Sunday, August 10, 2008

Questions to Ask to Get to Know Someone

When I was younger, I thought I could gain useful personal information by asking general questions. I realize now that my inquiries were not helpful in producing any profound insights. I've written some questions that do provide insight into a person's value system and beliefs.

1. Obesity is a major problem in America. Fast food chains, such as McDonald's and Jack in the Box, provide cheap food high in calories and fat. Anecdotal evidence indicates that poor persons and single parents disproportionately rely on fast food restaurants because of a lack of money and/or preparation time. Should we add a new tax on fast food chains to make them more expensive, thereby driving traffic to healthier venues?

2. Should we raise taxes on oil/gasoline, causing the retail price of gasoline to go up? Let's assume this tax increase would result in a better environment as fewer people drove cars or switched to smaller cars with better mileage. If your answer is different than your response to question number one, explain the reason you answered differently.

3. Should we tax oil companies' profits at a higher rate than other companies' profits? If so, why? Also, how should the government spend the money received from the new taxes?

4. A employee of a minority group gets a different supervisor of a racial majority group at work. His previous supervisor left voluntarily to another company. The employee's new supervisor is a racist; however, the employee's performance is declining, and if another month passes, he would get fired because of his own incompetence. His supervisor fires him one week later because he dislikes members of the employee's ethnic/racial group. The employee is making 8 dollars an hour. How much, if anything, would you recommend he receive if he sued the company, and you were a juror?

5. You are sitting alone in a restaurant minding your own business and eating a hamburger. You are sitting at a mid-sized table with four chairs. It is a busy day, but there are other open tables available. Someone sits down next to you at your table. What do you say or do, if anything?

6. Every year, the American government takes about 13% of each employee's salary and puts it into a general fund for everyone's retirement/pension (i.e., the Social Security program). Should you have the ability to invest your contributions the way you see fit? Or should the government manage and direct everyone's contributions?  Government officials contend that many people do not know how to invest or may invest recklessly, and they want to prevent a situation where people lose their money through bad investments, which defeats the purpose of having a nationwide retirement program (i.e., to prevent poverty in old age).

7. A vegan on the city council wants to pass a local law/ordinance requiring all local restaurants to use a certain kind of cheese, made without animal products (i.e., rennet). She complains it is unfair for restaurants, especially pizza places, to effectively exclude her from their establishments. You are also on the city council. How do you vote?

8. A vegan on the city council wants to pass a local law/ordinance requiring all local restaurants to affirmatively disclose whether their ingredients are vegan, i.e. made without animal products. This would require local restaurants to change their menus and spend money replacing existing menus. He wants a penalty of 500 dollars per violation and wants the city to have random inspections of restaurants to ensure they are in compliance. You are also on the city council. How do you vote?

9. Do you believe in a God that is omnipotent but does not interfere in our daily lives?

10. [Added August 20, 2008] Your law firm's copy machine breaks down, so you are able to serve the other side with a motion, but you miss the filing deadline by one day. The other side is not affected--they were served properly, but the statute says the court must deny the motion unless it is also filed on time, or unless good cause exists for filing it late.

The legal process has strict timelines to ensure efficiency and predictability. Most deadlines require a litigant to file documents with the court and serve the other side by a certain date and time. Failure to enforce deadlines consistently results in a situation where judges seem to favor one side over another or appear inconsistent.

In this case, the court/judge would not have looked at the documents until several days later. The court itself is unaffected, as well as the other side, who was served timely. You are the judge. The law requires you to strike the documents unless you find good cause exists for a late filing. You are wary of accepting an excuse of a copy machine breakdown, and worry it might lead to others filing their motions late. The statute clearly requires you to either find good cause, or deny the motion. What do you do, and what is your rationale?

Bonus: does it make a difference if the law firm that was late represented an average employee? What if the law firm represented a corporation making $50,000 net annually? 1 million net annually? Should the judge consider these external factors, even though the statute does not mention them?

11. [Added 9/18/08] Imagine you are the president of a country. Your country has lots of natural resources, but only in the last few years has it managed to begin spreading the wealth and have a world-class stock market. In addition to the money flowing into your country's companies from other countries, your own citizens have invested a lot of their money. Due to unforeseen events and bad news, your stock market goes down 5%, then 10%, then 20% on three consecutive days. People are complaining about losing their life savings and street protests are being organized. You have the power to temporarily shut down the stock market, thereby preventing any trades from occurring, which would prevent investors from withdrawing their money from stocks and new investors from coming in. You expect to open the stock market again in a few days, when you believe things will be calmer. Do you shut down the stock market after the three consecutive down days, or do let the market stay open, thereby risking another large drop? If so, how many days do you shut down the market?

12. [Add 7/28/09] Click here for questions relating to the Cambridge PD's arrest of Henry Louis Gates, Jr.

13. I am borrowing the following hypothetical from Slawek W.:

John invents a cure for cancer. It is a pill, very easily made, in fact, one could make it with ingredients found in every household. He successfully demonstrates the effectiveness of this cure on several volunteers, after which he announces to the world that he has no intention of ever releasing any information about this cure. He further announces that the instructions to produce this cure have been implanted somewhere in his body in a soluble capsule which will completely dissolve in a week along with the instructions.

Let's suppose that a surgical search for this implant would end John's life.

Let's further suppose that there is absolutely no way that you can reason with John to change his mind, and you cannot reverse engineer the cure by studying the cured patients.

Now, the general population is asked what the best course of action is in this situation. John has the knowledge to eradicate cancer forever but he has no intention of sharing this information for whatever reason. Also, there is no way to forcefully retrieve this information without causing John's death in the process.

What would you propose to do? Would it matter if John was your 16 years old son?

14. [Added on 8/27/11] A police department participates in various community outreach programs. The department initially asks officers to visit an event at a local mosque, but when no one volunteers, mandates an officer's and his four subordinates' attendance. (We may assume at some point during the event, the mosque may hold prayers, but the officers would not be compelled to participate.) The officer refuses on the grounds that 1) he believes the mosque has ties to violent fundamentalist organizations; and 2) as a devout Christian, it is against his religious beliefs to go to a non-Christian house of worship. The officer also says that to the extent that his subordinates sincerely believe that their religion forbids them from attending and participating in Islamic religious ceremonies or that the mosque is funded by anti-American elements, he may not compel them to attend, either. What should the police department do?

15. [Added on 8/27/11] A mentally and physically disabled teenager is given an honorary spot on the high school football team. He suits up and participates in practices as an assistant and spends most of his time helping players by bringing them water and equipment. In some cases, at the end of an official game, the coaches of both teams agree to sub him in for a play or two. During these plays, the team gives the teenager the ball, and he sometimes scores a touchdown. This situation goes unnoticed for four years, until the teenager becomes 19 years old. The state athletic commission sends a letter to the team informing them that no one may join or participate in a team's practices or games after turning 19 years old. The commission says it understands the unique situation but it must enforce its rules equally. You are elected as the head of the state high school athletic commission the next day. What would you do?

Saturday, August 9, 2008

Deficits Come Home to Roost

I was talking to a friend of mine today, and she, a life-long Democrat, was showing me that she paid 35% in taxes. She said she did not mind paying 35% to the government and favors maintaining existing welfare programs as well as entitlement programs. I suddenly realized how dire our spending habits are--just maintaining existing programs would cost future generations trillions of dollars more than we can afford and would bring our nation closer to defaulting on government issued debt (bonds, Treasuries) or requiring foreign capital injections (e.g., Citigroup, Merrill Lynch and MGM Grand).

I then realized something unsavory--the money would be coming from my friend and I to cover the existing entitlement/spending programs, and the only way the government could get it was by taking more money from us and our children. I told my friend her 35% rate was an inaccurate indicator of how much government spending programs cost. In reality, unless the government wants to default on our debt, her tax rate should be 50%, and sales taxes would have to increase every year to cover government spending. I tried to tell my friend her support for existing spending programs means that my children and her children would eventually be subject to an income tax rate of around 50% and a California sales tax rate of around 10% to maintain the programs she likes. That's when I realized if you're an American, and you care about this country's future, you must support cutting government spending. The only question should be where the cuts come from, not whether they should be made. Even supporting the maintenance of current spending programs is wrongheaded.

I gave my friend a link to Richard Fisher's recent speech, which I've posted elsewhere on this blog:

http://www.dallasfed.org/news/speeches/fisher/2008/fs080528.cfm

I asked her to read it, because if she, a very smart law school graduate, could not understand that even maintaining existing spending programs required higher sales taxes and her children to pay 50% in income taxes or risk Zimbabwe-type inflation, we had little hope as a country of exiting our financial morass.

I facetiously pretended to be Uncle Sam with a spending problem. I told her I had been using my credit card and spending trillions of dollars of her money and now I needed more, or I'd go bankrupt. I said I had taken loans from the Chinese, Japanese, and British, and I had to pay them interest every single month. The 35% I was taking from her wasn't enough. I couldn't take too much from the poor--it would not be enough, even if I raised their taxes to 50%. The top 25% already pay 85% of taxes (see http://willworkforjustice.blogspot.com/2008/07/top-25-of-earners-paid-85-of-all-taxes.html) to support my spending habits, and it isn't enough. My friend and her children had to pay more.

I racked up a list of expenses I had--the war in Iraq, Fannie Mae, Freddie Mac, welfare, military, payroll, Social Security, Medicare, and Medicaid. I told her I had overused my credit card for the past ten years and was spending money I didn't have, while paying only the minimum balance each month. To make matters worse, I had little actual savings--I was living paycheck to paycheck, surviving on my friend's 35% injections. Thus, any spending was going to have to come from more loans and more debt. I said I was now having a hard time meeting interest payments on my loans, and she had to pay me more money so I could take it outside of our country to pay my foreign creditors. I explained if there was any other way of getting the money, I'd avoid raising taxes. Please, I begged her, show me a way to get the money without taking it from you and your children but also maintaining my spending habits. (And no, massive inflation is not an option--as Zimbabwe shows, if everyone's rich, no one is.)

That's when it hit me. There's no other way for Uncle Sam to get the money without cutting spending, except by raising taxes. For example, California will probably raise sales taxes to balance its budget, which will hurt the poor. (The sales tax is a "regressive" tax, a fancy way of saying it falls disproportionately on the poor.) California's spending, if it results in a higher sales tax, will cause the poor to save less money, because now they have to pay higher taxes when buying food, drinks, clothing, and cars. Thus, to maintain government programs that help the poor, California is going to raise a tax that will hurt them, so the government can make the poor more reliant on their programs. Confused? You should be. Like you, I didn't study Infinite Loop Economics.

And that's the harshest lesson of all--in part because we have tried to help the poor by spending money we don't have, we've destroyed our ability to help them. The poor don't have a lot of political power, so most likely, we will have a higher sales tax before a higher income tax (which falls disproportionately on the aspiring middle class and affluent).

So here's the sad, twisted result: we've spent money we don't have, causing us to take more money from the poor so we can give it to the government. The best way to help the poor is to take some short-term suffering--like cutting government programs, foreign spending (e.g., Iraq war), and general benefits (e.g. government employee pensions), so we actually have money in the bank to help the poor in the future. We had a surplus only a few years ago. See chart, below.


For the Republicans gloating right now, our surplus occurred under Democratic President Bill Clinton, a fact that helps Sen. Obama, not Sen. McCain. For the Democrats gloating now, the surplus occurred under a Republican Congress. As we can see, the issue of out-of-control deficit spending is non-partisan. We need to go back to having a surplus before we think about helping others. Anyone who talks about maintaining spending programs or worse, increasing entitlement programs, is doing our country a disservice.

Patriotic Americans must take away Uncle Sam's credit card, cut it up, and not return it until he reforms his profligate spending. That means cutting programs that help senior citizens, the poor, teachers, the military, and other government employees. There's no way around this harsh scenario--being on a budget isn't easy for anyone. But unless you want Uncle Sam to default on his debt, rampant inflation, or 50% taxes on your children, you will support a balanced budget. If you're still not convinced we have to cut spending, all you have to do is go out there and find that money-growing tree. It's out there somewhere, probably nearby the Tree of Wishful Thinking. Hopefully you'll find it before we all go off a cliff.

http://www.youtube.com/watch?v=VYnZL0BOXDc

Signed,

Not the King of Wishful Thinking

Friday, August 8, 2008

Inflation, Revisited

Earlier, I wrote an article about how "core inflation" numbers understate real inflation. See

http://willworkforjustice.blogspot.com/2008/07/real-inflation-trimmed-mean-pce.html

T. Rowe Price just published an article in the "T Rowe Price Report" supporting my argument that "core" inflation is a fallacious statistic. See Alan Levenson, "Food, Energy Costs Spur Inflation Fears." No link available, as far as I can see right now, but here are some snippets:

Indeed, the CPI posted a year-to-year inflation rate of 4.9% in June...in contrast, inflation in the so-called "core" CPI, which excludes food and energy, was [recorded as only] 2.4%...higher inflation will become the most potent threat to growth.

In other words, "core" CPI is not accurate, as I explained earlier.

An interesting tidbit: Mr. Levenson said in 2007 he believes the Fed Reserve will keep rates steady all year; however, it sounds like the Fed needs to raise rates to combat inflation.

Judges and Life Tenure

All federal judges (not magistrate judges) get lifetime appointments. It's a great job if you can get it, but if you think absolute power would breed corruption, you'd be surprised. In practice, federal judges and their clerks (at least in northern California) seem more detailed with their decisions, not because of any inherent superiority in intelligence, but because it is harder for litigants to get to federal court. The federal courts' more restrictive barrier to entry (federal courts are courts of "limited jurisdiction") leaves them with fewer cases and more time to analyze them. More time to do something usually leads to an increase in quality.

In contrast, state courts get flooded with lots of weak cases and after a while, most judges, unless they have exceptional work ethic, tend to become jaded and/or extensively delegate to their smart, hard-working clerks. (By the way, the Hon. Judge Kevin McKenney of Santa Clara Superior Court comes to mind as one of the hardest-working judges in California.)

The WSJ recently wrote an article about a Los Angeles federal judge who is said to be out of control. It's a major embarrassment to the system, but kudos to the WSJ for calling out government corruption when it sees it. Here's an interesting line from the WSJ's article today, 8/8/08 (A9):

"Is the federal system well equipped to deal with incorrigible behavior by judges?"..."No, not where the behavior doesn't rise to the level of impeachment."

That's not a good sign. Would America's founders tolerate a government that included virtually unaccountable judges? I don't think so--they would have wanted some substantive difference between a British king and a federal judge. What makes the issue complex is that America's founders also promoted the "separation of powers" doctrine--the Constitutional principle that gives judges their independence--precisely so that federal judges would feel insulated from public opinion and the executive and legislative branches.

I'm not sure how to balance the tension between judicial independence and government accountability. Judicial independence sounds good in theory, but the federal courts' interpretation of the Patriot Act seems to indicate that judges, despite lifetime appointments, tend to move in lockstep with the herd, waiting until abuses are rampant before stopping them. At the end of the day, the newspapers and the media may be the only entities that can keep judges from running amok.

Update on November 10, 2008: from the SJ Mercury News, 10/10/08, John Corvino:

It's worth remembering, however, that the courts follow social trends more often than they set them. When the U.S. Supreme Court struck down laws against interracial marriage in Loving v. Virginia, the majority of states already had repealed such laws.

More on judges and judicial power HERE.

China and Tibet

One point of this blog is to try to provide the full story, instead of just one side. China's attitudes towards Tibet have received much negative press. But in today's Wall Street Journal, Ma Yinjiang explains his stance:

"No leader could let Tibet go," he says. "If it goes independent, then Xinjiang will go, then Inner Mongolia. China will become like the Soviet Union. I think these people want this because they want to destroy China. They aren't really interested in human rights."

(WSJ, August 8, 2008, A10)

Mr. Ma has a point. To him, it's a civil war, and his side is the North trying to ensure the South doesn't secede.

Ann Killion's Article on Lopez Lomong

Once in a while, a story makes you stand up and say, "This is why America and Americans should be proud of themselves despite the Bush II presidency." When C. Rice is repeating now-disgraced Alberto Gonzales' canard that "[E]very day is Sept. 12th," some optimism is in order.

Ann Killion wrote an article in today's SJ Merc about Lopez Lomong, who was adopted by Americans and is now on the Olympic track and field team. See

http://www.mercurynews.com/annkillion/ci_10136928?nclick_check=1

For three days and three nights, the boys ran towards freedom [after being captured in Sudan]...When the Rogers [his adoptive parents] bought him a chicken sandwich at McDonald's, he brought part of it home: He was used to eating chicken only a bite or two of chicken twice a year, and was surprised to learn he could eat the whole thing.

Mr. Lomong will be representing America at the Olympics, both literally and figuratively.

Sexual Harassment Video

Here's a video on sexual harassment called "The Temptress":

http://www.youtube.com/watch?v=3b7QwYQRiqw

This video doesn't break new records on the unintentionally funny charts, but it's still worth a look-see because it's so lame, but takes itself so seriously. Why hire a lawyer when excellent, nuanced videos like this exist?