing fact: viewed through their respective prisms, they were probably both right." -- The Smartest Guys in the Room (2003), hardcover, pp. 261 [The first analysis evaluated the assets based on cost, current cash flow, and current market value, whereas Mark's analysis included accounting structures designed to book earnings immediately via monetization and/or securitizations.]
32. "I love new things. I love stories. One of the great definers of life is perseverance. Life is hard. Loving people is hard. Learning to know what's important and keeping things simple seems to help me enjoy life and find the beauty in what I see." -- painter Timothy Chambers
33. “In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself.” -- James Madison, Federalist #51
34. "Let no young man choosing the law for a calling for a moment yield to the vague popular belief that lawyers are necessarily dishonest. Resolve to be honest in all events; and if, in your own judgment, you cannot be an honest lawyer, resolve to be honest without being a lawyer. Choose some other occupation." -- Abraham Lincoln
35. On movies: "These guys [movie producers and investors] make all their money on how the movie does around the world. They hope to pay their production costs with the domestic money, and the profit comes internationally. When your movie opens around the world and makes money, then you become viable to Hollywood." -- Samuel L. Jackson, interviewed by Charles Barkley in Who's Afraid of a Large Black Man? (hardcover, 2005, pp. 47)
On K-12 education: "Basically, the deal is, you've got to get a good principal who is well trained and understands that he or she has to create a culture. Kids have to feel like they're on a team. They all have to feel like they're somebody and they can make something of themselves. Whatever the barriers are to running those schools--and there will be some at the local, state, and national levels--they've got to be cleared away." -- Bill Clinton, interviewed by Charles Barkley in Who's Afraid of a Large Black Man? (hardcover, 2005, pp. 74)
"White people don't need to think about race. I told my agent the same thing. He said, 'Do you think I'm a racist?' And I said, 'Absolutely not. But when you needed to hire somebody, you hired your son, then your other son. And I understand that completely. But I've been with you for fifteen years and you've never hired a black person.' I told him that black people don't have the luxury of not thinking about race, but white people do. It doesn't affect them 99% of the time. They've not only got the access to money, but the access to power and authority...As much money as I may have, I still have to go and ask a white guy for a job. That's just the way it is." -- Charles Barkley, in Who's Afraid of a Large Black Man? (hardcover, 2005, pp. 93)
"Like George Lopez, I feel really good about being my own man. I love it when people tell me: 'I don't agree with you all the time, but I respect the fact that you say it.' That's all I want from anyone." -- Charles Barkley, Id. at 102.
"I believe if the conversation doesn't put you a little on edge, you're probably not talking about anything of great substance." Charles Barkley, Id. at 105.
"You know that tenth plague in Egypt, before pharaoh let the Jews go, was the plague of darkness. And the rabbis asked, well, what was so terrible about the plague of darkness? And the answer they gave is that people didn't recognize one another's faces. In other words, they couldn't see the humanity...and once you get to that point, it's over. When you can't recognize the humanity in another person." -- Rabbi Steven Leder, interviewed by Charles Barkley in Who's Afraid of a Large Black Man? (hardcover, 2005, pp. 123)
"They don't know if they can trust us; we don't know if we can trust them. The system teaches you not to trust other people. We don't live together, so our images are from television and newspapers. The people--black people, white people, poor people--have to band together and say our enemy is the system. That's the problem." -- Charles Barkley, Id. at 159.
On why African-Americans have been so successful in sports: "One, the playing field is even. Whether we're talking about picking cotton, prize fighting, shooting a basketball, or hitting .300 on a baseball diamond, whenever there is one set of rules, we can be champions no matter what the odds against us are. Two, the rules are public. And three, the criteria are clear. That football field is 55 yards wide, 100 yards long, 10 yards for all first downs. On a basketball court, when you shoot and that ball goes through that hoop, everybody knows it went through. Now, choosing the next president of University of Iowa or University of Michigan, that is a closed-door decision. A directorship or executive position at the county hospital, the physicians have a meeting and say, 'Let's discuss this.' The rules certainly aren't public. There might not even be any rules. We cannot win when decisions are subjective, when they're made behind closed doors. Sometimes the criteria seems to shift." -- Jesse Jackson, interviewed by Charles Barkley in Who's Afraid of a Large Black Man? (hardcover, 2005, pp. 175)
"There is a part of me that understands very clearly that the playing field is not level, and something should be done about that institutionality. Just as race was set up as a barrier, it [affirmative action] should be should be set up as a way to level the playing field. I feel that in all but one part of me. The other part of me says, 'Don't give me anything. Just don't make it [race] stand in my way.'" -- Morgan Freeman, interviewed by Mike Wilbon, in Who's Afraid of a Large Black Man? (hardcover, 2005, pp. 211)
"If you encourage people to venture beyond their natural environment and get them to interact with people they believe are different, they'll find that we have a lot more in common than we think. But silence isn't going to get it done. Ignoring the problem isn't going to get it done. Clinging to old stereotypes isn't going to get it done. Dialogue is the best place to start. Hell, it's the only place to start." -- Charles Barkley, Who's Afraid of a Large Black Man? (hardcover, 2005, pp. 236)
36. "Government exists for man, not man for government...The individual needs protection from the government itself--from the executive branch, from the legislative branch, and even from the tyranny of judges." -- Justice William O. Douglas, The Right of the People (1958), Pyramid Books, pp. 57
"Efforts have been made to place restrictions on the amount which certain groups could expend for editorializing their views, announcing them in broadcasts...The argument has been...'undue' influence...But that is only an indirect way of silencing speakers...Radio and television time should of course be apportioned so that no one group dominates the air. But apart from this, no control of utterances through control of expenditures would seem permissible." -- Id. at 19
"The only time suppression [of speech] is constitutionally justified is when speech is so closely brigaded with action that it is in essence a part of an overt act. It is not enough that the words excite people or cause unrest or disturbance." -- Id. at 34
"When the totality of an employer's course of conduct operates to coerce his employees, the fact that this conduct is evidenced in part by speech does not immunize it from regulation or prohibition. Then the employer's speech is brigaded with conduct--coercion of his employees--which the legislature has the power to prohibit." -- Id. at 35
"If there is a constitutional basis for punishing the publication of obscene literature, it must be because it is clear that the obscene publication causes anti-social conduct, not among psychopaths, but among the average of the group to which it is addressed." -- Id. at 40
"Secrecy may be a necessary handmaiden of security to a degree. Yet no nation that faces unlimited destruction can afford to be uninformed." -- Id. at 51
"We were largely the victims of the tyranny of a few who were beating the drums of fear. There is no protection against that tyranny which the law can provide. Charles W. Eliot of Harvard called it the pressure of a 'concentrated multitudinous public opinion.' ... Each generation must deal with it. The only protection is an enlightened public opinion forged by men who will stand against the mob. The antidote is more freedom of expression rather than less. The remedy is in making public opinion everybody's business and in encouraging debate and discourse on public issues. To regain the values 'of the age of debate,' as Dr. [Robert] Hutchins put it, is on the great problems of this generation. To return to Pericles and his funeral oration, 'We alone regard a man who takes no interest in public affairs, not as a harmless but as a useless character.'" -- Id. at 54-55.
"Unorthodoxy in the field of political and social ideas is no business of government. When government respects that principle, the right of the people to be let alone in their opinions and beliefs is secure." -- Id. at 73
"For acts which add up to no more than treason, he should be tried, not by the military, but by the civil courts, where he will receive the benefit of a jury trial and the special procedural safeguards erected around all trials for treason." -- Id. at 124
37. "The power to tax the exercise of a privilege is the power to control or suppress its enjoyment." -- Murdock v. Pennsylvania, 319 U.S. 105 (1943) at 112
"Judges are supposed to be men of fortitude, able to thrive in a hardy climate." -- Craig v. Harney, 331 U.S. 367 (1947) at 376
38. Uneven but excellent book in terms of advocating free markets and differentiating free markets from mercantilism: "Mercantilism can be defined as the supply and demand for monopoly rights by means of laws, regulations, subsidies, taxes, and licenses. The fallout of these privileges creates a wall of legal barriers that exclude the poor." -- The Other Path (1989), by Hernando de Soto, paperback, "Preface," xx.
"Further research told us that one of the primary functions of terrorists in the Third World -- what buys them acceptance -- is protecting the possessions of the poor, which are typically outside the law. In other words, if government does not protect the assets of the poor, it surrenders this function to the terrorists, who then can use it to win the allegiance of the excluded." -- "Preface," xxiv
"People are at least 9 times more prepared to invest when they are given some measure of protection by the formal legal system." -- Id. at 25.
"The process of development we have been discussing shows that people are capable of violating a system which does not accept them, not so that they can live in anarchy but so that they can build a different system which respects a minimum of essential rights." -- Id. at 55.
"[A] law is 'good' if it guarantees and promotes economic efficiency and 'bad' if it impedes or disrupts it. The unnecessary costs of formality derives fundamentally from a bad law; the costs of informality result from the absence of a good law." -- Id. at 132
"It is a well-known economic principle that any noncorrective tax is inefficient in some way. A tax on wages, for instance, may encourage people to work fewer hours. A tax on property makes property less desirable and encourages some businesses to use less land and invest in fewer buildings of their own. Taxes distort economic choices, which is why one goal of the tax system should be to minimize these distortions, taking particular account of the costs of collecting and administering taxes. One way to do this is to keep taxes low...[too high taxes drive activity underground and] creates a vicious cycle: increased informality, reduced formality, maintenance of the level of public spending, need to increase taxes on formal activity, greater incentives to operate informally, and so on." -- Id. at 175.
"Contrary to the belief widespread in Latin America, the economic importance of property rights is not that they provide assets which benefit their holders exclusively, but that they give their owners sufficient incentive to add value to their resources by investing, innovating, or pooling them productively for the prosperity and progress of the entire community...It is the owner's profit motive which leads to the conservation and, this the maximization of the value of the [property/asset]." -- Id. at 178
"Since innovation is the riskiest investment, if a government cannot give it citizens secure property rights and efficient means of organizing and transferring them--namely, contracts--it is denying them one of the main incentives for modernizing and developing their operations. This is precisely what happens to the informals [in the underground economy]." -- Id. at 179.
"It is not enough that a good law be neutral and not encourage people to operate informally. It must also do at least two other things: it must create incentives for people to seize the economic and social opportunities offered by the country; secondly, it must facilitate the specialization and interdependence of individuals and resources." -- Id. at 182.
On rationing and price controls: "Each time the government grants a privilege or tax exemption, reduces prices, gives a certain type of worker permanent protection from dismissal, or grants an exclusive concession to a certain kind of business, it automatically creates costs and benefits which deprive others of incentives and opportunities. For instance, if the state controls the price of bread and decides to fix its price at a level which allows a smaller profit margin than is available through other activities, it may bring about an immediate redistribution of money from producers to consumers, but it will also have created a disincentive for baking bread, causing many to desert the industry for a more profitable one.
In addition to its overall economic impact, however, the redistributive tradition has created in Peru a society where almost all of the country's vital forces have organized in political and economic groups, one of whose main aims is to influence government in order to obtain a redistribution which favors them or their members." Id. at 190.
"A legal system whose sole purpose is redistribution thus benefits neither rich nor poor, but only those best organized to establish close ties with the people in power. It ensures that the businesses that remain in the market are those which are most efficient politically, not economically...Thus, redistributive laws ultimately politicize all sectors of the population, which try to organize in order to live at other's expense." Id. at 191-192.
Left vs. Right: "The romanticism of the left wing makes it generally praise and even venerate ordinary people, provided that they confine themselves to a strictly dependent role and possess neither ideas nor the ability to organize with others. It sees such people as passive objects in need of assistance programs similar to those required by the disabled and unemployed. It is as though left-wingers appreciate workers only when they lack the ability to get ahead on their own. This attitude is little different from the paternalism of right-wingers, who also sympathize with people of popular extraction as long as they confine their activities to loyal servitude, handicrafts, or folklore, but reject them as soon as they open their own businesses and charge for their services, negotiating their prices according to the dictates of the market. Then, the reaction is to say that their prices are 'exorbitant' and that the enterprising worker is a 'thief' or 'rascal.' Both right- and left-wingers acknowledge the right of mestizos from the high plateaus to live among us only as long as they need us to organize or employ them.
Competitive business people, whether formal or informal, are in fact a new breed. They have rejected the dependence proposed by the politicians. They may be neither likable nor polite—remember what many people say about minibus drivers and street vendors—but they provide a sounder basis for development than skeptical bureaucracies and traffickers in privileges. They have demonstrated their initiative by migrating, breaking with the past without any prospect of a secure future, they have learned how to identify and satisfy others' needs, and their confidence in their abilities is greater than their fear of competition. When they start something, they know there is always a risk of failure. Every day they face dilemmas: what and how are they going to produce? What are they going to make it with? At what prices will they buy and sell? Will they manage to find long-term customers? Behind every product offered or manufactured, behind all the apparent disorder or relative illegality, are their sophisticated calculations and difficult decisions..." -- The Other Path (1989), by Hernando de Soto, paperback, pp. 242-243.
"[W]ealth is simply the product of combining interchangeable resources and productive labor. Wealth is achieved essentially by one's own efforts. It is earned, little by little, in an active market where goods, services, and ideas are exchanged and people are constantly learning and adjusting to others' needs. Wealth comes from knowing how to use resources, not from owning them." -- Id. at 243.
"In practice, deregulation would...remove from the state's hands the power to restrict or confer access to production. This would reduce the state's power to decide who can produce and who cannot... Deregulation would mean freeing public resources so that the state could use them to ensure that strict, efficient rules of the game were imposed and that the freedom that individuals would then enjoy did not have adverse effects." -- The Other Path (1989), by Hernando de Soto, paperback, pp. 250.
"It is perfectly valid to want a state’s many functions to include redistribution. The crucial thing is that resources be redistributed to the needy in ways which do not discourage production, labor, and saving. If redistribution remains a pretext to go on damaging property rights or imposing excessive requirements for their enjoyment and use, or for undermining the security of contracts, we [Peru] will remain underdeveloped..." -- Id. at 251.
"Redistribution should therefore take forms which do not distort economic incentives, as does the transfer of money though taxation, so that the understandable zeal for redistributive justice does not hamper productive justice." -- Id. at 252.
"[T]he aim of deregulation is the same as mercantilists claim to pursue, including land, labor, credit, education, transport, safety and assistance to those who have the least. The difference lies in the fact that a deregulated state achieves these objectives by facilitating and controlling the functioning of the market, not by replacing it... In short, all of us, formals and informals, need to be governed by just, efficient laws instead of by the arbitrary authority of the state.” -- Id. at 252.
39. Why accounting is so hard to do ethically: "You and your neighbor buy identical new cars on the same day. You take good care of your car, regularly changing its oil and putting it in garages instead of parking it on the street... Your neighbor is much less conscientious. Three years later you have spent $1,000 more maintaining your car than your neighbor. But you figure that your car is worth $2,000 more than your neighbor's, because it is in better shape. The way you see it, you've saved $1,000. Your neighbor disagrees. He thinks the cars are worth the same. He thinks you've wasted $1,000 on unnecessary maintenance. Who's right? You may not be able to tell until the cars are sold. But if you were a public company, you would have to estimate your car's value every three months--and so would your neighbor... Now, imagine that instead of owning one car, you own thousands of garbage trucks. If you underestimate how quickly those assets are losing value, either accidentally or deliberately, you will wind up overestimating your earnings. And it will be essentially impossible, until you actually sell the used trucks, for anyone to know what you've done." -- The Number (2004 paperback) by Alex Berenson, from "Introduction," pp. xxx. [Reminds me of Marks vs. Skilling in Enron's heydays--see #31, above.]
"Most economists now believe the [October 29, 1929] crash did not cause the Depression. A far more important factor was President Herbert Hoover's stubborn refusal to increase federal spending as demand elsewhere in the economy collapsed." -- Id. at 17.
"Coke owned Paramount, the movie studio. Mobil [the oil company] inexplicably bought Montgomery Ward, the retailer, in 1976." -- Id. at pp. 75.
"[I]n 1980, commissions accounted for 35 percent of the industry's [Wall Street's] overall revenue, more than any other single source...By 1990 commissions provided only 16 percent of Wall Street's revenues, while fees for mergers and acquisition work made up 32 percent, up from 13 percent in 1980." -- The Number (2004 paperback) by Alex Berenson, pp. 87-88.
"The exercise of options transfers value from a company's investors to the employees who exercise them. Like inflation, options are a hidden tax." -- The Number (2004 paperback) by Alex Berenson, pp. 101.
"[T]he vast majority of options have always gone to executives and senior managers, especially outside Silicon Valley. The National Center for Employee Ownership, a nonprofit group that supports options, estimated that no more than 3 million Americans received grants in 1999." -- Id. at 105.
'[President] Bill Clinton could have stood up for the commission [S.E.C.]. But the S.E.C. had no natural constituency in the Democratic Party. It had no pork to dole out, and what did unions, environmentalists, or trial lawyers care about the stock market?" -- Id. at 140.
"The grand total of prison sentences that resulted from a decade of S.E.C. referrals was 87...By 2002, only about one thousand white-collar criminals were in federal prison, less than 1 percent of the total federal prison population." -- Id. at 145. "In fact, the shorts probably discovered more bad accounting between 1995 and 2002 than the entire S.E.C." Id. at 149.
"Essentially, mark-to-market accounting enabled Enron to estimate what its future profits would be every time it signed a deal or made a trade--and then book those profits right away, without having to see whether its estimates were right. It was as if McDonald's reported ten years of profits every time it signed a lease for a new restaurant." -- Id. at 198.
40. "It stands to reason that if the written law is in conflict with the laws citizens live by, discontent, corruption, poverty, and violence are sure to follow." -- Hernando de Soto, The Mystery of Capital (2000), pp. 92
"[Without formal legal structures,] How could physical objects, like timber in Oregon, secure an industrial investment in Chicago? How could insurance companies find and contract customers who will pay their bills? ... Many title systems in developing nations fail to produce capital because they do not acknowledge that property can go way beyond ownership... Properly understood and designed, a property system creates a network through which people can assemble their assets into more valuable combinations." -- Hernando de Soto, The Mystery of Capital (2000), paperback pp. 60-61
"By transforming people with property interests into accountable individuals, formal property created individuals from masses. People no longer needed to rely on neighborhood relationships or make local arrangements to protect their right to assets...But there was a price to pay: Once inside a formal property system, owners lost their anonymity...individual accountability has been reinforced...
Thus the formal property systems of the West have bestowed mixed blessings. Although they provided hundreds of millions of citizens with a stake in the capitalist game, what made this stake meaningful was that it could be lost." -- Hernando de Soto, The Mystery of Capital (2000), paperback pp. 54-55.
"Contrary to popular wisdom, operating in the underground is hardly cost-free... Because they are not incorporated, extralegal entrepreneurs cannot lure investors...they cannot secure low-interest formal credit...They cannot reduce risks by declaring limited liability or obtaining insurance coverage... With one eye always on the lookout for police, underground entrepreneurs cannot openly advertise... What determines whether you remain outside [the formal structure] is the relative cost of being legal." -- Hernando de Soto, The Mystery of Capital, paperback, pp. 155
"What the government had not taken into account was that when people finally acquire property, they have their own ideas about how to use and exchange it. If the legal system does not facilitate the people's needs and ambitions, they will move out of the system in droves... What characterizes the enemies of property and capital formation in developing and former communist countries is not whether they are leftists or rightists, but whether they are the friends of the status quo." -- Hernando de Soto, The Mystery of Capital, paperback, pp. 169
"By comparing the extralegal to the legal codes, government leaders can see how both have to adjusted to fit each other and then build a regulatory framework for property--a common bedrock of law for all citizens--that is genuinely legitimate and self-enforceable... That is the way for developing and former communist nations to meet the legal challenge, and that was basically how Western law was built: by gradually discarding what was not useful and enforceable and absorbing what worked." -- Hernando de Soto, The Mystery of Capital, paperback, pp. 187
"Civil society in market economies is not simply due to greater prosperity. The right to property also engenders respect for the law [and thus order]." -- Hernando de Soto, The Mystery of Capital, paperback, pp. 196
"Lawyers are the professionals most involved in the day-to-day business of property. They sit in key government offices where the can suppress major decisions. No group--aside from terrorists--is better positioned to sabotage capitalist expansion. And unlike terrorists, the lawyers know how to do it legally… The difficulty is that few lawyers understand the economic consequences of their work, and their knee-jerk to extralegal behavior and to large-scale change is generally hostile. All the reformers I have met working to make property more accessible to the poor operate with the presumption that the legal profession is their natural enemy." -- Hernando de Soto, The Mystery of Capital, pp. 198-199
41. "The Bush administration countered that the Clean Air Act did not give the EPA authority to regulate CO2 and that Massachusetts had no legal standing to be bringing the case b/c climate change was a global issue and MA was only one of 50 states...On April 2, 2007, the Supreme Court delivered what has been called 'the most important environmental ruling of all times.' In a 5-4 decision, the Court declared that MA had standing...because of the costly storms and the loss of coastal shore that would result from climate change. The 'risk of harm' to MA was 'both actual and imminent.'" -- Daniel Yergin, The Quest (2011, 2012), paperback, Penguin Books, pp. 507.
"But energy R&D has remained low when measured against the energy and security challenges and the need for innovation. For instance, the total energy R&D spending in 2008 was equivalent to two weeks' spending on the Iraq War." -- Yergin, The Quest (2011, 2012), paperback, pp. 557 (Citing "Task Force on Strategic Energy R&D: Shaping Our Nation's Future in a Competitive World" (Washington, D.C.: GPO 1995), p. 1 ("deficit"); Kelly Gallagher, Ambuj Sagar, Diane Segal, Paul de Sa, and John P. Holdren)
In Palm Springs, "residents were outraged by the wind machines that were crowding in on their vistas. [The] mayor, the entertainer Sonny Bono, went on the attack against proposed new wind turbines that would tower above...in the San Gorgonio Pass. He announced he would fly to Washington, D.C., 'to do battle as Don Quixote did against windmills.' However, when a budget crunch hit Palm Springs, he changed his mind and instead went to war against neighboring Desert Hot Springs, battling over which city would get to annex nearby wind farm sites in order to augment ailing property tax revenues." -- Daniel Yergin, The Quest (2011, 2012), pp. 605. [At the end of the day, economic concerns trump ideology.]
"The question of externalities--undesirable side effects or consequences--is something with which economists have long struggled... Arthur Pigou had argued...that the way to deal with externalities, which are not reflected in the price of a good, was for the gov to intervene and...tax...the externality. Think of it as a sort of sin tax. A $1 tax per pack of cigarettes [to combat lung cancer] or a 50 cent carbon tax on gasoline would be examples...But [Ronald] Coase was sure that Pigou...was placing far too much faith in the wisdom of gov and that he failed to understand the role of property." -- Daniel Yergin, The Quest (2011, 2012), paperback, pp. 477.
"[Thomas] Edison was largely self-taught; he had only a couple of years of formal schooling, plus six years as an itinerant telegrapher, making such achievements even more remarkable. His partial deafness made him somewhat isolated and self-centered, but also gave him an unusual capacity for concentration and creativity." -- Daniel Yergin, The Quest (2012), paperback, pp. 349
"The difference in the balance between discoveries [of oil fields] and revisions and additions is dramatic. According to one study by the USGS, 86% of oil reserves in the United States are the rest not of what is estimated at the time of discovery but of the revisions and additions that come with further development." -- Daniel Yergin, The Quest (2012), paperback, pp. 241
On "peak oil" throughout the years: "By the end of the 1920s, instead of permanent shortage, the market was beginning to swim in oil. The discovery of the East Texas oil field in 1931 turned the surplus into an enormous glut: oil plunged temporarily to as little as ten cents a barrel; during the Great Depression some gasoline stations gave away whole chickens as premiums to lure in customers." -- Daniel Yergin, The Quest (2012), paperback, pp. 233
The "word 'speculator' is confused with 'manipulator.' But 'speculation' is...a technical term with rather precise meaning. The 'speculator' is a 'non-commercial' player--a market maker, a serious investor, or a trader acting on technical analysis. The speculator plays a crucial role. If there is no speculator, there is no liquidity, no futures market, no one on the other side of the trade, no way for a hedger [e.g., airline, oil producer, farmer] to buy some insurance in the form of futures against the vagaries of price and fortune." -- Daniel Yergin, The Quest (2012), paperback, pp. 170
42. From a Shanghai government official in 2006: "Outsiders think of everything about China multiplied by 1.3 billion...[but] We have to think of everything as divided by 1.3 billion." -- James Fallows, China Airborne (2012), pp. 10
43. "In 1912, the government derived 45% of its revenue from duties imposed on imported goods, and another 42% from excise taxes on alcohol and tobacco. There was no income tax. So tariffs and these two excise taxes accounted for 87% of government receipts. They were a kind of national sales tax, though no one called them that." -- Donald Bartlett & James Steele, The Great American Tax Dodge (2000), hardcover, pp. 6.
"In the 1980s, the NBA and referees' union incorporated certain travel benefits into their contracts. Under the terms, the NBA paid its referees the cost of a first-class airline ticket for flights lasting longer than 2 hours and a full-fare coach ticket for travel under 2 hours. The referees, in turn, were permitted to exchange the tickets for cheaper seats and to keep the difference... The referees did not declare [the difference] as income... The practice was clearly improper." -- Donald Bartlett & James Steele, The Great American Tax Dodge (2000), hardcover, pp. 180
"But beginning in the 1960s, and then continuing through the 1970s, 1980s, and 1990s, a succession of Congresses and presidents slashed rates and amended and revised the tax code interminably, rendering it deformed and unintelligible, most noteworthy for its exceptions and exclusions. In other words, the real problem is not the tax code. It's Congress and the White House..." -- Donald Bartlett & James Steele, The Great American Tax Dodge (2000), hardcover, pp. 233.
44. "Our low effective corporate tax rates have led to calls...for corporations to pay higher taxes, but it is important to remember that companies are not real people. If they did pay higher taxes, it is hard to identify how that burden would be spread across employees (as lower wages), shareholders (as lower profits), or other capital owners (as lower rates of return)." -- White House Burning (2012), by S. Johnson & J. Kwak, hardcover, pp. 121
On lawyers and ethics: "When he [Webster Hubbell] was indicted on charges of income tax evasion growing out of the overbilling of clients in his Arkansas practice, Hubbell--a onetime chief justice of the Arkansas Supreme Court--claimed the real beneficiaries were his law partners... [His wife asked] 'You didn't actually do that, did you, mark up time for the client, did you?' [He replied] 'Yes, I did...So does every lawyer in the country.'" -- Donald Bartlett & James Steele, The Great American Tax Dodge (2000), hardcover, pp. 219
"Congress can dictate how much Medicare will pay doctors for a given Medicare procedure, but Congress cannot force doctors to accept Medicare patients; so for Medicare to be a viable health insurance plan, it must pay something reasonably close to the market price...In 1985 health care spending accounted for 1/10 of the national economy; in 2009, it was about 1/6; and by 2035, it is likely to be more than 1/4. That means Americans will have to devote a larger and larger share of their incomes to paying for health care." -- White House Burning (2012), by S. Johnson & J. Kwak, hardcover, pp. 132
"[M]ost government policies can be accomplished at least three different ways: spending, tax credits (provisions that let you reduce your taxes), and regulation. For example, let's say politicians...want to help poor people afford rental housing...they can build and manage public housing projects; they can give tax credits to developers who build affordable housing; or they can write a regulation saying that a certain percentage of all new housing units must be rented at affordable rates." -- White House Burning (2012), by S. Johnson & J. Kwak, hardcover, pp. 116 [The point is that some of these options are more palatable to voters than others. For example, the third option in the example above may seem more intrusive than the other two--one person called it "theft, pure and simple." In reality, however, all three methods accomplish the same goal, and all three methods expand government influence.]
"In 2010...Social Security, Medicare, and interest on the debt cost over $1.3 trillion, while tax revenues were less than $2.2 trillion [i.e., over half of federal taxes are automatically transferred to these programs, leaving other programs to battle for remaining revenue]. Balancing the budget at that level of taxes would have required cutting all other federal spending--national defense, immigration control, federal courts and the federal prison system, Medicaid, food stamps, student loans, everything--by over 60%." -- White House Burning (2012), by S. Johnson & J. Kwak, hardcover, pp. 113
"A majority of Americans say Medicaid is important to their families, which may seem surprising for a program dedicated to the poor--until you realize that it served 68 million people in 2010. This is in part because Medicaid, unlike Medicare, pays for long-term care (although beneficiaries must first exhaust all of their assets)--relieving many middle-class, working-age people from having to pay for their parents' care." -- White House Burning (2012), by Simon Johnson & James Kwak, hardcover, pp. 108
"In 1962, Kennedy began campaigning for a major, deficit-increasing tax cut as a way to increase demand and economic growth... For the first time in American history, a president was arguing that deficits could be a good thing, not an unfortunately necessary response to a military or economic emergency. Kennedy's VP and successor, Lyndon Johnson, also found that some things were more important than a balanced budget: faced with the choice between guns and butter, he chose both." -- White House Burning (2012), by Simon Johnson & James Kwak, hardcover, pp. 60
45. On management styles: "[Gary] D'Addario was a rare breed of supervisor for a para-military organization. He had learned long ago to suppress the first impulse of command that calls for a supervisor to humiliate his men, charting their movement and riding them...that sort of behavior usually resulted from a new supervisor's primitive conclusion that the best way to avoid being perceived as weak was to behave as a petty tyrant... Supervisors like that either grew into their jobs or their best men ducked and covered long enough to transfer to another sector." -- David Simon, Homicide (1991, 2006), paperback, pp. 39-40.
"Typically, a detective will hold back [from the media] the caliber of the weapon used, or the exact location of the wounds, or the presence of an unusual object at the scene. If the murder occurred inside a house rather than on a street where a crowd can gather, the investigator might withhold a description of the clothes worn by the victim or the exact location of the victim's body in the house." -- David Simon, Homicide (1991, 2006), paperback, pp. 75
The greatest challenge in gov hiring and promotion is to create objective AND useful tests: "Moreover, the test results--though they implied a quantitative approach--had always been subject to politics: an applicant's score on his oral exam was usually only as good as his departmental connections. Then, in the early 1980s, testing was discontinued and appointment to detective became purely political...In a decade of affirmative action, it helped to be black; it also helped to have a lieutenant colonel or deputy commissioner as a mentor." -- David Simon, Homicide (1991, 2011), pp. 97
On police coverups and self-policing: "But it was [reformer Donald] Pomerleau himself who successfully fought a prolonged battle against the creation of a civilian review board, assuring that in cases of alleged [police] brutality the Baltimore department would continue to monitor itself. As a result, the [police]men on the street in the late 60s and early 70s understood that a bad shooting could be made to look good and a good shooting could be made to look better." -- David Simon, Homicide (2006), pp. 110
"The question [when an officer mistakenly shoots an innocent civilian] was whether the department was going to sacrifice its own rather than confront one of the most unavoidable truths about police work: the institutionalized conceit that says in every given circumstance, a good cop will give you a good shooting." -- pp. 113
"Among cops, some vague taint has always been attached to the title of lawyer, some grounded ethic that believes even the best and most devoted attorneys to be little more than well-paid monkeys wrenches hurled into the criminal justice machine. Despite his training, [Terrence] McLarney [with his J.D.] adhered to that ethic: He was a cop, not a lawyer." -- David Simon, Homicide (1991, 2006), pp. 144
"The Baltimore unit has maintained its rate both through good, solid police work and through a gentle manipulation of the clearance rate itself. Whoever declared that there are lies, damn lies, and statistics could just as easily have granted law enforcement data a category unto itself. Anyone who ever spent more than a week in a police department's planning and research section can tell you that a burglary clearance doesn't mean that anyone was actually arrested, and that a posted increase in the crime rate can have less to do with criminal proclivity than with the department's desire for a budget increase." -- Id. at pp. 195
During a police interrogation, those "few with heart enough to ask whether they are under arrest are often answered with a question:
'Why? Do you want to be?'
'Then sit the f**k down." -- David Simon, Homicide (2006), pp. 210
46. "Martin Buber once said, 'The lie is the spirit committing treason against itself.' Our acceptance of lies becomes a cultural cancer that eventually shrouds and reorders reality until moral garbage becomes as invisible to us as water is to a fish. How much do we tolerate before we become sick and tired of being sick and tired?" -- Stephanie Ericsson, from "The Ways We Lie," a must-read essay.
47. "One may well ask: 'How can you advocate breaking some laws and obeying others?' The answer lies in the fact that there are two types of laws: just and unjust. I would be the first to advocate obeying just laws. One has not only a legal but a moral responsibility to obey just laws. Conversely, one has a moral responsibility to disobey unjust laws. I would agree with St. Augustine that 'an unjust law is no law at all.'" -- Martin Luther King Jr., "Letter from Birmingham Jail," applicable to the concept of jury nullification
48. Change and tolerance come from getting used to each other, not logic nor arguments, according to Kwame Anthony Appiah:
"I am urging that we should learn about people in other places, take an interest in their civilizations, their arguments, their errors, their achievements, not because that will bring us to agreement but because it will help us get used to one another--something we have a powerful need to do in this globalized era. If that is the aim, then the fact that we have all these opportunities for disagreement about values need not put us off. Understanding one another may be hard; it can certainly be interesting. But it doesn't require that we come to agreement."
49. "My job is to disturb the comfortable and comfort the disturbed." -- Unknown, though it could be my life's unofficial guiding principle.
50. It is in vain to hope to please all alike. Let a man stand with his face in what direction he will, he must necessarily turn his back on one half of the world. -- George Dennison Prentice
51. Always hold your head up, but be careful to keep your nose at a friendly level. -- Max L. Forman
52. If teachers and grammar school editors find my jawbreaker sentences shatter their mushmild teeth, let them eat stale cake dunked in weak tea of their own ungodly manufacture. --Ray Bradbury, “Coda”
53. We must travel across lonely and rugged terrain, through isolation and silence, to reach the magic zone where we can dance an awkward dance and sing a melancholy song. -- Pablo Neruda
54. "A liberal plants his feet firmly in the heavens and drags upwards the conservatives by rejecting pessimism through calm discourse and firm common sense. A liberal recognizes the bright stars in feeble bodies eager to shine." -- a very young and idealistic Matthew Rafat (See Justice John Paul Stevens quote in #56.)
55. W. E. B Dubois, the foundation of African-American culture is, in his famous formulation in The Souls of Black Folk, "double-consciousness," a conception strikingly parallel to the idea of the wavering hero-or, rather, a striking instantiation of it. For Dubois, "the American Negro [...] ever feels his twoness-an American, A Negro; two souls, two thoughts, two unreconiled strivings, two warring ideals in one dark body, whose dogged strength alone keeps it from being torn asunder." Furthermore, "the history of the American Negro is the history of this strife-this longing to attain a self-conscious manhood, to merge his double self into a better and truer self. In this he wishes neither of his older selves to be lost. He would not Africanize America, for America has too much to teach the world and Africa. He would not bleach his Negro soul in a flood of white Americanism, for he knows that Negro blood has a message for the world. He simply wishes to make it possible for a man to be both a Negro and an American, without being cursed and spit upon by his fellows, without having the door of Opportunity closed roughly in his face" (364-65).
56. Justice John Paul Stevens: Ahrens v Clark, 335 US 188: "At stake is nothing less than the essence of a free society...Unconstrained execution detention for the purpose of investigating and preventing subversive activity is the hallmark of the Star Chamber...For if this nation is to remain true to the ideals symbolized by its flag, it must not wield the tools of tyrants even to resist an assault by the forces of tyranny."
57. "In a world where deficits don't matter, a post-factual society cannot be far behind." -- Matthew Mehdi Rafat