Monday, August 31, 2009

Muhammad Ali: The Whole Story

I recently watched Muhammad Ali -- The Whole Story (1996), an incredible six hours journey through the life of Muhammad Ali. Here are some of my thoughts:

1. The only boxer who could go toe-to-toe with Ali was Ken Norton. No one else could handle Ali without getting beaten badly. When Ali was in his prime, only Joe Frazier and Ken Norton beat him. There are differences, however, in how Frazier and Norton won their fights. For example, Joe Frazier may have beaten Ali, but Frazier could not avoid getting hit. As a result, every time he and Ali fought, Ali's face looked clean as a whistle, while Frazier's face looked like it had been through a meat grinder. Meanwhile, Norton actually broke Ali's jaw in one fight.

2. Ali was successful at every stage of his career. He won an Olympic gold medal; won numerous amateur boxing awards; and beat every single serious professional contender through the age of 37 years old. When he went professional, he won the heavyweight championship three times, something no one else has ever done.

3. When George Foreman was younger, he seemed like nothing more than a surly thug. At one point, we see Foreman walking with his entourage in Zaire prior to the "Rumble in the Jungle." Someone, presumably a fan, asks to shake Foreman's hand, but Foreman's friend keeps her away and then happily reports he told her "she could shake my hand." Foreman sees what has happened and keeps walking. It is impossible to imagine the gregarious Muhammad Ali behaving similarly towards any of his fans. It is also incredible how Foreman completely reinvented himself in his old age, transforming from a reserved thug to a grandfatherly figure who sells fat-reducing cooking grills.

4. Before Larry Holmes became heavyweight champion, he was Muhammad Ali's training partner.

5. Were it not for Muhammad Ali, we would all be talking about Joe Frazier. When Frazier was young, he wasn't just an incredibly tough boxer--he was also gregarious and fun. Whereas other boxers took Muhammad Ali's comments seriously, Frazier played along with Ali. At one point, Frazier even tried to up Muhammad Ali's star power by singing a poem, and he displayed a surprisingly soulful voice.

6. When Ali was young, he was so quick, no one could hit him. After fifteen rounds in the ring, Ali's face would be unmarked. That's why he kept saying, "I'm pretty." Richard Pryor once remarked, "His punches are so fast you don't see 'em until they're coming back." It's hard to really understand the power and grace of Ali's speed until you see someone trying to hit him and failing miserably.

7. Ali's poetry: "I'm so bad, I make medicine sick."

Sunday, August 30, 2009

Vienna Teng

Two events I must recommend: Vienna Teng in concert, and the comedian Jim Breuer live. Here is Vienna Teng meeting with fans after her recent Palo Alto concert.

Friday, August 28, 2009

Intelligent Cops Need Not Apply?

I'm not sure I want to be anywhere near New London, CT. Apparently, they reject police officers who are too intelligent: [link outdated--see below]

A U.S. man has been rejected in his bid to become a police officer for scoring too high on an intelligence test.

Perhaps this doesn't apply to California. California's police unions do very well in salary/pension demands and in court.

Update on January 31, 2012: link above is outdated--try this one:

"Judge Peter C. Dorsey of the United States District Court in New Haven agreed that the plaintiff, Robert Jordan, was denied an opportunity to interview for a police job because of his high test scores. But he said that that did not mean Mr. Jordan was a victim of discrimination."  

Thursday, August 27, 2009

CIA and FBI: Results of My FOIA/FOIPA Request

Lately, the FOIA is getting good press. The FOIA and FOIPA allow Americans to gain access to information government agencies have about them. Previously, USAG Ashcroft instructed lawyers to do whatever they could to deny requests for information, such as charging high fees for file searches or copies. President Obama, on the other hand, has promised change, and part of this change is more transparency. I wanted to see whether government agencies were complying with President Obama's message, so I recently sent FOIA and FOIPA requests to both the FBI and CIA. Their handling of my requests was starkly different, even though I sent the same letter to both agencies.

All government agencies should have similar responses to FOIA and FOIPA requests for personal information. The two laws are not overly complicated, so they shouldn't be interpreted differently depending on whichever agency is handling the request. Therefore, a valid request for personal information should result in a similar response from all federal agencies--i.e., the agency must produce relevant documents to you if such documents exist.

The procedure is simple: agencies must respond within 20 days and acknowledge they have received your request. Then, the agency must do a search for your documents and if it finds relevant documents, it must provide you with those documents. In some cases, an agency may redact sensitive information on documents. (Note: under Bush II/Ashcroft, the DOJ improperly and excessively redacted information, which effectively gutted the FOIA and forced multiple appeals).

In my case, in terms of responsiveness, the FBI passed with flying colors. Not only did the FBI acknowledge my request in less than a week, it even waived the normal fees and included an FBI Fact File Sheet (one sample fact: "The FBI does not keep a file on every citizen of the United States."). Then, it did the search for relevant documents the very next day and mailed me a written update. Someone at the FBI even personally initialed both letters.

The FBI's substantive response was interesting. No documents existed on me, but "Records which may be responsive to your Freedom of Information-Privacy Acts (FOIPA) request were destroyed on February 14, 2005." I believe I applied for the FBI's Special Agent trainee position around 1999. Thus, it appears the FBI destroys applicant/personnel files after six years. The FBI letter even told me exactly how to appeal the decision; where to send the appeal; and the exact statute of limitations (60 days from the date of the letter). In terms of professionalism and responsiveness, the FBI seems to be complying with President Obama's transparency directive.

In contrast, the CIA appears to be following Dick Cheney's philosophy of concealing information. Although it did respond to my request, I received their response on the twentieth day. Also, although the CIA's letter is dated August 20, 2009, the envelope shows that the letter was not mailed until August 24, 2009--four days after it was written. As of today, the CIA has refused to provide me with any information.

The CIA cited 32 CFR 1901.13, which states, "In the case of an individual who is an alien lawfully admitted for permanent residence, said individual shall provide his or her alien registration number and the date that status was required." I am a naturalized U.S. citizen, not an alien or permanent resident. The plain language of the code section uses the present tense, not the past tense to refer to a person "who is an alien." Somehow, the CIA is claiming I need to comply with legal language that applies to non-citizens, even though I am an American citizen.

I used the same written content for both FOIA/FOIPA requests. Only the CIA denied my request and demanded more information. In denying my request, the CIA also referred to legal code that doesn't apply to American citizens. The FBI's fulfillment of my request supports my belief that the CIA is incorrectly throwing up a hurdle to deny me information. In addition, the CIA failed to respond to my fee waiver request.

Two different agencies, the same laws, and two entirely different responses. I am debating whether I should give the CIA the information they want, or whether I should tell the CIA I will take them to court if they don't grant my request. My gut tells me to provide them with the information, but I may change my mind. [Update: go to the bottom of this post to see what eventually happened.]

My letter to the FBI is below:


Attn: FOIA Request
Federal Bureau of Investigation
Record Information/Dissemination Section
170 Marcel Drive
Winchester, VA 22602-4843

Dear FBI:

Under the Freedom of Information Act, 5 U.S.C. subsection 552 and the Privacy Act, 5 U.S.C. section 552a, please furnish me with copies of all records about me indexed to my name. To help identify information about me in your record systems, I am providing the following required information:

Full name: X
Current address: X
Date and Place of Birth: X
Citizenship status: X

If you deny all or any part of this request, cite each specific exemption forming the basis of your refusal to release the information, and notify me of appeal procedures available under the law.

I believe I am a representative of the news media and this request is made part of news gathering and not for commercial use. I publish a blog at that posts, among other items, articles about the government. I will be writing about my experience requesting information from your agency on this blog. This matter affects a public interest because it will show Americans how to access their information from government agencies. It will also test President Obama’s statements about whether the federal government is more open to granting FOIA requests.

If you do not deem me to be eligible for a fee waiver, then I agree to pay reasonable fees/costs incurred in the copying of these documents up to the amount of $30. If the estimated fees will be greater than $30, please contact me by telephone (xxx-xxx-xxxx) before such expenses are incurred. If you have any questions regarding this request, please contact me by telephone. Thank you for your assistance.

Under penalty of perjury, I hereby declare that I am the person named above and I understand that any falsification of this statement is punishable under the provisions of Title 18, United States Code (U.S.C.), Section 1001 by a fine of not more than $10,000 or by imprisonment of not more than five years, or both; and that requesting or obtaining any record(s) under false pretenses is punishable under the provisions of Title 5, U.S.C., Section 552a(i)(3) as a misdemeanor and by a fine of not more than $5,000.

Date: ________________________________

Signature _____________________________

FYI: CIA's address and fax number are as follows:

Information and Privacy Coordinator
Central Intelligence Agency
Washington, D.C. 20505
fax: (703) 613-3007

Update on September 15, 2009: on September 7, 2009, I decided to give the CIA the information they wanted. I told them if I did not hear back from them by September 15, 2009, I would assume that they had a policy of treating naturalized citizens differently (read: more harshly) than native-born citizens. I have not heard back from the CIA yet.

Update on September 27, 2009: on a letter post-marked on September 21, 2009 and written on September 17, 2009, the CIA finally responded to my request: "We were unable to identify any information or records filed under your name. Regarding your request for a fee waiver, it is the policy of this agency to not charge fees for Privacy Act searches."

Bonus I: more "loveliness" from the CIA here.

Bonus II: see comments section for ODNI request and result.

Bonus III: see HERE for a summary of CIA Director Leon Panetta's speech at SCU (2010).

Bonus IV: see below for the most recent update. Everyone knows what "Neither confirm nor deny" means, especially with several watchlists not subject to truly independent oversight. See, for example, FISA court resignations.

Bonus V: after cleaning my room, I found this old envelope. An intelligence agency, ODNI, misspelled my middle name. I realize a secretary may have made the mistake rather than an analyst or officer, but I also suspect secretaries or similar level employees/contractors were the ones inputting data--including names on security lists--into computers and databases before artificial intelligence. 

Wednesday, August 26, 2009

CIA Engaged in Torture

The Economist has an interesting article on the CIA's role in torture. See here. The CIA used pistols and power-drills to threaten detainees. One detainee was told that "interrogators would sexually abuse his female relatives in front of him."

Leave it to a British magazine to report on American war crimes. Where are the New York Times and Wall Street Journal on the topic of CIA-sponsored torture?

Stimulus Money: Where Does It Go? (Part 2)

Two links showing the location of the bailout monies:

Tuesday, August 25, 2009

Police Officers May Legally Lie about Being Sick

In California, a police officer who lies about being sick and gets caught not only gets to keep his job, but can force his employer to give him prior notice of a status check. Don’t you wish the private sector worked like this?

When police officer Paterson called in sick, his supervisor was suspicious. He therefore sent Legaspi to Paterson’s home to check on his status. When he arrived, Paterson was absent. Legaspi then telephoned Paterson on his cell phone and Paterson claimed to be home, sick. Paterson sued for violation of his rights under the Public Safety Officers’ Bill of Rights Act (Gov. Code, §§ 3300-3313). The trial court ruled for the city, holding that the Act did not apply to a “sick check.” However, the Court of Appeal reversed, ruling that the police department’s actions amounted to an investigation and interrogation. As such, according to the California Court of Appeal, Officer Paterson should have been given prior notification of the investigation under the Act. See Paterson v. City of Los Angeles (2009) 174 Cal.App.4th 1393.

In short, the Appeals Court ruled that a public safety officer should be told in advance whether someone is going to verify a sick day--which makes it impossible for employers to effectively check whether a California public safety officer is lying about being sick.

Monday, August 24, 2009

Bill Maher Making Sense

Bill Maher making sense here:

If in your eyes America can do no wrong, you should really look into Lasik surgery. There's the rational, mature assessment of our country: that it's a great nation -- especially if you like fried foods -- but it also has its faults. And then there's the Republican view: that it's perfect and pure in every way and it's always right all the time, just like Leviticus and Ronald Reagan.

Now if only he'd apologize for Howard Bloom in Religuous... :-)

Stimulus Money: Where Does It Go?

Interesting story in the LA Times re: stimulus funds. See here.

Over the next three years, California is expected to get $26 billion in stimulus funds for projects including building highways and bridges, developing education programs and stabilizing the state's finances, according to a private research group. About $5.6 billion in spending in the state has been approved so far by the federal government, according to state officials. Transportation makes up a big share of the stimulus projects already approved.

And still, no BART from San Jose to San Francisco.

Sunday, August 23, 2009

Miss Manners on Love

Ms. Manners always gives great relationship advice:

When a romance gets to the point where the other person asks to be left alone, talking does not help. Suggesting relationship material does not help. Apologizing for calling does not help. All that makes it worse. Your only hope is to leave him strictly alone.

It's counter-intuitive, but she's right.

Saturday, August 22, 2009

Religious Assimilation

My response to this post:

It's sad to see a reputable website publicize a re-hashing of Samuel Huntington's false Clash of Civilizations thesis. First, if some sort of clash between Islam and the West is inevitable, why hasn't America experienced major issues with integrating Muslims? "Muslim Americans, like Arab-Americans, have fared well in the U.S. The Zogby survey found that 59% of American Muslims have at least an undergraduate education, making them the most highly educated group in America...[Also] 21% of Muslim Americans intermarry...close to the national rate of 22% of Americans who marry outside their religion" See WSJ article (Stephens/Rago, 8/24/05).

Second, is it fair for anyone to judge an immigration pool after just one or two generations? It typically takes at least three generations to assimilate--and this is true of all immigrant pools, not just Muslims.

Third, isn't Europe's "problem" of integration its own doing? Europe needed immigrants to do tough jobs for low pay. It voluntarily imported low paid men without any long term plans on how to integrate them into a society far different from their homelands. Is it any wonder that, in the absence of a welcome alternative, these men gravitated towards similarly situated ethnic and religious groups? Or did Europeans expect these immigrants to speak the Queen's English and order pints within a few months?

Fourth, when will we learn from history? These exact same objections were made against Jewish immigrants; against Irish Catholic immigrations; against Italian Catholic immigrants; and against Latino Catholic immigrants. All have integrated into American society. Moreover, despite suffering persecution in Europe, non-Christians, including Jews and atheists, are now accepted as fully assimilated European citizens and still retain their own identity--so why should the experience of Muslims be any different in the long run? Mind you, assimilation isn't the only path to prosperity. American-born Mormons may have actually done better by not fully assimilating in American society and now have the state of Utah to show for it.

In the end, religion isn't a reliable factor for any future projections, because it is practiced in so many different ways all over the world and by so many different people. For example, a religiously-focused person may claim African-American Christians are the least assimilated group in America based on their segregated living patterns, lower education, and lower income levels. Does this mean Christians cannot be assimilated in America? One immediately sees the absurdity in making this kind of argument.

I am saddened by Mr. Cowen's seeming endorsement of this book, especially on a date so close to Ramadan.

Bonus: another blogger's take on European Muslim immigration is here.

Bonus II: below is my response to another comment on Marginal Revolution, which alleges Muslims are somehow different than previous generations of immigrants because they self-identify as Muslims rather than their ethnicity. In other words, the writer's (unsupported) theory is that German immigrants were more likely to identify as Germans rather than Christians, but a Syrian Muslim is more likely to identify as a Muslim first and a Syrian second. The (unproven) theory is that this form of self-identification apparently creates problems because nationalism and patriotism are better suited to assimilation than religious identification. The writer also made a comment that Islam is more politicized today than other religions.

My response: Assimilation is a long, gradual process. Thus, no matter how immigrants self-identify, it's the third generation that assimilates, making data about the first and second generation of limited relevance.

Also, so what if some Muslims in 2009 self-identify as Muslims instead of an ethnic background? Take your theory and replace Muslims in 2009 with Jews in 2009. Is there a difference between the groups in favoring religious over ethnic self-identification? Probably not. Thus, the real question is whether there will there be a difference by the third generation in terms of self-identification. To the extent a host country provides its immigrants with a reasonable chance of upward mobility and political representation, cultural assimilation should not be a problem by the third generation.

I don't understand your second point. To the extent you are saying religious conservatives fight with secularists, so what? This same "fight" happens in America, especially between Southern states and non-Southern states. The key issue isn't religion, but balancing separation of religion and state with freedom of religious expression. On this issue, America seems to be doing a much better job than Europe. For instance, most American elected officials strive for tolerance, while European elected officials seem to openly criticize non-Christians. America's ideal of tolerance, including religious tolerance, may assist America in assimilating its American Muslims. At the end of the day, it seems like Europe is repeating its mistakes--or did you forget that Europe's failure of religious tolerance spawned modern-day America?

Weekend Linkfest


Scott Burns

Clay Bennett

Tom Toles

Friday, August 21, 2009

Kitchen Confidential

I recently read half of Anthony Bourdain's Kitchen Confidential. Some food tips: avoid mussels; do NOT order fish on Monday; and go out to eat on Tuesdays and Thursdays, when the chefs are rested from the weekend.

Warren Buffett: the Greenback Effect

Warren Buffett had an op-ed piece in the NYT this week. See here. Mr. Buffett is concerned about our deficit:

This fiscal year, though, the deficit will rise to about 13 percent of G.D.P., more than twice the non-wartime record. In dollars, that equates to a staggering $1.8 trillion. Fiscally, we are in uncharted territory.

Interesting to see Krugman and Buffett at odds.

Thursday, August 20, 2009

Dept of Labor Consumer Spending Chart

Predictably, housing is the main expense, following by transportation, food, and insurance/pensions. How much does the average American spend on reading? Just $118 a year.

Wednesday, August 19, 2009

Supreme Court Justices: Bobblehead Doll Edition

Thanks to some friends in D.C. and the George Mason School of Law, I am now the proud owner of Justice David Souter, Fidel Castro, and Justice Louis Brandeis bobblehead dolls. (Bet you never thought you'd see those three names in the same sentence.) I am not materialistic, but I love collecting things that are associated with good memories. Justice Brandeis and Justice Souter are two of my favorite Justices. I don't have any good memories relating to Castro, but it's the GTMO version, and I received it from a former law school classmate who is representing GTMO detainees. To me, it represents due process of law, or at least a reminder that America owes all its detainees some form of a fair trial.

Experience should teach us to be most on our guard to protect liberty when the government's purposes are beneficial. Men born to freedom are naturally alert to repel invasions of their liberty--by evil-minded rulers. The greater dangers to liberty lurk in insidious encroachment by men of zeal, well meaning but without understanding. -- Justice Louis Brandeis

JUSTICE BREYER: On that question, suppose that you are from Bosnia, and you are held for six years in Guantanamo, and the charge is that you helped Al-Qaeda, and you had your hearing before the CSRT [Combatant Status Review Tribunal].

And now you go to the D.C. Circuit, and here is what you say: The CSRT is all wrong. Their procedures are terrible. But just for purposes of argument, I concede those procedures are wonderful, and I also conclude it reached a perfectly good result.

Okay? So you concede it for argument's sake. But what you want to say is: Judge, I don't care how good those procedures are. I'm from Bosnia. I've been here six years. The Constitution of the United States does not give anyone the right to hold me six years in Guantanamo without either charging me or releasing me, in the absence of some special procedure in Congress for preventive detention.

That's the argument I want to make. I don't see anything in this CSRT provision that permits me to make that argument. So I'm asking you: Where can you make that argument?

GENERAL CLEMENT: I'm not sure that he could make that argument.


Parents are known to overreact to protect their children from danger, and a school official with responsibility for safety may tend to do the same. The difference is that the Fourth Amendment places limits on the official, even with the high degree of deference that courts must pay to the educator’s professional judgment. -- Justice David Souter

Tuesday, August 18, 2009

Movie Quote

"Stop talking about love. Every a**hole in the world says he loves somebody. It means nothing. What you feel only matters to you. It's what you do to the people you say you love--that's what matters. [Indeed] It's the only thing that counts."

-- from The Last Kiss, the best part from an otherwise terrible film

Best Non-Famous Movies

I love movies. Anyone who knows me knows I do three things with my free time: watch movies, play basketball, and read. Here is a list of incredible films--in no particular order--you've probably never heard of:

1. Elling (2001, Norway)
2. La Haine (1995, French)
3. A Peck on the Cheek (2002, Indian)
4. Street Fight (2005, American)
5. Ali: Fear Eats the Soul (1974, German)
6. Kiki's Delivery Service (1989, Japanese)
7. Farewell My Concubine (1993, Chinese)
8. Swimming to Cambodia (1987)
9. The Orphanage (2007, Spanish)
10. Shower (1999, Chinese)
11. The Lives of Others (2006, German)
12. Pelle the Conqueror (1987, Danish)
13. Sweet Land (2005)
14. Gallipoli (1981, Australian)
15. Children of Heaven (Persian)
16. Color of Paradise (Persian)
17. Misfits (1961, American)
18. Two for the Road (1967, American)
19. The Message (1976)
20. Muhammad Ali - The Whole Story (1996)
21. Night of the Hunter (1955)
22. No Man's Land (2001)
23. Coraline (2009)
24. A Taxing Woman (1987, Japan)
25. American Teen (2008)
26. Lilies of the Field (1963)
27. The Lion in Winter (1968)
28. Battle of Algiers (1966)
29. Winter Light (1963)
30. Jim Thorpe, All American (1961) [In memory of Westmont High School Wrestling Coach Patrick "Terry" Vierra]
31. Taxi to the Dark Side (2007) [This documentary is not for the squeamish. Also, I recommend watching The Oath (2010), before watching Taxi to the Dark Side.]
32. Through Deaf Eyes (PBS 2007)
33. Gideon's Trumpet (starring Henry Fonda)
34. McCarthy Years (hosted by Walter Cronkite) (1991) [not scintillating, but included because of its high American historical significance]
35. The Good, the Bad, the Weird (2008, Korea)
36. Lars and the Real Girl (2007)
37. The Wrestler (2008)
38. Splendor in the Grass (1961)
39. Persepolis (2007) [dedicated to my grandmother, Mamani]
40. The Garden (2008) (documentary)
41.  Deliver Us from Evil (2006) [difficult documentary to watch, but included, because one rarely sees the banality and cluelessness of evil so vividly]
42.  Source Code (2011).  One of the best modern movies I've ever seen. Jake Gyllenhaal is part of a new military program designed to prevent future attacks. Is he merely part of a simulation or something more?  Similar to Spielberg's Minority Report, but with two love stories--one romantic, one familial--as its foundation.
43.  A Separation (2011) (Persian)
44.  City Lights (1934) (Charlie Chaplin film)
45.  The Edge of Heaven (Auf der anderen Seite) (2007)
46.  Ken Burns' Unforgivable Blackness: Jack Johnson (2005).  Jack Johnson, a boxer in the early 1900s, was Muhammad Ali before Muhammad Ali.
47.  White Light/Black Rain: The Destruction of Hiroshima and Nagasaki (2007)
48.  Somewhere Between (2011)
49. About Time (2013), a love story.
50.  Coal Miner's Daughter (1980)
51. La La Land (2016) (this movie absolutely broke my heart, which leads me to my next suggestion...) 
52.  Southside with You (2016) (excellent dialogue from the beginning of a love story for the ages) 
53.  The Most Dangerous Man in America: Daniel Ellsberg and the Pentagon Papers (2009)
54.  My Son the Fanatic (1999)
55. The Time that Remains (2009)
56. A Man Called Ove (2015, Sweden)
57. Shoplifters (2018, Japanese 万引き家族)
58. Aftershock (2010) (唐山大地震, Chinese)
59. The Fifth Element (1997) [perhaps the least defensible choice on this list, but I loved everything about it.]
60. Cities of Last Things (2018) by Wi Ding Ho (featuring the songs Drone (Omnibus) and Omnibus One)
61. Harold and Maude (1971) [this is a famous movie, but I decided to include it when I realized non-Western audiences may not have heard of it.]
62. Mike Birbiglia: My Girlfriend's Boyfriend (2013)
63. Star Trek: Insurrection (1994)  
64. Once Upon a Time in China (1991) (Hong Kong)
65. Queen's Gambit (Netflix, 2020) 
66. Past Life (2016, Israel, החטאים) 
67. Star Trek: Prodigy (2021, American series) 
68. Undone (2019, Amazon series) 
69. Zana (2019, Kosovo) 
70. Slumberland (2022)
71. Russian Doll (2019), Season One only
72. Maniac (2018)
73. The Magician's Elephant (2023), excellent for children 
74. Australia (2008), Faraway Downs (2023)
75. Heat (1995)

Bonus I: HERE is a list of my favorite books.

Bonus II: HERE is a list of excellent horror films.

Bonus III: a list of great movie quotes is HERE.

Monday, August 17, 2009

Sunday Sportswrap: Iran Beats China

Iran's Hamed Haddadi crushed China 70-52 in the 2009 Asian Basketball Championships. Yao Ming did not play, but NBA players Yi Jianlian, Wang Zhizhi, and Yue Sun represented China. More here.

Also, try to guess the first non-Caucasian basketball player in the NBA. Would you believe it was Wat Misaka? More here.

Sunday, August 16, 2009

Sunday Randomness: Nataliya Dobrynska

I had an advertising idea after seeing Ukraine's Nataliya Dobrynska compete in the heptathlon. (I recommend doing a Google image search for pictures of her.) The heptathlon consists of the following events:

* 100 m hurdles
* high jump
* shot put
* 200 m
* long jump
* javelin throw
* 800 m

After Ms. Dobrynska ran the 800m, Usain Bolt broke a world record by running the 100m in 9.58 seconds. Mr. Bolt is a superstar, plain and simple. If I was a shoe or athletic company CEO, I'd want to sign him up immediately and make him the centerpiece of my advertising campaign. Although Puma currently sponsors Mr. Bolt, I don't think it's done enough to promote him in the States. Maybe Puma can sign up Ms. Dobrynska and do ads involving both Bolt and Dobrynska simultaneously. The theme could be Bolt being able to compete in any sport. One example could be Bolt trying the shot put and javelin throw, failing, and then becoming much better after Dobrynska teaches him. The same idea could be transferred to different supporting athletes with different sports, particularly soccer.


Music video from Somalian performer K'naan, who is a cross between Bob Marley and Eminem:

Saturday, August 15, 2009

Abu Ghraib

[Warning: I don't usually curse, but this occasion demands it.] 

If you ever think that "law" and "justice" belong in the same sentence, just remember Lynndie England. Apparently, Lynndie "Just Following Orders" England has a book; profited from her conduct at Abu Ghraib; and served only a year and a half (521 days) of jail time. 

So let me get this straight--a bunch of Chinese Muslims get jailed for being at the wrong place at the wrong time, aren't given due process, and end up getting deported. 

In the wake of the 9/11 attacks, supporters of anti-immigrant measures found common cause with the Bush administration in justifying expansive new immigration authorities in the name of national security. the department of Justice (doJ) began focusing on immigrants almost immediately. In the weeks following the attacks, doJ implemented a new set of policies for a growing category of non-citizens who became known as special interest detainees. In total, more than 760 predominantly muslim men were held as special interest detainees. many of the detainees were held for weeks, even months, without being charged. Ultimately, none was charged with a crime related to the attacks of 9/11; many were deported for visa violations. -- The 9/11 Effect and its Legacy on U.S. Immigration Laws, Penn State Law, School of International Affairs, edited by Shoba Sivaprasad Wadhia (2011) 

Meanwhile, some dumb back-country b*tch destroys America's reputation, refuses to take any personal responsibility for her actions, gets knocked up by a sadist, and we're not only keeping her in the country, we're giving her a book deal? (Irony alert: Bad Apple Books, LLC is the publisher.)

Her defense? I wasn't trained as a prison guard, and the power of love (for Charles Graner) made me do it. Bulls**t. Oh yes, Charles Graner, the sadistic jackass who lacks a healthy sense of irony. He once said, "Having the lights on all of the time was torture for me." (, Mark Benjamin, 12/1/08). F*ck you, Chucky. 

Some more interesting facts: Manadel al-Jamadi, after being tortured (including by strappado) and beaten to death, was hooked up to a fake IV to disguise the fatal beating. Andrew Ledford, a Navy SEAL accused of inflicting the fatal beating, was somehow acquitted and never served any jail time. In fact, most of the Abu Graib participants received either no jail time or less than a year's jail sentence--effectively rendering their conduct on par with a civil misdemeanor. Meanwhile, life goes on in America. 

The TSA recently detained Shah Rukh Khan, a famous Indian actor, until he made a call to the Indian consulate. The delicious irony is that Mr. Khan is making a film about a Muslim man's experience with racial profiling. I'm willing to bet the TSA won't fire anyone as a result of the improper detention. That means Middle Easterners can look forward to the following treatment at some American airports: "Um, your last name looks funny...wait here for a few hours."

Bottom line: if America wants to be taken seriously as a land of freedom for all, regardless of national origin, it must start openly disciplining government workers, especially military personnel, when they screw up. Thanks to government unions, however, if you're drunk on the Homeland Security kool-aid or the military-industrial complex, it appears you'll continue to get a free pass. God bless America? 

© Matthew Mehdi Rafat (2009) 

Note: this post has been revised since its original publication. 

Vienna Teng Rocks

I saw Vienna Teng live today in Palo Alto, and she is an absolute delight. Here is one of my favorite V.T. songs:

Healthcare: "Death Panels"

In all this talk about "death panels," perhaps I am missing something. Don't insurance companies and hospitals already practice some form of triage when it comes to medical expenses and coverage?

Also, why would an insurance company be more compassionate in deciding when to halt treatment than a government panel? Isn't the major issue how to determine liability when the government (or insurance company) wrongfully rejects continuing treatment?

Friday, August 14, 2009

Random Thoughts

1. Gina Carano is going to fight "Cyborg" Santos in San Jose this weekend. For me, the biggest issue is whether Santos will make weight. Apparently, they are fighting for a 145 lb title. Carano's natural weight is probably around 145 lbs, but Santos is probably more comfortable around 165 lbs. (By the way, I'm not sure I want to know how a 5'8'' woman without much body fat bulks up to 165 lbs.)

I remember making weight when I was a wrestler. I started competing at 152 lbs and moved up to 171 lbs. My strength would be diminished considerably if I had to drop ten pounds. When you train every day, you don't have much body fat, so cutting more than five pounds is tough. The first five pounds are easy because most of it is just water weight. Almost anyone can drop five pounds temporarily by not drinking water for 20 hours (I do NOT recommend this). The reason I bring up weight is because it looks like Santos has to drop around 10 or more pounds for this fight. By making the title a 145 lbs title, Carano has done a good job setting the fight on advantageous terms.

If Carano survives the first round--and that's a big "if"--the fight is hers to lose. I don't think Santos is going to fight well if she has to lose 10 pounds or more. Santos usually wins by stand-up boxing, a strategy that requires speed, power, and stamina. I don't see Santos being quick or powerful after dropping 10 pounds or more.

Update: Cyborg beat Carano in the first round. Like I said, the fight was Carano's to lose, but only if she survived the first round.

2. I think this is a heartwarming story about love, but some people disagree. (Laura Munson, Modern Love)

3. Interesting story about Christian Arabs in the Middle East here.

4. According to National Geographic (June 2009), the corn used to make a 25-gallon tank of ethanol would feed one person for a year. Priorities, priorities.

Thursday, August 13, 2009

Random Thought: President Obama

Why can't any comedians do a good impersonation of President Obama? Will Ferrell did a great George Bush II. Dana Carvey did a great George Bush I. Tina Fey did a great Sarah Palin. Darrell Hammond did a great Bill Clinton. But so far, I haven't seen a good President Obama impersonation.

A Japanese-American Hero Dies

Judge Robert Takasugi recently died. Post-9-11, he was one of the few judges in the country that demanded our government follow the Constitution.

When weighed against a fundamental constitutional right which defines our very existence, the argument for national security should not serve as an excuse for obliterating the Constitution.

[from United States v. ROYARAHMANI (June 2, 2002, Central District of California)]

Perhaps Judge Takasugi's skepticism had something to do with being interned by the American government during WWII.

According to the NY Times obit (Bruce Weber, 8/8/09), Judge Takasugi "never forgot the experience of internment":

“I was a consequence of history...In 1942, as an 11-year-old child born in Tacoma, Washington, I became a prisoner of war imprisoned in an American-style concentration camp by the country of my birth. I vividly recall the military guard towers manned by armed soldiers surrounding the perimeter of the high-fenced walls which separated us from the free world. There were no formal charges, no right to face and confront the accusers, nor a right to a trial or hearing. Imprisonment was based on the accident of ancestry.

“From this unfortunate history, a lesson should have been learned that under our Constitution, a truly free government must dedicate its powers to and for the people, and that our representatives must adopt this commitment with integrity as a nondelegable duty and responsibility.”

Even though it took some time, Judge Takasugi is a living embodiment of America's promise: freedom to all, regardless of national origin and race. I am glad he lived long enough to see the American public catch up to him. I just wish he had the opportunity to write an opinion on Guantanamo Bay.

Bonus: Justice William Douglas from Laird v. Tatum (1972), emphasis added:

[S]ubmissiveness is not our heritage. The First Amendment was designed to allow rebellion to remain as our heritage. The Constitution was designed to keep government off the backs of the people. The Bill of Rights was added to keep the precincts of belief and expression, of the press, of political and social activities free from surveillance. The Bill of Rights was designed to keep agents of government and official eavesdroppers away from assemblies of people. The aim was to allow men to be free and independent and to assert their rights against government. There can be no influence more paralyzing of that objective than Army surveillance. When an intelligence officer looks over every nonconformist's shoulder in the library, or walks invisibly by his side in a picket line, or infiltrates his club, the America once extolled as the voice of liberty heard around the world no longer is cast in the image which Jefferson and Madison designed, but more in the [Soviet] Russian image."

Tuesday, August 11, 2009

Contempt: Judge Jails a Man for Making Noise

A state court judge has jailed a man for making a yawning noise in his courtroom. See here. Apparently, in Illinois, a state court judge may sentence someone who commits "contempt of court" to six months in jail. (In California, a person found guilty of contempt may be fined up to $1,000, imprisoned for up to five days, or both, for each separate act of contempt. See CCP § 1218.)

The "contempt of court" power allows judges to keep their courtrooms running smoothly. The reason this Illinois judge was able to throw the citizen in jail is because the alleged contemptuous action occurred in his immediate view and presence. No separate notice or hearing is required for "direct contempt"; indeed, according to the United States Supreme Court, "All that is required [for summary contempt] is that an order be made reciting the facts, adjudging the person guilty and prescribing the punishment.” See Arthur v. Sup.Ct. (1965) 62 C2d 404, 407; see also CCP § 1211.

In California, a lawyer’s offensive courtroom behavior may cause him or her to be in contempt. For example, courts have held that the following statements are sufficient to find someone in contempt: “This court obviously doesn't want to apply the law,” or, “You’re not my mother.” To me, these statements don't warrant any jail time. Yet, lawyers are subject to contempt and discipline for making “disrespectful” remarks about judges, even if such statements have merit. For example, courts have held that referring to a judge as a “petty”; accusing a judge of religious bias; or telling a judge his client hasn’t received a fair trial is enough to issue a finding of contempt.

Should judges have absolute power over conduct in their courtrooms? After all, the United States Supreme Court says that such power is necessary “where immediate punishment is essential to prevent demoralization of the court's authority before the public.” See Pounders v. Watson (1997) 521 U.S. 982, 988. In theory, it sounds reasonable. Many people would agree that judges ought to be able to control courtroom proceedings. After all, lawyers get paid an awful lot of money by the hour, and if one person is holding up proceedings, it costs both general taxpayers and clients money.

While the theory is sound, in reality, good judges don't need the threat of jail time or $1,000 fines to control their courtrooms. Which is better? A judge who can maintain order by the force of his words and personality, or a judge who has to use jail time to control an unarmed citizen in his courtroom? (And yes, that's a rhetorical question.)

Let us not forget: judges are public servants. They receive a good salary; lifetime medical benefits; and pensions from the very people who come to their courtrooms and who are subject to their contempt orders. They are also given several staff members who do much of the heavy lifting for them. Why should a public servant be able to throw a taxpaying citizen in jail based on a subjective interpretation of the person's non-verbal conduct? Why are courts--which are government buildings--exempt from free speech rights? Why can't a judge just ask the courtroom bailiff to remove the offending party from the court, thereby immediately ending any potential controversy?

I fear we have given our public servants far too much power. In this day and age, there are precious few judges who actually read all the documents in the cases before them. In my experience, most judges tend to rely on legal memos written by their staff. These memos purport to objectively summarize the facts and law in the tens or hundreds of pages filed by the parties' lawyers. As a result of these memos, many judges have already made up their mind about their cases prior to oral argument and do not bother to read any actual documents filed with the court. Sometimes, a judge's law clerk has even prepared a written order before the hearing. Consequently, most court appearances are either exercises in drudgery or "sucking up." With the typical large county courtroom having over thirty cases to hear in one day, rigorous debate has become impractical. There are dozens of other cases waiting; only a judge with a tremendous work ethic will read all the documents in the cases before him or her; and most motions raise procedural, not substantive, issues.

It would be more honest to put judges' law clerks--who research and write the legal memos--on the bench during oral argument, but this kind of honesty would destroy the image of judges as hard-working, caring public servants. As long as image is important to the appearance of order, law clerks will remain in the audience or jury box, silent and unassuming.

It isn't unreasonable to believe that the courts' overloaded dockets and generous staff have caused intellectually untenable conditions. For instance, a lawyer who prepares for court hearings is disfavored, because he or she may raise facts not in the law clerk's prepared memo. For example, when I've mentioned facts or law not in the judge's memo, I've had judges immediately change the subject and point to the front page of my papers and mention formatting issues that had nothing to do with the case itself. One time, a judge who didn't read the documents told me that my writing was disorganized and asked me to identify the specific page I was referring to. This deft maneuver allowed the judge to get up to speed on the spot. (As for being "disorganized," the sentence I was referring to was in bold font and couldn't be missed by anyone who had read the papers.) I've even had a judge say the wrong name of a plaintiff's supervisor in an employment case. (Did I correct the judge? Of course not. If I did, I would have given the judge an incentive to rule against my client or find me in contempt.) I have more stories--like the time a judge held me in contempt, never issued a written order, and later verbally revoked the finding of contempt--but I'll save them for another day.

There is no question that going "off-script" puts a lazy judge in a bad situation. If a lawyer raises an issue that isn't in the legal memo, the judge is clueless but has to act knowledgeable to prevent being embarrassed in front of his or her staff and the audience. Thus, a lawyer who intentionally or unintentionally reveals a judge's ignorance of the case creates problems for a judge. As a result, the lawyer who forcefully argues his client's case and disagrees with a judge is more likely to be deemed as "disrespectful" by a lazy judge than a judge who has read the papers and can use logic to refute the lawyer's arguments in open court. Therein lies the problem with allowing judges wide latitude to issue "direct contempt" orders. A good, hard-working judge who is familiar with a case probably won't need to use contempt powers against any lawyer; in contrast, a lazy judge concerned with saving face will use contempt powers to prevent being embarrassed. The moral of the story is this: the tool of contempt is used mainly by inept judges.

Amazingly, rather than checking the power of egotistical, lazy judges, the United States Supreme Court has assumed all judges are reasonable persons who can be trusted with almost absolute power. Perhaps as a result of its rosy assumption, the Court has erred on the side of giving lower-court judges more, rather than less, latitude to use contempt to maintain order. Unfortunately, the Court's rationale is flawed. The "contempt of court" power isn't necessary even for lazy judges to maintain order or to save face. A lazy but decent judge will, when presented with an issue not raised in his or her memo, defer to the other side. In other words, the lazy but honorable judge will turn to opposing counsel, who has read the documents, and expect the other lawyer to fill in the gaps. Some very wise judges don't ask any questions at all in their courtroom, making it almost impossible for a lawyer to have cause to say something out of line.

While "contempt of court" is useful to maintaining order, too often, it allows lazy judges to prevent participants from embarrassing them. Indeed, judges who don't read the papers are the ones being disrespectful to the legal process by causing lawyers to argue less forcefully, which penalizes diligence and inhibits strong debate. Surprisingly, while many people believe government workers have incentives to work as little as possible, they also believe that judges--who are government employees--are above laziness and pettiness. In the end, a judge who needs to use contempt orders and sanctions to maintain decorum probably shouldn't be a judge. Judges should use the power of contempt to prevent violence or to punish persons who intentionally violate written court orders. The real risk of public "demoralization" comes from out-of-control judges who abuse their contempt powers.

Bonus: here's an interesting piece on Judge Manuel Real aka Manny Real, who once "jailed five antiwar spectators for failing to stand as he left the courtroom." Perhaps Judge Real is Southern California's version of NoCal's Judge Samuel Conti. Judge Conti once sanctioned me around ten thousand dollars without bothering to give me a court hearing. When I called to ask for a hearing, he and/or his staff immediately sent the file back to state court, where he thought the case belonged (the sanctions were related to his belief that I should have kept the case in state court). The party that requested the sanctions later declared bankruptcy. I love karma.

FBI and Clarence Darrow

The FBI has published its report on famous lawyer Clarence Darrow. (Warning: PDF File) Here is the link to the full report. The report contains excerpts from an interview with Mr. Darrow. Below is my favorite part of the interview:

"The litigants and their lawyers are supposed to want justice, but, in reality, there is no such thing as justice, either in or out of court...In the last analysis, most jury trials are contests between the rich and poor."

Mr. Darrow was a smart man. Most of his statements focus on jury selection. In other words, Mr. Darrow (correctly) believed that jury selection matters more than the law itself.

Monday, August 10, 2009

Two Views on the Economy

Two interesting views on the economy and whether the recession is over:

1. Schwab's Liz Ann Sonders says it might be over.

2. Dennis Gartman says it's over.

Now read this and this:

For years, governments have been promising generous medical benefits to millions of schoolteachers, firefighters and other employees when they retire, yet experts say that virtually none of these governments have kept track of the mounting price tag...

Actuaries say that about 5.5 million retired public employees have health benefits of some kind - and accountants joke that there are not enough actuaries in the country to do all the calculations necessary to estimate how much all these retirees have been promised...[In contrast,] Today, only one in 20 companies still offers retiree benefits, according to Don Rueckert Jr., an Aon actuary.

Rosy economic projections belie the public sector's debt bomb. At some point, taxes must be raised to cover public sector pensions and lifetime medical benefits. Once taxes increase, non-government workers will have less disposable income. The less disposable income, the less people can spend. The less spending, the lower our economic growth--as long as our economy is driven by consumer spending.

The only solution to the death/debt spiral is to cut spending, which includes cutting public sector benefits. Does this mean that teachers and other government workers must get paid less? No. What it means is that government benefits must be brought in line with a regular American's benefits. Instead of a pension, police officers, teachers, lawyers, judges, and other government workers should get a 401k or 403b plan. Instead of guaranteed lifetime medical benefits, government workers should get the same medical plan everyone else gets--employer-subsidized health care while employed, COBRA if terminated, and then Medicare when the time comes. Economists who praise the so-called economy recovery are not taking into account long-term debt liabilities. We need to cut spending, and all we've done so far is use accounting tricks to hide the massive debt we're giving to our children and grandchildren. That's not just irresponsible--that's immoral.

Kudos to the NY Times' Milt Freudenheim and Mary Williams Walsh for being ahead of the curve. Their article on GASB 45 was published in December 2005.

Sunday, August 9, 2009

My Favorite Comic Strips

In case you're interested, there are only three comic strips I read regularly: Pearls Before Swine, Get Fuzzy, and Tom Toles. Check them out, especially Tom Toles.

Dancing Cheek to Cheek

Money Quotes

Two interesting links (Link1 and Link2) to quotes about money--here's one that caught my eye:

"If you want to be slaves of bankers and pay the cost of your own slavery, then let the bankers control money and control credit.” — Sir Josiah Stamp, Director, Bank of England, 1940

More here.

Saturday, August 8, 2009

Quote of the Day

I can't cite a source for this one (I just woke up and haven't had my tea), but I love it:

"Experience should teach us to be most on our guard to protect liberty when the government's purposes are beneficial. Men born to freedom are naturally alert to repel invasions of their liberty--by evil-minded rulers. The greater dangers to liberty lurk in insidious encroachment by men of zeal, well meaning. but without understanding."

-- Justice Louis Brandeis, U.S. Supreme Court Justice

Military-Industrial Complex

Did someone say something about a military-industrial complex?

"Military [expenditures are] now...8% of all durable goods, up from 3% in 2000." might wake up Eisenhower.

Friday, August 7, 2009

San Francisco Chronicle: U.S. Citizens Wrongly Deported

The SF Chronicle is doing a great job writing hard-hitting pieces. Here is one particularly good article on our convoluted immigration laws and procedures.

I've said before, and I'll say it again: America's immigration laws give too much power and discretion to unelected government workers. With such power, you'd think there would be better checks and balances in place, or at least incentives to expeditiously process applications.

For example, immigration authorities delayed processing my application for a citizenship certificate, even though they cashed my check and there was no dispute as to my citizenship. I was already a citizen, I had a passport, and I just wanted the actual certificate. Sounds simple enough, doesn't it? Yet, it took me several emails to Senator Diane Feinstein's office to get a copy of my citizenship certificate--years after I'd paid the fee and received citizenship. Did anyone at the BCIS get punished for improperly sitting on my application for years? Probably not. There's no way for me to tell who handled my application or whose responsibility it was to process it. Even when I buy underwear, there's a sticker that tells me who inspected it. Isn't it sad that underwear sales have better safeguards in place than immigration laws?

In fact, immigration lawyers have one of the least expensive costs for malpractice insurance policies. Why? Because if the lawyer loses the case, the client--often someone who doesn't speak perfect English--leaves the country, making it difficult, if not impossible, to file a malpractice lawsuit. The entire system is obviously screwed up when it takes multiple contacts to a U.S. Senator to get a certificate confirming a citizen's existing status.

I'd like to thank Senator Feinstein's office for helping me when I had this issue. I don't know which individual in her office helped me, but I'd like to thank her, too. Without their help, I probably would have never gotten my citizenship certificate.

Thursday, August 6, 2009

Hit Job on Megan McArdle

I like the Atlantic Monthly and sometimes read Megan McArdle's blog. So imagine my surprise when I saw this article, which is basically an all-out attack against Ms. McArdle and her family. I hope she responds.

Steven Lagerfeld: We've Made a Bad Bet on Taxes

The WQ's Steven Lagerfeld opened my eyes to the risky, two-way bet of tax cuts:

In another way, today's red vistas of debt recall the era of tax cutting under Ronald Reagan. The Reagan Revolution was in part a gamble: Cut taxes, and an alarmed public will demand budget cuts in order to avoid red ink. Now we may be witnessing a kind of reverse Reaganism: Increase the size of government and gamble that an alarmed public will eventually authorize the taxes to pay for it. [From Wilson Quarterly, Summer 2009, Vol. 33, No. 3, page 4]

Mr. Lagerfeld is absolutely correct--by refusing to cut government spending, we failed to uphold our end of the tax bargain. It seems that voters will always demand the same level of services or increased services; as a result, cutting taxes--which reduces revenue available for government services--might actually be a slow suicide pact. Californians just don't seem to have the stomach to cut spending, even when the money isn't there to provide the same level of services. Perhaps some kind of counterproductive but ingrained psychology is involved--after all, once you've tasted gourmet food on a regular basis, it's almost impossible to go back to the frozen microwave dinner--even if you have less money to spend and should be cutting back.

If Mr. Lagerfeld and I are both correct--that the bet on lower taxes failed, and once spending is increased, it's almost impossible to cut services--then cutting taxes should not be the main focus of any government policy. Instead, we ought to be focusing on the following areas: first, having a consistent tax policy to attract business and minimize inflation; second, requiring all new government programs to terminate at the end of the following fiscal year if sufficient revenue to fund the program does not exist; and third, to pass a balanced budget amendment to each state's constitution.

Wednesday, August 5, 2009

Marriage, Dating, Housing, and the Tax Code

A. Men and Women Approach Marriage Differently

Housing investors and fans of Robert Shiller's MacroShares Major Metro Housing Up ETF (UMM) should pay attention to the dating scene. The WSJ recently had an article on Japanese dating trends. The following sentence from the article caused me to examine a link between modern marriage and housing prices:

Experts say that in tough times, single women feel an urgency to get married for financial stability, while men tend to put off marriage until they feel they can afford it.

I agree with the sentiment expressed above. If my thinking is typical, then pro-marriage advocates should promote low inflation. If a person has steady wages, s/he will probably want to buy a house. Once s/he buys a house and has steady wages, then marriage and children become the next natural step.

Of course, people may marry and have children without owning a home, but most women want a stable place to raise their children. This is sometimes called the "nesting instinct." This nesting instinct is one reason housing prices and marriage are inter-related, especially because first-time homebuyers heavily impact housing demand and sales. If you still don't see the connection between marriage, children, and housing prices, listen to Barry Ritholtz:

A newlywed couple buys a starter home from a family (with another child on the way), who are moving to a bigger home, and whose seller is moving to an even nicer part of town, and so on. It is a long chain, not of mere lateral moves, but increases in size, cost (and property taxes). If any of those sales fall through, the entire chain collapses...Can they [the newlywed couple] afford that starter house? If not, then the entire real estate chain is frozen.

In his example, Mr. Ritholtz uses a married couple expecting children. But if houses are too expensive, then the typical younger person will delay marriage because s/he will not overpay for a house and/or will be concerned about taking on too much debt. Also, if a typical younger person's net worth is low, then s/he will not have a financial safety net and will be disinclined to purchase a house due to the fear of missing monthly mortgage payments. It takes time to build a financial safety net, so we may assume it will take several years before a typical younger person will be able to purchase a home. Thus, in an area with expensive homes, the typical person in his or her 20's and 30's is likely to delay getting married and having children. These seem like reasonable assumptions. The question is whether such assumptions rationally lead to the following conclusions:

1. If the government removes the home capital gains exemption and the mortgage interest deduction, then homes will become more affordable;

2. People are more likely to marry and have children if they can afford a home;

3. Therefore, to promote marriage, the government should not subsidize home purchases and sales.

B. America's Tax Code Encourages Perpetual Housing Inflation

The more I think about it, the more I believe our taxation system is anti-marriage because it encourages housing inflation. So many people complain about Greenspan and derivatives when discussing the housing bubble, but what about the tax code itself? Our tax code almost guarantees steadily increasing housing prices because of the mortgage tax deduction and the $250K exemption on capital gains when selling a primary residence. No other investment receives such generous tax treatment.

The higher the price of a house, the longer a person has to save up to buy one. If single family houses become really expensive--like 500K+, which is still typical in the Bay Area--then the idea of saving a 10% to 20% down payment before the age of 35 becomes almost impossible. This is common sense, but if you're not convinced, just look at the Federal Reserve's numbers. According to the Fed (PDF file: February 2009 report, page A11), in 2007, the median net worth of an under-35 years old person in America was only $11,800--down from an astounding $80,700 in 2004. The median net worth of someone 35-45 was a much more respectable $86,600. Based on these numbers, and assuming banks will require at least a 10% down payment for a mortgage, it is safe to say that the typical metropolitan resident has to wait until around 35 years old to buy a single-family home (not a condo or townhouse). Again, assuming a link between homeownership, marriage and children, the longer it takes for couples to afford a home, the more couples will delay marriage and children.

However, many people get married before they turn 35 years old, and they want to buy a house, prices be damned. How does a bank accommodate a young newlywed's desire to own a home? We've already seen what happens--banks would issue a loan and then pass on the risks to Fannie Mae and Freddie Mac. They did this because the tax code encouraged and continues to encourage homeownership. Thus, subsidizing/inflating housing prices when wages do not also increase across the board results in funny accounting (e.g., Alt-A mortgages, NINJA mortgages, "liars' loans," etc.), a steadily increasing marriage age (for those who decide to wait), or both.

C. Banks Benefit from the Current Tax Code, Not the Average American Family

If we are truly concerned about marriage and birthrates, isn't it time to re-examine the mortgage tax deduction and the government's plan to re-inflate housing prices? After all, the current tax system benefits banks and mortgage lenders more than the typical American family. By subsidizing houses so heavily, the American government is inflating the value of an essential asset and giving money lenders tremendous power over our lives. Our parents didn't have such high levels of mortgage debt, and they managed just fine. Heck, our grandparents would probably start a revolution if they were under our current system. If you think I'm overstating my case, research American history, especially the Great Depression. One of my favorite sepia pictures shows about fifteen Americans protecting a house from foreclosure. Anticipating the local sheriff, the resident and his neighbors had placed a very visible noose on the front door's awning and stood in the front yard, armed with rifles. I'm willing to bet the sheriff skipped that particular house and the bank wrote off the mortgage.

You don't have go too far back to see how tax incentives have inflated housing prices. For example, there's no question that tax incentives have created housing size inflation. Just look at the size of houses built in the 1950's--they were small, decent houses. American parents did a good job raising kids in those smaller, more affordable houses. Why do we need such large houses today? Who benefits from these larger homes? The developer and bank, which charge prices based on square footage, or the typical homebuyer? Is it really worth delaying marriage and having fewer children so we can pay the bank an extra ten years' worth of mortgage interest and principal?

I'm really getting off-topic now, but there is also an interesting sociological issue with allowing the tax code to inflate housing values. More specifically, couples on the coasts and in metro areas need two incomes to own a decent single-family home. This two-income requirement skews the dating game in favor of both high-earning men and high-earning women; as such, it devalues hopeful stay-at-home parents. If a man or woman is an excellent homemaker but does not earn much money, s/he may be at a disadvantage when "competing" for a long-term relationship. As a result, a woman might be an excellent secretary, waitress, and/or mother, but her "value" will be less in an area where two incomes are necessary for homeownership. By using the tax code to inflate housing values, one could argue our government has placed women who are interested in having and raising children at a competitive disadvantage.

My conclusion: if you want to fix the marriage problem and avoid another housing bubble, re-examine our tax incentives. Encouraging inflated housing prices isn't the best way to keep a nation growing, and it doesn't encourage upward mobility. (It sure does help the banks, though.)

Bonus: from USC College Magazine, Spring/Summer 2009, page 30, Laurie Hartzell's interview of Simon Wilkie:

He adds that the relationship between median income and the median price of a home is an indication of the state of the economy. "If the average person can't afford the average mortgage, then the housing market is in trouble, and the prices are going to come down. It turns out this is a really good rule of thumb." [Despite this rule of thumb, the government is trying to increase the cost of mortgages through inflation.] Although no one will admit it, Wilkie stated, a large portion of the stimulus package will be inflationary. "One way to get people out from being under water on their houses is to inflate the value of houses back up." A massive program of inflation would solve the foreclosure problem, but the fix would only be temporary.

Bonus: added on March 30, 2015: from MIT grad Matthew Rognlie:

"Land/housing is really one of the only investments that give wealthy people a long-term leg up. "

"It might be wiser to redirect anger towards those who get in the way of new housing, rather than rely on taxes to solve our problems."

"Just 14% of homes are affordable to middle-class families. In the once diverse Mission District, where many young tech workers are now relocating, it's hard to find a new home for less than $1.5 million."

"The government should focus more on housing policy and less on taxing the wealthy, if it wants to properly deal with the inequality problem."

Bonus: added January 2017: see link HERE and HERE for more on this topic.

Bonus: added March 2017: more HERE on how the mortgage tax deduction leads to excessive reliance on the financial sector.  

Tuesday, August 4, 2009

Sell Before It's Too Late?

Yesterday, I sold almost all my equity-based positions. I also called my sister and suggested she sell all of her stocks and mutual funds. Of course, you should do your own due diligence, but as of August 3, 2009, the S&P 500 closed at 1002.63, an annual high. The potential for further upside does not seem to justify the risk of holding equities. My remaining major positions--held in a retirement account--include only an inflation-protected bond fund; a GNMA fund; and a corporate bond fund.

My earlier prediction that the S&P would rise to a range between 920 to 950 proved accurate. I made my prediction on April 1, 2009, when the S&P was only 811.08.

More recently, on July 2, 2009, I bought commodities, especially natural gas commodities. Within a month, some of these positions increased almost 20%.

Any economic "recovery" without rising employment will be short-lived. Right now, I see unemployment staying at 7 to 9%, which will suppress wages and disposable income. We will know more on August 7, 2009, when the BLS releases the unemployment numbers.

At some point, it will make sense to jump back in the stock market. Right now, though, I agree with Hilary Kramer's analysis, which can be found here.

Update on June 11, 2010: the S&P 500 was 1002.63 when I made this post. The S&P did go down to 979, but then rose to 1086.84 over the next ten months or so--an 8.4% gain. Although I was wrong about the stock market's direction, the other investments I mentioned--GNMA and TIPs--also had decent gains when including dividend/interest payments. Also, I correctly predicted the unemployment numbers. Where will the stock market go next? I have no idea, but my personal tolerance for risk has gone up. When people start talking about the disintegration of the EU and the collapse of the Euro, maybe it's time to go contrarian--as long as you have 20 to 25 years to wait.

Disclaimer: The information on this site is provided for discussion purposes only. Under no circumstances do any statements here represent a recommendation to buy or sell securities or make any kind of an investment. You are responsible for your own due diligence. To summarize, I do not provide investment advice, nor do I make any claims or promises that any information here will lead to a profit, loss, or any other result.

Public Sector Pensions and Politics

The SJ Mercury points out that public sector pensions are based on unrealistic actuarial projections. See here:

The current level of benefits is built on an assumption of an 8.25 percent annual gain on investments after expenses for Federated, and 8 percent for safety workers. These unrealistically high assumptions leave taxpayers solely on the hook when returns come up short, as they have — drastically — the past two years...

City Council members are reluctant to confront unions on bread-and-butter issues and, with term limits, have little incentive to tackle long-term problems. But if nobody faces up to this, a taxpayer revolt is inevitable. And waiting will only make things worse.

Find me an investment advisor who can guarantee 8.25% annual gains in perpetuity, and I will show you a Brooklyn bridge for sale. (For the record, Madoff doesn't count.)

Monday, August 3, 2009

Gates-gate is about Police Power, Not Race

From Above the Law:

As Radley Balko argues in Reason, "[t]he conversation we ought to be having in response to [Gatesgate] isn't about race, it's about police arrest powers, and the right to criticize armed agents of the government."

More on Gates-Crowley here.

Sunday, August 2, 2009

Sigma Designs Inc's (SIGM) Shareholder Meeting (2009)

I attended Sigma Designs Inc.’s (SIGM) shareholder meeting yesterday, July 30, 2009. About eleven people attended, mostly company employees. The company offered shareholders juice, soda, mineral water, cookies, and cherries. CFO Thomas Gay handled the formal portion of the meeting and then turned the meeting over to Kenneth Lowe, VP of Business Development and Strategic Marketing. Founder, CEO and Chairman Thinh Q. Tran played a more reserved role in the meeting, helping Mr. Gay and Mr. Lowe answer some of the more technical questions.

Sigma Designs provides system-on-chip solutions (SoCs) for third parties, primarily in the home entertainment area. It dominates in the area of IPTV set-top boxes, where, according to Mr. Gay, it controls approximately 80% of the market. Its main competitors are STMicroelectronics NV (STM) and Broadcom (BRCM).

Here are the highlights from Mr. Lowe’s presentation.

1. Internet Protocol Television, otherwise known as IPTV, is a technology by which video is delivered to the home. It relies on broadband rather than more traditional formats.

2. Some of Sigma’s customers include Motorola, Cisco, Samsung, Sony, Celrun, Dasan, WD/Cowin, UT Starcom, and Netgem.

3. Sigma provides its SoCs to numerous telecommunication service companies, including the major players in the home broadband market.

4. For fiscal year 2009, Sigma had $209 million in revenue, with a net income of $26.4 million.

I asked several questions, and Mr. Lowe, Mr. Gay, and Mr. Tran answered all of my questions thoroughly.

I mentioned that 94% of Sigma’s revenue was from outside the United States, and asked why they did not hedge their currency risk. [10K: pages 18-19]. Mr. Gay said it was unnecessary to hedge any currency risk because all billings/prices were in U.S. dollars. Billing in American dollars may help Sigma compete with Swiss-based ST Micro (STM), which currently reports earnings based on the stronger Swiss franc. (Mr. Gay said he believed the company was French, but Yahoo Finance lists STM as headquartered in Geneva, Switzerland.)

I mentioned Sigma’s relatively small net income and asked Sigma whether it would be better served if it went private. As a private company, it would not have to comply with regulations imposed on public-traded companies and could better focus on its core business. Mr. Gay said that having publicly available stock allowed the company to “compete for talent”--in Silicon Valley, where companies have to compete for talent, employees will favor companies with publicly-traded shares. Mr. Gay also explained that Sigma’s publicly available stock could be used for acquisitions (which would allow Sigma to conserve its cash).

I asked what gave Sigma’s products an advantage in the marketplace, i.e., what constituted Sigma’s “wide moat.” Mr. Lowe told me that Sigma provided “full solutions” in the IPTV streaming business and Sigma’s technology was more “resilient” than competitors’ products. He indicated that Sigma’s products minimize data “packet loss” and disturbances (more so than the competition). He also told me that Sigma had “deeper roots” in the hi-def area than any other competitor. For example, he said, Sigma adopted the Windows Media Standard before anyone else.

I asked a question about Sigma’s financial restatements. Mr. Gay told me “those issues are behind us” and the last time the SEC had contacted Sigma about its financial restatements was in 2006.

Another shareholder criticized the smaller board of directors and the presence of the same three board members on three different committees. The shareholder also asked why insiders were selling shares. Mr. Gay said that insiders were selling shares primarily because of option expiration dates, and Sigma would be using more restricted stock grants to encourage long-term investing. Mr. Gay also said he regretted the company’s stock buyback plan, which was now completed and which caused the company to buy its own shares at the relatively high price of $20.50 per share (SIGM now trades at around $16/share).

The same shareholder pointed out that Sigma was focused on discretionary consumer products, which are being affected most severely in the current recession. Mr. Gay responded that telecommunications companies have not suffered as much as other companies, and despite the recession, some studies projected 30% growth in IPTV sales.

After the meeting, Mary Miller, Director of Marketing, treated shareholders to a product demonstration. It was fascinating to see the technology come alive. Basically, Sigma partners with other companies like Schlage to provide home control products. Sigma supplies the chips in the set top boxes and other devices, which allow third parties to offer unique consumer products. For example, for under $500 (not including the television), you can set up a home that Bill Gates would be proud to own. When we walked into the demonstration room, Ms. Miller adjusted the light, blinds, and temperature using just a few buttons on a remote control. Within seconds, the room went from regular lighting to the perfect movie and TV-watching environment. I had only seen such home entertainment options in movies like Iron Man, so it was fun seeing everything in person.

But Ms. Miller wasn’t done. Using Schlage’s software and gateway (which used Sigma’s Z-Wave chip), she also demonstrated how you could open the door to your home from anywhere in the world, as long as you had internet access. For example, let’s say you left something at home and you wanted your friend to get it for you. With Schlage’s program, you could open your house’s door using a laptop. (Perhaps if Harvard University had invested in this technology, the situation involving Professor Gates and Officer Crowley would have never occurred.)

You can also activate home cameras from your iPhone or your laptop and check on your teenage children or other residents. Ms. Miller joked that from anywhere in the world, parents could have firsthand knowledge about whether their kids were at home and doing their homework. When I asked how much all this would cost, I received price estimates of $12.99/mo for Schlage’s software and about $500 for the lock, gateway and cameras. In terms of home control options, the future is here, and it’s surprisingly affordable.

With Sigma’s strong balance sheet and connections with established companies, it may become a potential takeover target. Right now, however, its revenues need to increase in order to boost its stock price and market exposure. Even so, in this economy, Sigma should be lauded for making a profit while its competitors posted losses.

Disclosure: I own fewer than ten shares of Sigma (SIGM).