Monday, June 5, 2017

When at Baidu, Be Sure to Meet the Bear


Baidu (BIDU) is one of China's largest technology companies. Its Bay Area campus is well-designed. I'm saddened by how few international companies get mainstream media attention in America.  Turkey, China, and other countries have major consumer companies but their products don't generally make it to American consumers because of complex trade agreements. Anyone who thinks free trade exists should watch the documentary Black Gold (2006). 

Tuesday, May 30, 2017

Legal Rights without Economic Access are Worthless

"You can have all the rights in the world, but if you can't enforce them, they're not worth very much." -- Justice Ruth Bader Ginsburg 

Too many people confuse written laws with actual implementation.  If a law is passed saying that men and women must be paid equally, it does not mean men and women will be paid equally.  The person who believes he or she is being paid unequally has to find a lawyer; convince the lawyer to take his or her case; pay the fees to the lawyer and the courthouse; and then wait months or years to get a result, which will--in a best case scenario--most likely be some money minus fees and expenses.  If you're interested in meaningful, lasting change, you should see obvious problems with such a system.

First, if law school tuition is 35,000 USD to 55,000 USD a year, and law graduates have 100,000 USD in student loans, how likely is it that the lawyer can or will help front the costs to the person who believes s/he is suffering illegal discrimination?  Litigation costs even before trial can easily run around 8,000 USD, depending on the number of depositions and motions filed.  In almost all civil cases, the losing party pays the costs of the prevailing party, which may sometimes require payment of the other side's attorneys' fees.  What about nonprofit legal aid centers?  They usually rely on volunteer lawyers, and you're dependent on whether they choose to take your case--which depends a lot on their funding, staffing levels, and random assignment to a particular employee or volunteer of varying skill level. Lesson: at the end of the day, the law needs money to work and even with money, may do little to actually fix underlying problems.

Second, how does the lawyer know whether the plaintiff's belief is objective or subjective? In most cases, the potential plaintiff will not arrive with printouts of everyone else's salaries or benefits, and the lawyer must initially evaluate the plaintiff at his or her word.  Even if the plaintiff is correct, where will the costs and fees come from to file a complaint and get the necessary documents and evidence if the plaintiff has been terminated or does not have enough savings? If the lawyer fronts the costs out of his or her own pocket and realizes the plaintiff is wrong, should the lawyer be able to sue the client for the costs, knowing that doing so will increase the chances of receiving a malpractice or state bar complaint? Lesson: at the end of the day, the law needs money to work and even with money, may do little to actually increase substantive rights.

Third, how does the new lawyer know which judge will be assigned to the case, and whether the judge is inclined to be more open minded or close minded?  Cases are randomly assigned to judges when filed.  The judge may not know the new lawyer, and the new lawyer may be against a lawyer well-known to the court.  Even if the plaintiff is correct, what if the judge doesn't believe the type of evidence presented is sufficient to warrant a jury trial? Lesson: the law is often dependent on randomness.

More examples to ponder:

1.  Many states have the death penalty on the books.  In 2016, however, only 5 states actually executed criminals.  Within those 5 states, 20 people were put to death.  The death penalty in America is now basically a taxpayer-funded lawyer, investigator, and prison guard employment act than a deterrent. The cost to house a death row inmate in California is $90,000 more per year than for other inmates, with much of the cost arising from state legal requirements relating to government-funded lawyers. Lesson: the lawyers always get paid, regardless of results. [Update on June 20, 2017: California has not actually executed anyone since 2006.]

2.  After Brown vs. Board of Education (1954) outlawed segregation, many cities and states passed laws trying to evade the impact of the case. To challenge such laws required more lawyers and more lawsuits.  Now, it appears we're back to square one: a 2016 report released by the non-partisan Government Accountability Office "shows that the number of schools segregated along racial and financial lines more than doubled over a 13-year period ending in the 2013-14 school year." Lesson: the teachers, administrators, and lawyers always get paid, regardless of results.

3.  Abortion is legal in America.  In 2011, 94% of abortion procedures, including both surgical and medication, took place in clinics. As of 2015, there were 517 surgical abortion clinics and 213 medication abortion clinics in the entire country, and some states had no clinics.  The cost of an abortion is about 500 to 600 USD.  You are a teenager who has an unplanned pregnancy and want an abortion.  You do not have 500 to 600 USD.  You can apply for indigent healthcare programs, but your ability to get coverage depends on the random assignment of at least one person to assist you.  Lesson: the law, even when it's funded in your favor, makes you dependent on random government or nonprofit employees.

The overall lesson is not to scrap our legal system, but to realize if given a choice, voters should think of taxes as a way to create a certain society.  For example, would you rather your taxes create a society with predictability and higher welfare payments in the event of a job loss, or one where terminated employees experience more randomness with a larger potential payoff?