Where I Get Schooled

How are stocks up so much? There's been no serious financial reform; no withdrawal from various wars; no fiscal fix for public employee pensions or private sector pension shortfalls; and still 10%+ unemployment in major cities. The S&P 500 was only 831 when President Obama took office...stocks are up 41% since his inauguration. Are President Obama and the Dems really that good?

In response, one friend mentioned America's 0% interest rates, which help banks but hurt savers. The best answer, however, came from a former high school classmate:

From the corporate side, it seems fairly plain to me. There's been no financial reform to tighten screws on corporations. The government is still spending a lot of money on wars. The debt, while burdensome, hasn't caused any major calamities (so far). High unemployment means lower payroll costs. Add a very low fed rate on top of this and it looks like a very favorable business climate. Even if revenues are sluggish due to low consumer spending, margins are probably up.

Thanks to Andrew N. for schooling me.

Note: when I posted my comment above on Facebook, the S&P 500 was 1171 and the Dow was 10,896.

Some Snippets from Recent Reading

From Milton Friedman, on death by a thousand taxes:

We are not going to vote anyone out of office because he imposes a $3-a-year burden on us.

From Nicole Gelinas, City Journal Spring 2010, on municipal bankruptcies:

State governments can't legally declare bankruptcy to escape debt: the federal bankruptcy code doesn't cover them, and they can't write their own bankruptcy laws because the Constitution reserves that power for the federal government. Cities, towns, and counties, meanwhile, can file for bankruptcy only if their state governments allow it, and more than half of the states don't. Moreover, federal law requires eligible cities and towns to meet a strict standard for insolvency.

From James Madison, on power:

All men having power ought to be distrusted to a certain degree.

Google's Annual Shareholder Meeting (2010)

Google held its annual shareholder meeting on May 13, 2010. Google offers shareholders a free lunch every year. The picture above shows the kind of food available (in case you're wondering, yes, I did stuff my face). I really enjoyed the rice and chocolate eclairs.

Google typically posts a video of its annual meeting on YouTube as well as a transcript prepared by a certified court reporter, so there's plenty of information about the meeting available to the public. (See here for another review.)

CEO Eric Schmidt briefly mentioned Google's great results, saying "All is well after a year of great turmoil." During the meeting, Mr. Schmidt showed a fun commercial for Chrome called "Chrome Speed Tests," which highlighted the web browser's incredible speed.

I thanked Larry Page for showing up this year and asked him what he thought was the next "big thing." Mr. Page said that Google Translate is going to be a game-changer. The two-thirds of the world's population not yet online will greatly benefit from fluid translation services, which can be used in telephones and other mobile devices.

CEO Schmidt mentioned Google's plan to enable people to text-message in their native language and have it automatically translated into the receiver's native language. Although most of the world's populations do not have ready internet access or computers, many people have mobile phones, even in so-called "Third World" countries, so an effective translation service would connect almost the entire world together. Later, I thought about how an automatic translation service could preserve some little-used languages, which in turn could help preserve a small country's or people's cultural heritage. I also think it would be wonderful if a small business-owner who speaks only English could sell products directly to someone in China or other countries. Down the road, if Google creates a program that translates spoken languages, American business-owners could more easily hire and sell to immigrants who may have difficulty speaking perfect English. In addition, older immigrants--who may have difficulty learning and speaking English--would be able to communicate better with their grandchildren and the general public.

One side note: I thanked Mr. Page for attending this year and said I was feeling sentimental about previous meetings, where the atmosphere was more casual and he and Sergey would be dressed in jeans. Mr. Page immediately gave props to CEO Schmidt, touching him on the arm and reminding me that CEO Schmidt was also present at previous meetings. CEO Schmidt then joked that he also wore jeans at the previous meetings. I thought it was a great moment, because sometimes, founders and successors don't get along (e.g., Accuray, Inc.) and besides, who doesn't love a billionaire bromance?

Google had a product demo section, where I discovered sites.google.com. I coach youth basketball, and I've always wanted to create a website for my teams, but I've never had the time. Well, Google has already done it for me and other coaches. If you go to Google's "sites" page, you will find a template called "Soccer Team" that can be used to post game times, agendas, and pictures. It's a ready-made website that community centers, YMCAs, and private clubs can use to help streamline programs and help their players keep in touch.

There were some embarrassing moments for Google. Google received multiple complaints about the responsiveness of its Investor Relations department. One shareholder complained that Google took three weeks to return her phone call. Another shareholder said she was unaware of the annual meeting because she never received a proxy or an email notification and made it to the meeting only because a friend told her about it.

After the meeting, several shareholders went to the front to speak with CFO Patrick Pichette about their issues receiving proxy materials and notices. Mr. Pichette was very patient and explained that Google may be slower to respond to individual phone calls than other companies because of its engineering mindset. He said that Google was an engineering company, and engineers tend to think that if something is done properly, all the information is available online and there is no need to pick up the phone.

I don't understand why the company's CFO was handling these kinds of complaints. Typically, routine shareholder complaints would be handled by Investor Relations, not the CFO. At the same time, perhaps CEO Schmidt didn't feel comfortable referring shareholders to Investor Relations because shareholders were complaining about that particular department.

I've raised issues with the way Google's Investor Relations Department treats shareholders before. For one thing, Google doesn't permit any questions or comments during the shareholder proposal portion of the meeting. It allows a shareholder to set forth a proposal and then moves directly to a vote. If other shareholders have information or comments about a particular proposal, Google does not allow them to express themselves until after the proposal has been voted on, making comments a moot point. A more reasonable course of action would be to allow comments, but to limit the comments to one minute or less.

After the meeting, I spoke with someone in Google's Investor Relations, and she didn't seem entirely happy to talk to me. Not only that, but she didn't have any business cards on her. Google gets one day a year to interact with individual shareholders, and its Investor Relations employee doesn't have a business card to give shareholders? (At all the other shareholder meetings I've attended, Investor Relations has provided me with a business card if requested and actively encouraged me to follow up on any issues I had.) Outside, I ran into the same Investor Relations representative again, and when I asked her whether she had figured out the source of the problems mentioned by other shareholders, she curtly told me, "There was no problem." So let me get this straight: shareholders don't get notice of the meeting, and Investor Relations doesn't think there is a problem? Really? (By the way, I heard through the grapevine that even some Google employees/shareholders didn't know about the annual meeting until they received an email telling them the cafeteria would be closed due to the meeting.)

In most companies, Investor Relations is an overlooked and underutilized department, and I've never understood why. Investor Relations is the first place shareholders look when they have issues with a company, so if the department is stocked with unprofessional employees, the entire company's reputation suffers.

Some companies have wonderful Investor Relations people. Brocade Communications has a particularly excellent department. Tessera Technologies also has a great department. (Props to Sr. Director of Investor Relations Moriah Shilton, who seems like a consummate professional.)

On the other hand, an inexperienced or unprofessional Investor Relations employee can harm a company's reputation. After all, if a company can't manage to properly execute an annual meeting or treat individual shareholders with respect, you start to wonder what else the company can't handle. For example, at Visa's (V) first annual meeting, an Investor Relations representative demanded my name and personal contact information when I took a picture with the CEO. She then told me I couldn't publish the picture. Well, if a CEO is happy to pose for a picture with a shareholder, why bother the shareholder after the picture is taken? Here I was, at a company's first annual meeting as a publicly traded corporation, and I get accosted SS-style. (So far, no other company's Investor Relations department has demanded my papers.)

One year, at McAfee's (MFE) meeting, which was very short, I picked up some cookies and soda and began eating in the conference room where the annual meeting had been held. The Board of Directors also got some food and sat in the same room and started shooting the breeze. So far, so good, right? Well, McAfee's Investor Relations, apparently concerned about my presence, got up and shooed the entire Board into a different room. God forbid she actually introduce herself or the Board to the one shareholder who decided to show up to the meeting. I briefly attended a British elementary school, and yet, my only experience with a schoolmarm type has been at McAfee. (It's a shame, too, because McAfee's CEO is actually a nice guy.)

It's funny--I've attended McAfee's annual meetings twice, and each time, I think I was the only non-employee there. Yet, each time, the company had large tables of food and drink available. It appears that McAfee's Investor Relations department uses the annual meeting to fatten up the Board and treat non-employee shareholders like lepers. What's even worse is McAfee's competitor, Symantec, runs a great annual meeting and gives shareholders free software or other useful items. If you're a consumer company, why give people an excuse to favor your competition?

Anyway, back to Google. One Google employee seemed to think that shareholders could easily print out proof of ownership of shares and bring that to the meeting for admission. The problem is that you have to own shares as of the "record date" to attend the meeting, and the record date is typically several months prior to the annual meeting. So if shareholders come in with a current printout of their holdings, that wouldn't necessarily entitle them to admission, because they could have bought the shares after the record date. I'm not saying these issues are simple, but why have Investor Relations departments if they can't help ordinary shareholders navigate the increasingly complex world of shareholder proxies and regulations?

Shareholders who have issues with their proxies need to be more pro-active. Many Investor Relations employees don't seem to understand the machinations involved in individual shareholder notices because so much of the work is outsourced. Here's my advice to shareholders who stopped receiving annual meeting notices and proxies in the mail: contact your brokers and tell them you want to elect to receive copies of your proxy materials by mail. You have to actively opt back into the hard copy system if you want paper copies of shareholder materials. After July 1, 2007, companies no longer have to mail you hard copies of proxies and may email you a link to their materials on-line. Unfortunately, with all the online spam, some shareholders may not be getting notices because emails are being diverted into their spam folders.

I will close on a positive note. As most people know, Google offers its employees tons of perks, but I discovered two more of them: on-site washers and dryers and smoothies made-to-order, including a delicious banana/chocolate combination.

It's good to be King, and right now, Google is the King. Long live the King.

Tessera Technologies Annual Meeting (2010)

I attended Tessera Technologies' (TSRA) annual shareholder meeting today in San Jose, California. Tessera has acquired various companies and has about 470 employees, with many of them in Charlotte, North Carolina. About 25 people--but only two non-employees--attended the meeting. The company offered shareholders scones, coffee, juice, and various pastries.

CEO Henry R. Nothhaft handled most of the meeting with Bernard J. Cassidy. Mr. Nothhaft introduced the board members, handled the formal portion of the meeting, and then adjourned. Since there were only two non-employees present, the company chose not to present a video; instead, the CEO agreed to talk with me and the other shareholder and answer our questions.

CEO Nothhaft explained that his company's products go into most consumer electronics products, such as PCs, cell phones, and LCD televisions. Tessera has a semiconductor-related business and an Imaging and Optics business. On the semiconductor side, Tessera's technology connects the IC chip to the motherboard. It sounds simple, but consumer products are getting smaller every year, which means that motherboards and their components also have to become smaller.

Tessera's problem is protecting its IP. As more products are made in Asia, the legal framework and culture isn't necessarily conducive to an American company collecting royalties through patent litigation. CEO Nothhaft talked about Tessera's "carrot licensing program," where the company offers incentives to work with Tessera and to pay royalties. Overall, however, Tessera wants to become part of the supply chain in Asia so it can get paid at the time someone uses or buys its products. CEO Nothhaft described the IP issue "like solving a puzzle." He says he wants Tessera to "compete in the domestic Chinese market" for consumer electronics. To that end, Tessera has hired CTO Robert Yung. It has also signed up three new licensees in the China for its imaging/optics products. China currently represents about 20% of the consumer electronics market, and its share of the market continues to grow.

CEO Nothhaft also said that "incremental innovation occurs in the factory." He didn't expand on this concept, but I think he meant that outsourcing manufacturing and distribution may cut costs, but retaining domestic manufacturing allows a company greater protection over its IP and also allows it to work with employees to improve products.

CEO Nothhaft said that Tessera "firmly believes in the patent system" and called the patent one of the "greatest job creation tools." He said he hopes that other Asian nations will emulate Japan and its gradual respect for IP rights. CEO Nothhaft seemed excited about Tessera's optics/imaging business, saying he foresees "rapid growth" in products that use enhancing images, "smart camera modules," and facial detection. Such features could be used for surveillance, in automobiles, gaming (e.g., gesture control, Wii), and toys (e.g., a toy could detect a smile and respond).

If you read Tessera's s 10K, you will see numerous cases involving patent litigation. It seems as if a large chunk of Tessera's future revenue growth depends on its ability to navigate various Asian legal systems. Tessera's real value is in its 1900+ patents, but without a legal system in place to enforce those patents, one wonders how successful Tessera will be as more and more manufacturing is outsourced.

Disclosure: I own an insignificant number of Tessera (TSRA) shares and do not anticipate buying more shares. I am starting to fully understand why Warren Buffett avoids technology companies. Even if a tech company has great products, there are so many other factors involved in getting that technology to generate a consistent revenue stream.

Note: regarding Tessera's unique name: in 1992, Tessera was renamed from IST Associates--named for founders, Igor Khandros, Scott Ehrenberg and Tom DiStefano--to Tessera, the Latin word for "tile," for the closely stacked packaged chips that resemble a tile mosaic.

San Jose's Sam Liccardo: a Great Guy

I saw Sam Liccardo recently at an event in San Jose's Japantown. Sam is a Harvard Law graduate, former D.A., and current City Councilmember. San Jose is lucky to have him. When he is termed out of the City Council (in 2014?), many people expect he will run for San Jose's mayor position and win.

San Jose Water Company Annual Meeting (2010)

San Jose Water Company (SJW) had its 2010 annual meeting on April 28 in downtown San Jose. Pastries and coffee were offered to shareholders (see picture above). About 30 people attended, mostly company employees. Unfortunately, Norman Mineta, one of the Board members, did not attend because he was busy in China. Only one out of the eight directors attending the meeting was female.

Chairman Charles Toeniskoetter handled most of the meeting and congratulated an employee for 20 years of service. The CEO gave a brief presentation and said that the company was doing well but had "some political things to get through." (Last year, the company also complained about the political environment, but it hasn't been very specific about the political issues they are having.)

I skimmed the 10K and noticed that SJW owns a lot of land and real property. I also noticed that SJW has set up a subsidiary, SJW Land Company, "which has a 70% limited partnership interest in 444 West Santa Clara Street, L.P., a real estate limited partnership that owns and operates an office building." (page 15, 10K)

Guess who owns the other 30% of 444 West Santa Clara Street, L.P.? "A real estate development firm, which is partially owned by the Chairman of the Board of SJW Corp." (page 34, 10K) The tenants are "an international real estate firm under a 12-year lease." (Id.)

Visions of Enron-style subsidiaries flashed through my mind, so I had to ask about the limited partnership. I mentioned the Chairman's interest in the subsidiary and questioned why a water company was in the landlord/land business. The Chairman said that SJW Land Company took "land no longer needed for the utility and put it into the Land Company." He said that SJW has been in "the real estate business" for a long time, and it has been successful in that business.

The Chairman never mentioned any potential conflict of interest in owning property with SJW. It would have been nice if the Chairman told shareholders that he recuses himself from decisions involving SJW Land Company, but I didn't want to press the issue. I asked about the pension plan. The CFO said it was "90% funded" per IRS rules. The meeting concluded thereafter.

I hope to see Mr. Mineta at next year's meeting. I wanted to ask him about a story involving a baseball bat signed by Hank Aaron and Sadaharu Oh, the home-run king of Japan. See here ("The Camps at Home," 3/8/1999) for more on this story.

Disclosure: at this time, I own an insignificant number of shares of San Jose Water Company (SJW).

Anthony Bourdain's Favorite Food: Pho

Click HERE to read a review of a 2009 Bourdain speech.

Robert Half International Annual Meeting (2010)

Robert Half International (RHI) held its annual meeting in Millbrae, California at the Westin Hotel. Approximately 40 people attended the meeting. Unfortunately, I attended the meeting late and missed the video presentation and most of CEO Harold Messmer's short speech. However, a very perceptive and kind employee saw me come in late and allowed me to watch the video privately. The video, shown to shareholders and employees, discussed Robert Half's various businesses. RHI assists companies by providing flexible staffing. It is increasing its focus on small to mid-size businesses and believes the healthcare industry will represent increased flexible staffing demands. I was surprised by the diversity of RHI's businesses--RHI owns Accountemps, Finance and Accounting, Officeteam, Protiviti, and other staffing segments.

One segment of the video talked about "PEARL" (Pillsbury’s E-Discovery Alliance of Resource Leaders), an e-discovery service. For more information, click here. Law firms may be interested in such a program, assuming it is cheaper than hiring a temp legal agency (a service Robert Half Legal also offers).

The video also mentioned RHI's cash position of $349 million, with very little debt.

Everyone at the meeting was open and friendly. The hotel offered fruits, cereal, different juices, coffee, pastries, yogurt, and even a security guard outside the meeting hall. The CEO agreed to take a picture with me, and he didn't spend any time checking to see if it was a good picture (even after I told him it would be on my blog). Many executives are self-conscious, but CEO Messmer comes across as both suave and down-to-earth.

Now, I have to take time off work and sometimes drive moderate distances to come to annual meetings, so I get disappointed if there is no presentation or if the meeting is poorly run. When a company has a well-run meeting, like RHI, it makes me more confident as a shareholder and more likely to hold my shares.

Also, companies that offer shareholders goodies at the annual meeting get extra points in my book, because they are savvy enough to get free advertising. (It doesn't hurt to butter up shareholders, either.) The first picture above shows you all the different items I picked up at the meeting. RHI offered shareholders golf balls, different mugs, a stress ball, a hat, and a notebook. All of the items were branded, which gave the company a chance to show off its various businesses. Kudos to RHI for running a professional meeting and for treating shareholders to a fun morning.

Disclosure: I own an insignificant number of RHI shares.

Faisal Shahzad and Terrorism

From this Guardian story: would-be Times Square terrorist Faisal Shahzad "came from a wealthy family. He earned an MBA. He had a well-educated wife and two kids and owned a house in a middle-class Connecticut suburb." 

Shahzad fits the profile of a terrorist, and it has nothing to do with race, ethnicity, or religion. If you haven't read my thesis on how to find the most likely terrorists, you can read it HERE.

Comments from Santa Clara County Judges on Law and Motion

From last night's Santa Clara County Bar Association seminar:

On motions: "Brevity is beautiful."

On ex parte motions: "Your procrastination is not our emergency."

On disputes between lawyers: The basic concept is, "Don't involve the court." [i.e., do your best to work things out]

On how to begin your motion: the first paragraph should tell the court why you are here and what you want the court to do.

Another Hitchcock Film Recommendation

From the great Hitchcock film, Dial M for Murder: "[P]eople don't commit murder on credit."

If you haven't seen it, I recommend you watch it. Woody Allen's 2005 film, Match Point, seems to have drawn some inspiration from this Hitchcock film. I usually like Woody Allen, but for some reason, I didn't like Match Point. Most of my friends, however, did, so don't let me stop you from seeing it.

Inspiring Speech

American Scholar, Spring 2010
Article: Solitude and Leadership
Author: William Deresiewicz

http://www.theamericanscholar.org/solitude-and-leadership/

Why is it so often that the best people are stuck in the middle and the people who are running things—the leaders—are the mediocrities? Because excellence isn’t usually what gets you up the greasy pole. What gets you up is a talent for maneuvering. Kissing up to the people above you, kicking down to the people below you. Pleasing your teachers, pleasing your superiors...

Henry David Thoreau looks alive and well in the body of William Deresiewicz.

Friday Night

Just saw Darrell Hammond at San Jose's Improv. He was good, but not great. Most of his stuff is recycled, but it's mainly impersonations, so his routine never gets old. Hammond's Arnold Schwarzenegger impression is probably one of his best, and I also enjoyed his Bill Clinton and Jesse Jackson impersonations. Hammond thanked Bill Clinton for his house during the routine, and he doesn't seem to think too highly of the South (where he's from), Panda Express, or Hillary Clinton.

Jim Breuer, also an SNL alumnus, is still the best stand-up comic I've ever seen live.

Government Workers and Pensions

In today's WSJ (April 29, 2010), Gary Shilling delivers the lowdown on government pensions:

http://online.wsj.com/article/SB10001424052748704131404575117943161614762.html

Years ago, there was an informal "social contract"—public employees generally received lower wages than private-sector workers, and in return they got earlier retirement and generous pensions, allowing them to catch up. That arrangement has long since gone by the boards. The result is a remarkable trend. State and local government employees for years have received pay increases in excess of inflation, and BLS figures show they now have wages that are 34% higher on average than in the private sector.

To me, it's even more simple. It is foolish to spend lots of money on unproductive people, because each dollar that goes to someone who isn't working is a dollar taken away from someone who wants to work or is currently working. Typically, working and non-retired people contribute more to the economy because they spend more money on purchases such as homes, cars, appliances, and miscellaneous items, including items for their children.

Also, if retired people--whether Joe the Plumber or Joe the Police Officer--continue to make large purchases, they would actually hurt younger, newer couples by raising demand and prices. For example, if a retired person has a large pension and decides to buy a second home, s/he takes the home off the market for a first-time homebuyer who now has to look elsewhere for a home or try to compete with someone who has a stable pension and who has had decades to built up assets.

In a world where products and money are not infinite, each dollar makes a difference, whether positive or negative.

Pension Promises Bankrupting California?

Interesting article (April 12, 2010, Sac Bee, Phillip Reese) on public pensions and their effect on California cities and counties:

http://www.sacbee.com/2010/04/11/2670020/pension-promises-threaten-california.html

"The old joke is that General Motors is just a health insurance company that makes cars on the side," San Luis Obispo County Supervisor Adam Hill said during a pension presentation at a recent board meeting. "My concern is that the county government is becoming a pension provider that provides government services on the side."

The legacy of Gray Davis: blackouts and unsustainable pension promises?

Economy is Linked in Strange Ways

Until this year, I had been a loyal Wall Street Journal subscriber. I usually paid less than $200 for an annual subscription, but last year, the WSJ decided to increase the price to over $300/yr. I balked. For a while, I received only the local paper. The WSJ would call me once a month--usually very early in the morning--to try to get me to renew, but the sales rep wouldn't budge on the price.

After a few months, I grew tired of the local paper and signed with the New York Times, but just its Sunday edition. Some time thereafter, the WSJ sent me a renewal request with a price I was willing to pay. Apparently, if you wait 180 days between WSJ subscriptions, the WSJ finally offers you its "old" or "original" price, which--last time I checked--is less than $200. By this time, however, I thoroughly enjoyed the New York Times, especially its "Modern Love" Sunday pieces, and was unwilling to go back to the WSJ.

Why should anyone care about my newspaper habits? Because even small consumer habits, in the aggregate, create ripple effects. When I was receiving the weekday WSJ, I would go to Panera Bread (PNRA) for coffee and a cobblestone pastry every weekday. But once I stopped receiving the weekday paper, I skipped my Panera Bread morning outing. That eliminates over a thousand dollars from Panera's annual revenue, and they did nothing to lose my business--the Dow Jones & Company (NWSA), owner of the WSJ, caused me to change my morning habits with its strange marketing strategies. Now, with a much longer and more informative Sunday paper, I spend more time on the weekend at my local coffeeshop, which is usually Peet's Coffee (PEET). Dow Jones & Company basically transferred some of my money from Panera Bread to Peet's Coffee and Tea. Yet, no one at the WSJ intended Panera to lose my business and Peet's Coffee to gain it.

What is the point of this story? Basically, the economy is extremely difficult to manage because of the potential for unintended results. When the government tries to fix the economy, it, too, creates unintended consequences. Right now, we don't know the exact nature of those consequences, but at some point, we will be able to study how the stimulus package created unintended winners and losers. I agree that Congress should limit leverage on Wall Street. At the same time, Americans are losing sight of the big picture when it comes to federal spending. For example, the portion of the federal budget dedicated to defense spending continues to increase. It is now 23% of the entire federal budget. TARP, which many Americans bitterly protested, was only 4% of the 2009 federal budget. The ever-increasing defense budget has more than just financial consequences. Over 4,200 American soldiers have died in Iraq. Over 30,000 American soldiers have been injured in Iraq. Yet, many Americans, encouraged by mass media, pay more attention to "tea parties," golfer Tiger Woods' personal life, sports, and reality television. And so it goes.

Excessive Government Pay?

The best part is the S.F. deputy police chief saying he's helped reduce the deficit because of the taxes he paid on his half million dollars salary. (Rachel Gordon, April 26, 2010, SF Chronicle)

http://www.sfgate.com/cgi-bin/article/article?f=/c/a/2010/04/25/MNC51CLUBN.DTL

Oh, the arrogance and self-dealing.

Usain Bolt

[Update: link no longer works. Sigh.] 

Usain Bolt will never cease to amaze me: http://highschool.rivals.com/content.asp?CID=1078141 4x100 relay. Guess which runner he is.

Fun Tips

Here is a list of good commencement speeches and funny films:

Commencement Speeches

1. Will Ferrell's 2003 Harvard commencement speech. See if you can spot Al Franken in the audience.

2. Steve Jobs' 2005 commencement speech at Stanford University.

3. Ellen DeGeneres' 2009 commencement speech at Tulane University.

I was too lazy to add all the links, but you can find the speeches on YouTube.

Funny Films and Shows

1. The I.T. Crowd, Seasons 1 and 2

2. Adam's Apples, a Danish film

3. Wedding Crashers

4. My Cousin Vinny

Cary Grant and Grace Kelly

Just saw To Catch a Thief. Not one of Hitchcock's usual suspense films--it was very funny and had wonderfully comedic banter:

Francie: Money handles most people.

John: Do you honestly believe that?

Francie: I've proved it.

John: You're a singular girl.

Francie: Is that good or bad?

John: Oh, it's good, it's quite good. You know what you want. You go out after it and nothing stops you from getting it.

Francie: You make it sound corny.

John: Oh no, you're a jackpot of admirable character traits.

Francie: I already knew that.

John: Yes, I will say you do things with dispatch. No wasted preliminaries. Not only did I enjoy that kiss last night, I was awed by the efficiency behind it.

Francie: Well, I'm a great believer of getting down to essentials.

It's much better in the spoken word than on paper.

The Average Lawyer's Creed?

Isaiah 59:4 "No one calls for justice; no one pleads his case with integrity. They rely on empty arguments and speak lies; they conceive trouble and give birth to evil."

Update: a friend says that the above quote should apply to politicians, not lawyers.

Gender Gap

From NYT, April 18, 2010, Sunday Business, page 8:

Women account for just 6 percent of the chief executives of the top 100 tech companies, and 22 percent of the software engineers at tech companies over all, according to the National Center for Women and Information Technology. And among venture capitalists, the population of financiers who control the purse strings for a majority of tech start-ups, just 14 percent are women.

Interesting.

Malanga on California's Government Unions

Steven Malanga on California's government unions, including the teachers' union:

http://city-journal.org/2010/20_2_california-unions.html (City Journal, Spring 2010, "The Beholden State")

You wouldn't think that a public school teacher could possibly be an enemy of private enterprise and fiscal responsibility, but the rank-and-file don't usually dictate policy to their union bosses. Also, political discourse has become so hostile, no large entity seems to be fighting over the middle ground, where common sense resides.

Shameless Self-Promotion

Recently, I was featured in some publications. I wanted to put the links in one place, and this blog seemed like a good place. So, without further ado, if you are interested in SCU lawyers and what it's like to coach youth basketball, you might like the following links:

http://law.scu.edu/sclaw/spring-2010-private-practice.cfm

http://www.scribd.com/doc/27008818/Daily-Journal

http://ucdavismagazine.ucdavis.edu/issues/sp10/letters.html#letter_9

http://proxyexchange.org/barrister_program [current as of 1/2011]

Describing himself as philosophically Jeffersonian, Matthew [Rafat] is passionate about economics. It is not the theories or the personalities that draw him. It is the issues: "What concerns me now is that so many people in the U.S. seem to have lost their capacity for long term planning, delayed gratification, and sacrifice for future generations. At the end of the day, capitalistic systems rely on a fragile balance of supply and demand; thus, they only work if most people are honest, reasonable, and prudent, and they work best when economic transactions are transparent."

Ferrari Sighting in Downtown SJ

San Jose's Tea Party

San Jose had a Tea Party rally yesterday. There were many interesting signs from adherents and opponents. One teenager carried a sign stating, "Future Tax Slave." Someone else carried a sign proclaiming that "a village in Kenya is missing an idiot." Another interesting one-liner: "Save trees--stop printing money."

Meanwhile, Tea Party opponents mocked all the sign-carrying with (what else?) their own signs: "THIS IS A SIGN"; "THREE LETTER SIGN"; and "Don't Spread on Me," with a picture of a sliced bagel.

I did not see anyone carrying any guns. Everyone I noticed was polite, and many people were arguing respectfully with each other.

Civilian Courts Successfully Handle Terrorists

Next time someone tries to tell you that giving terrorists due process of law isn't feasible, remind him or her that "U.S. courts have, in fact, handled hundreds of terrorism-related cases since 9/11. Of the 828 defendants indicted in the United States on terrorism-related charges, 593 have been processed through the civilian court system, according to NYU Law's Highlights From the Terrorist Trial Report Card... Of the 593 defendants, 523 have been imprisoned...an 88.2 percent conviction rate." (Bob Kemper, Washington Lawyer, March 2010)

Brocade Shareholder Meeting (2010)

I attended Brocade's shareholder meeting on April 12, 2010. The company offered shareholders coffee, tea, water, and some of the best chocolate chip cookies I've ever tasted. 

At the front of the room were Tyler Wall, Dave House, Mike Klayko, and Richard Deranleau. This year, more Board members appeared in person, so the meeting seemed more fully attended. CEO Klayko delivered an oral presentation accompanied by a slideshow. Below are the main points from his presentation: 

• Network traffic continues to increase. 

• The amount of digital data is already massive--if printed in hard copy, it would form a line from Earth to Pluto and back twenty times. 

• There are over 8,000 laws on data regulation, which is an excellent situation for storage and storage area networking companies. For example, by law, financial companies need to maintain several copies of all emails sent. 

• People are afraid of the word, "delete," and will err on the side of keeping everything. 

• By 2015, consumers are expected to own 15+ billion networking devices. 

• Qzone is the Facebook of China and reaches more users than Facebook. [More consumers will be storing, publishing, and accessing information online not just in the United States, but worldwide.] 

• Cloud computing appears to be a sustainable trend. Salesforce.com (CRM) is a good fit for Brocade, and CRM also uses Brocade technology. 

• 60 to 70% of business costs typically revolve around employees, which is why corporations laid off so many employees last year; however, the workload continues to grow, and at some point, companies must re-hire employees to keep up with demand. 

• Brocade offers "unmatched simplicity, investment protection, non-stop networking, and optimization." 

After the presentation, it occurred to me that Brocade had delivered an excellent presentation about the overall marketplace but not about its own company. For example, there was no information showing how Brocade would be able to effectively compete with larger players such as Cisco (CSCO). The presentation didn't have information about Brocade's market share; specifics about Brocade's competitive advantages; new products; new streams of revenue; cost reductions, or anything else that would impact earnings per share. 

I remarked that I thought the presentation was great, and I felt like running out and buying shares in the major players in the data business--such as IBM, HP, and Cisco. In short, I didn't see why I should buy Brocade over Cisco or other technology companies that handle data. I also compared Brocade to the independent coffeeshop on the corner with Starbucks/Cisco opening franchises left and right. How did Brocade plan on competing with Cisco? 

CEO Klayko said that such comments had been made to him for the past ten years. He said that Cisco has been a "ten year conversation," and "we're still here." He then generally mentioned Brocade's "expanding product portfolio," and then briefly differentiated Brocade from Cisco by saying that Cisco believes in "vertical integration" while Brocade believes in "horizontal integration." 

Another shareholder asked about Foundry Networks, a previous Brocade acquisition. He said that Brocade had a good product line, but sales and marketing needed improvements. He appeared to have information about sales in Europe, and he indicated that Cisco was hammering Brocade overseas. "Nobody knows about you," he remarked. CEO Klayko responded by saying that he agreed that Brocade needed better branding, and part of the failure was because Brocade was a Business-to-Business (BtoB) company, not a consumer company. He agreed that Brocade needed to build on sales, but also said that half of Brocade's business already comes from outside the United States. 

And just like that, the meeting was over. I introduced myself to the shareholder who mentioned European sales, and he told me that Brocade dominated the storage area networking space. Brocade apparently has 75% market share compared to Cisco's 17%. Somehow, this gentleman realized how to sell Brocade more adeptly than the company's CEO. 

Brocade seems to have positioned itself as the alternative to Cisco, which is a horrible sales pitch. Pepsi doesn't walk around saying, "Try us when you're tired of Coke." And if someone ever told Pepsi's CEO that she should market Pepsi as a cheaper, more simple version of Coke, she would probably open a Montgomery Burns style trapdoor while hissing, "Release the hounds." 

Incredibly, Brocade's marketing strategy seems to be based on the idea that Cisco ought to have a competitor, so why shouldn't it be Brocade? Brocade's management and Board of Directors really ought to talk to RedHat and other Linux-based operating systems purveyors. Ask them how that type of sales pitch worked against the Cisco of software, Microsoft (MSFT). 

How could a company be so clueless when it comes to basic marketing strategy, especially in an increasingly global environment? Well, I lost interest in Brocade stock after last year's annual meeting. (You can read my long-winded rationale HERE if you're interested.) I sold my shares, thinking that a potential buyout wasn't enough justification for holding onto Brocade shares. Now, it's quite possible that someone will eventually buy Brocade. About two years ago, Brocade removed its "poison pill" provision, basically alerting the world that it was open to a takeover. (Also, maybe Carl Icahn will show up. He did make some money on Yahoo, didn't he?) 

Also, I like CEO Klayko--he's down-to-earth, diligent, not arrogant, and clearly a good guy. Yet, despite all of its good points, Brocade must realize that Wall Street will never give it any respect until it tries to position itself as a leader in the industry. No one wants to buy products from a company that positions itself as Cisco-lite and talks about its major competitor in respectful, almost hushed, tones. (Contrast Brocade's comments about Cisco with Salesforce.com's CEO's comments about its competitor, Oracle. Slight difference, no?) 

If Brocade wants its stock price to increase, it needs to grow some cojones and improve diversity in the upper ranks. Right now, Brocade runs like a company that doesn't mind being in second place. Absent some major changes, Brocade will continue to be the nerd at the high school while Cisco struts around as the cool kid. Thus, Brocade can talk all it wants about how much better its products are from a techie standpoint, but at the end of the day, it's Cisco--with its massive cash, effective marketing, more aggressive management, and better management diversity--that will get the beautiful fans. If I had to give Brocade's CEO a pep talk, here's what I would tell him: 

I don't want you to be the guy in the PG-13 movie everyone's really hoping makes it happen. I want you to be like the guy in the rated R movie, you know, the guy you're not sure whether or not you like yet. You're not sure where he's coming from, okay? You're a bad man. You're a bad man, Mikey. You're a bad man. You're a bad man. 

Mr. Klayko: I'm really hoping you can make Brocade into the bad man on the block. You're so money, but you don't even know it. 

Disclosure: I bought more BRCD shares after the meeting, but only because I expect IBM to buy out Brocade at some point.

Congrats to My Friends and their Newborn Son

Finally, a Good Lawyer Joke

From the awesome show, Community, comparing being a doctor to being a lawyer:

Well, anybody could be a lawyer. You can even represent yourself. You can't do surgery on yourself. It's illegal. You'd get arrested. And then you'd get a free lawyer.

A great show, but Hulu only has two episodes posted. Bonus: Chevy Chase is fantastic on the show.

Wealth Distribution

From UC Santa Cruz Professor G. William Domhoff:

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

Wealth Concentration: As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers)

Estate Tax: Figures on inheritance tell much the same story. According to a study published by the Federal Reserve Bank of Cleveland, only 1.6% of Americans receive $100,000 or more in inheritance. Another 1.1% receive $50,000 to $100,000. On the other hand, 91.9% receive nothing (Kotlikoff & Gokhale, 2000). Thus, the attempt by ultra-conservatives to eliminate inheritance taxes -- which they always call "death taxes" for P.R. reasons -- would take a bite out of government revenues for the benefit of less than 1% of the population.

You should read the entire article (click on link above). The charts are especially fascinating.

Update: per the Federal Reserve Bulletin (September 2014, Vol 100, No 4) aka the 2013 Tri-Annual Survey of Consumer Finances from 2010 to 2013, about 1 in 5 American families earns over 100,000 USD each year.

As of 2013, if you are between 18 to 35 years old and your net worth is more than 10,400 USD, you are better off than half of all American families in your age group.  

Free Book on Investing

I don't know how long the offer will last, but you can click on THIS LINK for a free book by Burton Malkiel: The Elements of Investing.

Back in the day, Mr. Malkiel's book, A Random Walk Down Wall Street, heavily influenced my financial education (even though I disagreed with his central thesis on EFM). Apparently, this new book is for beginners, but if Mr. Malkiel is involved, it should be fun to read for everyone.

Stranger than Fiction

[Published March 11, 2014]

"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, from another era. 

I can talk generally about an academia-governmental complex forming, not just with student loans (which the government profits from), but the idea that schools no longer teach practical skills and therefore rely on their ability to make connections, many of whom are governmental, therefore rendering schools less likely to criticize government overreach.  

I can talk generally about the public’s mistaken assumption that all judges are worthy of being trusted merely because a politician gave them a title. (Riddle me this: people hate politicians and lawyers, but respect judges, who are just former lawyers. Speaking of which, forgive me this soapbox moment: stop electing D.A.s to the bench and look instead at public defenders and private civil law practitioners, especially at smaller law firms. You’re far more likely to see a judge on a civil case than a criminal case if you’re a law-abiding resident, and you want your judge to have experience with different areas of civil law. Finally, when you elect a D.A., you’re often electing someone who is beholden to the police union. Yet, the point of having a separate judicial branch is to create independent oversight, especially over the police.) 

I can talk about the lack of diversity on the local bench—18 out of 89 judges are people of color, in a county where about 37% of the population (including myself) are immigrants. 

But I'll talk about the American public's failure to understand two crucial elements of America's success: first is immigration. On 9/11, some people think of burning buildings, Bradley/Chelsea Manning, Iraq, or Bush, but me, I think of a poem:  "I've promised myself, even if I'm the last snowman, that I'll ride into spring on their melting shoulders." As I wrote, “[The poem] represents the immigrant experience and persevering through difficulty to ensure that previous generations…did not toil in vain.”  In other words, we’re all immigrants here in America, though some of us are thrice-removed, trying to find springtime.  Corny, yes.  I stand by it.  As far as I’m concerned, America is successful because of our openness to immigration.  That iPhone?  Steve Jobs’s biological father was from the Middle East.  eBay?  Persian guy from France. And so on. 

Second is the principle that public and private spheres are different and must remain so. The failure to understand this concept has caused many government employees to misunderstand their role--namely, to serve the public and, in higher positions of discretion, to have integrity. We seem a long way from the 1970s bumper stickers of "Question Authority." We are going in the wrong direction.

I’ll close with one of my favorite legal quotes from then-law-student (later Supreme Court Justice) Louis Brandeis:

That the individual shall have full protection in person and in property is a principle as old as the common law; but it has been found necessary from time to time to define anew the exact nature and extent of such protection. Political, social, and economic changes entail the recognition of new rights, and the common law, in its eternal youth, grows to meet the new demands of society. Thus, in 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 [by the government]; the right to liberty secures the exercise of extensive civil privileges; and the term "property" has grown to comprise every form of possession -- intangible, as well as tangible.

           -- “The Right to Privacy,” Harvard Law Review, Warren and Louis Brandeis, 1890.

Update: though Brandeis was speaking of government in relation to people, nothing in his comments disallows stringent regulation against groups, nonprofits, and corporations. 

Law: Juries, Verdict Forms, and Keyser Soze

Rule #1 as a plaintiff. Strike all the engineers from the jury pool.

Jurors should remember: you don't have all the information in a trial, and you don't know how the legal process works. Just because a lawyer doesn't spend time trashing the other side, it doesn't mean the other side is angelic. Sometimes, we cannot introduce evidence about how bad the other side is, even if he's bashing our side. Sometimes, judges rule that one side can say certain things, and we can't respond in kind. That means if we mention certain things, the judge can declare a mistrial, and we have to do the whole trial over again.

Don't make any assumptions. Just look at the evidence. Don't assume that you're smarter than everyone else, and you're able to see something that isn't actually in front of you in the form of testimony or a document.

Also, if you do rule against a plaintiff, it usually means s/he has to pay the other side's costs. Sometimes, if you're not sure about who's right, the best thing to do is to rule for the plaintiff and give him or her one dollar.

For lawyers: don't assume that a plaintiff will always benefit from a general verdict form instead of a special verdict form. (A special verdict form forces the jury to think hard about each element of the case, while a general verdict form basically asks, "Is he liable for fraud? yes/no.") By giving the jury a simplified general verdict form instead of a special verdict form, jurors were able to avoid thinking hard about the case.

Also, a simplified form allows the foreperson to advance her/his own ideas about the law, even if s/he is completely wrong. Here, we thought the case was already complicated enough, so all of us agreed on a general verdict form to make things easier on the jury. Unfortunately, the general verdict form allowed the jury to bypass thinking analytically about the case and to decide based on their general feelings and the foreperson's own ideas about the law. For example, after the trial, one juror (the foreperson) said, "The other side's conduct wasn't flagrant enough." I was thinking, "Dude, that's not the law. There's no law that says, 'Only flagrant conduct is illegal,' or "The conduct must be flagrant to be illegal.'"

More advice for lawyers: don't always take the high road. If the other side is bashing your client and name-calling, try to find some way of countering without causing a mistrial. Jurors will choose sides based on whom they think is the good guy or the bad guy, regardless of the law. For example, if the other side hasn't bifurcated punitive damages, bring up the value of his home or another large asset if he keeps saying he's judgment-proof. Or bring up his unpaid debts. Or his or her massive wealth. You need something to make the jurors think they're dealing with someone who can handle a judgment or who deserves a judgment.

On the other hand, consider dropping punitive damages if you don't have a slam dunk situation. You won't be able to bring in any evidence of the defendant's net worth or financial information, but the punitive damages portion will probably get bifurcated anyway (thereby preventing you from talking about the other side's financial situation, bad debts, massive wealth, etc.). The upside is that you won't have to prove malice or oppression. If you try to show malice or oppression, jurors may get confused about the burden of proof on the original claim. For example, they may think that negligence requires malice (it doesn't). Lawyers may want to tell a jury in closing argument whether a specific claim requires specific intent.

I am going to need some time to get over this one. I will not be posting for a while.

P.S. Note to judges: if you allow the other side to bring up stuff about atomic bombs or to equate a foreign government's actions with an individual, no matter what the result, one party will think the process was tainted. Telling someone the remedy for any resulting prejudice is a mistrial--where a party and his lawyer have to come back and do everything all over again--is fair but somewhat impractical when one side is pro se and essentially unemployed, and the other side is paying for a lawyer and expert witnesses. I don't want to focus too much on the national origin issue now, but I might write about it later. At the end of the day, I feel the jury treated my client, an educated U.S. citizen of Middle Eastern descent, as not fully American. Why would they do that? Why would they side with the lawyer who had misrepresented facts all week? Could all the talk about atomic bombs and religion have something to do with it? Was it something else? Was it a combination of different factors, some permissible and some impermissible?

(And yes, I did ask the court to exclude testimony and comments about foreign governments and international affairs. The court wasn't sympathetic to my argument that mentioning the Iranian government and current events would result in prejudice. I argued that allowing such comments and testimony would be unduly prejudicial when the media is currently hyping an Iranian nuclear threat and when the primary images of Iranians in the mainstream media are of the much-hated Iranian president. The court wasn't swayed by my argument. The court did exclude evidence of my client's international travels, but the defendant still mentioned it during the trial. The judge stopped the trial, called us over for a sidebar, and warned the defendant that he was in contempt and should not mention excluded evidence again. The defendant went back to calling my client a "professional plaintiff," which was somewhat hilarious to hear from a plaintiff's lawyer. Also, I don't know if this should make me feel better or worse, but I believe the judge was sincerely fair. I still believe we were very lucky to get an excellent judge.)

Update: I forgot to add one more interesting tidbit. After the trial, a judge can ask the jurors how they voted if requested by a party. This is calling "polling" the jurors. According to the one juror who voted in our favor, someone switched her vote during polling. So one juror decided one thing in the jury room and another thing in public. Why would someone switch her vote?

Keep in mind, other than the defendant's/lawyer's own testimony, no other evidence was offered to prove my client had a bad motive for bringing his current lawsuit. The defendant even said at one point, "You're slicing baloney," when I asked him about the alleged conversations between himself and my client. Two other lawyers who were in the room and heard defendant's allegations found them to be totally baseless and indicated the defendant was not believable. Under cross-examination, the defendant testified that he and my client had a 2 to 3 hours conversation about my client's ex-wife, my client's search for an Iranian wife, and Middle Eastern politics. Later, the defendant suddenly added that my client had discussed the Holocaust during this conversation. I asked about the percentage of the conversation dedicated to personal issues, Middle Eastern politics, and the Holocaust. He answered, "50/50." I asked him how three different topics could be "50/50," which spurred his "slicing baloney" comment. During this part of his testimony, the defendant mentioned Iran's conference against the Holocaust and said the Holocaust is called the "Hollow Holocaust" in Iran. No one in the jury appeared fazed at all, perhaps because by that point, they were tired and had been desensitized by the earlier comments about nuclear bombs and government actions. My client is a clean-shaven U.S. citizen who has been living in America since 1978.

Furthermore, the defendant once accused a sitting judge of being anti-Semitic, a claim that was rejected. Defendant's allegation of judicial anti-Semitism occurred in a separate case, and I didn't want to risk a mistrial/contempt by mentioning it after the judge ruled that we could not discuss unrelated cases.

The one juror who voted in our favor on the legal malpractice claim? A retired ex-Air-Force sergeant. Post-trial, when the jurors learned more information about the defendant, they appeared shocked. The retired ex-Air-Force sergeant even angrily exclaimed, "I told you so," to one of the other jurors.

Union Influence

Scott Herhold, on San Jose's public safety unions and the financial strain they cause:

[What kind of city is San Jose?] Is it the one that gave police a series of nice little pay boosts after 9/11, bumps that take the average wage to more than $114,000 after five years on the job?

Is it the one that, thanks to an arbitration system it agreed to in the 1980s, is paying cops and firefighters 90 percent of their salary as a pension after 30 years?

In the past nine years, driven by public safety, the city's employee costs — wages and benefits — have increased by 64 percent. That's roughly 7 percent a year. I know I haven't done as well.

Wow. Interesting article.

Who's Running the Show?

From SJ Merc, Internal Affairs column, March 14, 2010:

A new report from the Fair Political Practices Commission — California's elections watchdog — mines years of campaign and lobbyist reports and turns up this nugget:

Over the past decade, 15 special-interest groups have spent more than $1 billion in an all-out bid to influence the state's affairs. They spent that money to sink ballot initiatives and boost candidates. They fed it directly to political parties' war chests. (Democrats came out slightly ahead of Republicans.) And they spent hundreds of millions wining and dining lawmakers and other state officials.

Almost a fifth of the cash came from one group: the politically powerful California Teachers Association ($211.8 million). The teachers union was followed by an affiliate of the Service Employees Union International ($107.5 million), a pharmaceutical industry group ($104.9 million) and two deep-pocketed Indian tribes ($83.6 million and $69.3 million). Rounding out the top 15 are some other big names, such as Pacific Gas & Electric, Chevron, AT&T and Philip Morris. (For the full report, go to www.fppc.ca.gov/reports/Report38104.pdf.)

So when we talk about special interests influencing state governments, remember: it's the teachers and other unions who have provided the most grease to Sacramento. Is it any wonder Sacramento provides teachers and unions with special benefits unavailable to most private sector workers? I'll end with this gem from the article:

"The conclusion is inescapable," reads the report's executive summary. "A handful of special interests have a disproportionate amount of influence on California elections and public policy."

Youth Basketball Season Over

Today is the last day of the youth basketball season. I hope my team wins, but they're up against a good team. After today, I'm not sure what I'm going to do with my 2010 Saturdays.

Update: my team lost, but all of them had fun. As usual, I had one parent who expected me to be overly tough with his son, even though his son just didn't have the physical development necessary to do certain things. Boys tend to develop in quick spurts, whereas girls seem to have a more steady physical progression. On any given team, one boy could be miles ahead of the other boys in terms of athleticism, while another boy could have major difficulty learning to pivot or even to dribble. In any case, I'm not going to bother a kid on the last day of the season if he's doing something unconventional. He can always refresh his skills the next year, right? Sigh.

On the bright side, two parents left me nice messages thanking me for coaching.

Santa Clara County's Diversity

Just some fun links re: immigration:

http://www.nytimes.com/interactive/2009/03/10/us/20090310-immigration-explorer.html?hp

http://projects.nytimes.com/immigration/enrollment/california/santa-clara

George Washington Quote on Religion

From THIS LINK, General Washington's statement 'To the General Committee, representing the United Baptist Churches in Virginia':

If I could have entertained the slightest apprehension that the Constitution framed by the Convention where I had the honor to preside might possibly endanger the religious rights of any ecclesiastical society, certainly I would never have placed my signature to it; and if I could now conceive that the general government might ever be so administered as to render the liberty of conscience insecure, I beg you will be persuaded that no one would be more zealous than myself to establish effectual barriers against the horrors of spiritual tyranny and every species of religious persecution. For, you doubtless remember, I have often expressed my sentiments that any man, conducting himself as a good citizen and being accountable to God alone for his religious opinions, ought to be protected in worshiping the Deity according to the dictates of his own conscience. While I recollect with satisfaction, that the religious society of which you are members have been, throughout America, uniformly and almost unanimously the firm friends to civil liberty, and the persevering promoters of our glorious revolution, I cannot hesitate to believe that they will be the faithful supporters of a free yet efficient general government. Under this pleasing expectation, I rejoice to assure them that they may rely upon my best wishes and endeavors to advance their prosperity,'

I am, gentlemen, your most obedient servant, GEORGE WASHINGTON.'

"The horrors of spiritual tyranny"? I can't believe I haven't seen those words before. Beautiful language, isn't it?

Roger Ebert on the Gathering Storm

Roger Ebert inspired by Thomas Friedman leads to an interesting post:

http://blogs.suntimes.com/ebert/2010/02/the_gathering_storm.html

Here is the comment I tried to post on Ebert's blog:

I am agog at how many people have shared their stories and opinions. As for me, I don't have much to say except this: no system will work, including universal or for-profit healthcare, unless people are ethical.

Today, in almost every profession, incentives tend to push people, even good ones, into poor decisions. For example, if you're a doctor who gets reimbursed based on the number of tests you order, why not order an extra one? Does this attitude change under universal healthcare? Of course not. The only difference is who pays for it.

Conservatives understand human nature's tendency to game systems and are afraid that universal healthcare represents a massive opportunity for dishonest people to game the system and pass the buck (literally :-) Liberals, on the other hand, see the poor man in the street dying from a treatable chronic disease, or the cancer patient who can't get treatment, and are outraged. They want things to change. Neither side seems to understand that the incentives in healthcare need to change in order to promote ethics and a sustainable system.

When I see people argue in broad terms, I see no opportunity for real agreement. I am reminded of Yates: "Turning and turning in the widening gyre..."

Random Note about the NBA

Matt Barnes = the new, improved Raja Bell. If you're an NBA fan who watched the Orlando/Lakers game yesterday, you know what I'm talking about. By the way, Mr. Barnes is a Santa Clara, CA native. So Steve Nash and Matt Barnes...representing Santa Clara, California. I guess Gary Payton and Jason Kidd would represent Oakland, CA. I'm not sure who would represent San Francisco, CA.

Barry Ritholtz on Madoff

As usual, Barry Ritholtz gets it right:

http://www.ritholtz.com/blog/2010/03/what-were-the-actual-losses-in-madoffs-fraud/

Love the example about the trillion dollars. Doesn't it seem that "trillion" will be 2010's word of the year?

Fiscally Conservative Democrats -- Not Necessarily a Contradiction

During one of the worst recessions in modern history, the senior citizens' lobby wanted to take $250 from working people and put the money into their own pockets. The measure failed, because the following Democratic Senators exercised restraint:

Bayh (D-IN)
Bennet (D-CO)
Carper (D-DE)
Feingold (D-WI)
Feinstein (D-CA)
Landrieu (D-LA)
Levin (D-MI)
McCaskill (D-MO)
Nelson (D-NE)
Shaheen (D-NH)
Udall (D-CO)
Warner (D-VA)

Both of Colorado's Senators appear to have good financial sense.

Dianne Feinstein seems to have enough job security to vote against the lobby's demands. Sadly, Barbara Boxer voted for the bill and seems to be doing everything she can to lose to Republican Tom Campbell in the next California election.

Russ Feingold did the right thing (he seems to do that a lot).

To Bernie Sanders from Vermont, who sponsored the bill: you need to go back and re-take basic math. No cost-of-living adjustment means there was no significant reported inflation. If prices in general didn't go up, why do benefits for senior citizens have to go up? We already expanded prescription drug coverage under the Bush administration, and senior citizens are eligible for Medi-care. What, exactly, is the problem, as long as senior citizens don't spend excessively? If you have a beef with the reported inflation numbers, then you go and address that issue, but please don't run straight to the taxpayers every time you get a harebrained idea.

Teaching Kids (and Adults) about Natural Gas

Even though the following webpage is for kids, I think it's an excellent way to explain natural gas to anyone, including adults. More after the jump, courtesy of the federal government:

http://tonto.eia.doe.gov/kids/energy.cfm?page=natural_gas_home-basics

34K for Kindergarten Tuition?

The rich are not like you or me. $34,000 for kindergarten tuition? More after the jump:

http://www.bloomberg.com/apps/news?pid=20603037&sid=aMSOxnqW3VQs

Tuition at Dalton [Kindergarten]...is rising 3.5 percent to $35,300 for the 2010-11 school year. If you ask me, these kids would do just as well if they went to a private Montessori school.

RIP Theresa Pfeiffer, Esq.

A good woman and a good lawyer, Theresa Pfeiffer, recently died. I saw her in court and in seminars several times, and she was always so dignified--gentle yet strong. When we talked, she always left an impression with her beautiful blue eyes and soft voice. I couldn't read the obit, because I started to tear up.

RIP Theresa Pfeiffer.

Day of Action for California Public Schools? Seriously?

Apparently, there's going to be a Day of Action for California public schools tomorrow, March 4, 2010. Here's a response I wrote regarding this so-called "Day of Action" to someone who was protesting "public education cuts":

Correct me if I'm wrong, but California's Constitution still requires that public schools receive first crack at any state revenues, right?:

From all state revenues there shall first be set apart the moneys to be applied by the State for support of the public school system and public institutions of higher education.

So when you refer to "cuts," you mean that in the midst of a recession, tax revenue declined across the board, right? Not just for teachers, but for most government programs, right? (The less taxes/revenue a state receives, the less money it has to fund all government programs, including education.) That means in order to maintain education spending at the same levels as last year or the year before, some other government program has to be cut, right? So if you really think about it, anyone complaining about "cuts" to education is really asking people outside the public education sector to give public school teachers and public schools preferential treatment, even when the money to maintain other government programs and services doesn't exist.

Without spending cuts, including cuts to education, California has only two other options: raising prices (i.e., UC tuition increases); or forcing other people to pay more taxes (e.g., the higher sales tax, which disproportionately hurts the poor). Am I missing something here? I'm sure we all wish we could fund wonderful government programs, including education programs, but if the money isn't there, then what do we do? How much more can we expect individual taxpayers in California to pay so that teachers, schools, and teachers' unions benefit?

FYI: according to the California Budget Project, "In 2007, more than four-fifths (82.9 percent) of statewide spending for schools went to pay for the salaries and benefits of teachers and other staff."

Another example: let's assume like the state of California, I have no savings. If I make less money in 2009 than I did in 2008, and I want to maintain the same level of spending I had in 2008, what do I need to do? I have to borrow money, i.e., use my credit cards. A state, however, has no credit cards. If it wants money, it has to issue bonds, sell assets, or get loans to raise revenue. Unfortunately, California is in the hole $20 billion, and it can't sell $20 billion worth of assets. It needs to borrow money, which is another way of saying it needs to borrow against the future income of its residents, namely, the kids.

When educators say they want more money to help the kids or to invest in children, remember: they are actually saying they want to take money away from the next generation of kids to help themselves. When someone says, "Think of the children," you should say, "Darn right, we need to think of the children. That's why we need to cut spending, so we don't have to borrow money from our kids to fund government programs." I'm just sayin'.

Counterpoint: California Spends Less on its Students.

Bill Simmons is Right

THIS Bill Simmons article on the NBA's woes is spot on. David Stern and the NBA's owners need to sit up and pay attention.

Obama Not Helping the Unemployed?

Interesting link about the job market and excerpt below:

http://esr.ibiblio.org/?p=1752

We’ve spent the last seventy years increasing the hidden overhead and downside risks associated with hiring a worker — which meant the minimum revenue-per-employee threshold below which hiring doesn’t make sense has crept up and up and up, gradually. This effect was partly masked by credit and asset bubbles, but those have now popped. Increasingly it’s not just the classic hard-core unemployables (alcoholics, criminal deviants, crazies) that can’t pull enough weight to justify a paycheck; it’s the marginal ones, the mediocre, and the mildly dysfunctional.

If that doesn’t scare the crap out of you, you’re not paying attention. It’s a recipe for long-term structural unemployment at European levels of 10%, 15%, and up. What’s even crazier is that the Obama administration wants to respond to this problem by…raising taxes and piling more regulatory burden on employers.

Raise the cost of something fungible, and demand usually falls. Raise the cost of hiring someone, and unemployment usually rises.

Must-Read Article on Crime Rates

Fascinating article on the crime rate--THIS ARTICLE is a must read. (Ron Unz, American Conservative, March 2010, "His-Panic") Below is an excerpt:

Personal experiences are no substitute for detailed investigation, but they sometimes provide a useful reality check. Since the early 1990s, I’ve lived in Silicon Valley, a region in which people of white European ancestry are a relatively small minority, separately outnumbered by both Asians and Hispanics, with many of the latter quite poor and often here illegally. On any given day, more than half of the people I encounter in Palo Alto are Hispanics from immigrant backgrounds. Yet my area of the country has exceptionally low crime rates and virtually no serious ethnic conflict. This confounds the expectations of many of my East Coast friends.

You should click on the link above and read the whole thing.