2021 Wall Street Quotations

In February 2021, I decided to start a collection of quotes from Wall Street executives and pundits. 

February 9, 2021: "Now there are, with very few exceptions, no sectors that are cheap. [Yet] I think the market will gradually grind up during the year. I don’t see a correction anytime soon, unless the situation changes dramatically." -- JP Morgan's co-president Daniel Pinto (source: CNBC) [Shiller P/E Ratio 35.62]

February 10, 2021: "If there is a bubble anywhere, it is not in the equity market, it is in the fixed-income market." -- Cathie Wood, chief executive of ARK Invest (source: CNBC) [Shiller P/E Ratio: 35.59]   

February 17, 2021: from Eddy Elfenbein's blog:

Mark Hulbert has an interesting column at MarketWatch. It’s about a trio of academics who have devised a bubble-spotting formula. 

"Applying the formula the researchers derive, I calculate there is an 80% chance that the Technology Hardware, Storage & Peripherals index will be 40% lower than today at some point in the next two years... Though no other industries satisfy the researchers’ definition of a bubble, two others come close. They are also in the technology arena: Semiconductors and Semiconductor Equipment, and Software. Why focus on an industry that may be in a bubble, rather than the market as a whole? Prof. Greenwood told Barron’s that he and his fellow researchers learned from their study of the history of bubbles that they 'rarely are marketwide' events. Far more common, he said, is for a bubble to manifest in certain pockets of the market even as other sectors remain undervalued."

March 26, 2021: from Barron's, by Andrew Bary, headline: "Higher Taxes? Deficit Spending? Why the Stock Market Isn't Worried." [Shiller P/E Ratio: 35.75] 

March 27, 2021: from Bloomberg, by Ishika Mookerjee, Albertina Torsoli, and Lisa Pham, headline: "Funds Bet on a Consumer Boom to Rival 'Roaring Twenties.'" [Shiller P/E Ratio: 35.75] 

[Note: The Great Depression--and stock market crash in 1929--occurred after the excesses of the Roaring Twenties, as well as indications Germany would not honor WWI reparations.] 

April 8, 2021: from CNBC, by Kevin Stankiewicz, quoting Wharton School finance professor Jeremy Siegel: "It isn’t until the Fed leans really hard then you have to worry. I mean, we could have the market go up 30% or 40% before it goes down that 20%... We’re not in the ninth inning here. We’re more like in the third inning of the boom." [Shiller P/E Ratio: 36.81] 

April 11, 2021: "The path of least resistance for US equities remains higher." -- Bill Miller, CFA (S&P 500 4128.60)

April 15, 2021: "From a traditional perspective, the market is fractured and possibly in the process of breaking completely." -- David Einhorn 

May 23, 2021: "In real terms, the home prices have never been so high. My data goes back over 100 years... I don’t think that the whole thing is explained by central bank policy. There is something about the sociology of markets that’s happening." -- Robert Shiller, CNBC.com [Shiller P/E Ratio: 36.86] 

Guns and Butter

People who think power comes from the barrel of a gun are mistaken. Real power comes from controlling the conduits, both legal and technological, of the currency that buys the gun. The more power involved, the more entities can buy protection, whether domestic or international, fueling further expansion and thus influence. In short, guns are the result, not the cause of stability, which makes sense once you realize a village with nothing valuable has no need for advanced weaponry.

There is another component most people miss when discussing protection, and we can re-use the undeveloped village as an example. Such a village exists not only because of internal factors, but external ones. Its lack of development means it has not attracted foreign direct investment or cannot do so. Were it part of a larger economic unit, the larger economic unit would be interested in maintaining as little a gap as possible between its most developed areas and its least developed ones--assuming a cohesive system. (An empire merely makes the same mistake as a successful country, misapplying domestic lessons to international ones.) Though degrees vary, power is always connected somewhere so it can extend influence, the strong seeking out the weak. The absence of a need for a gun connotes not only a lack of influence but a lack of connectivity to neighbors and thus a failure to build sufficient conduits to exchange information. Now ask yourself: would you rather have a gun and a midnight sentry, or information that tells you when you will be attacked? 

I realized this morning though the United States has a strong military, it continues to decline because it attempts to overuse its influence overseas. If I am a small village, and a superpower approaches to offer its technology, which of course requires me to use its currency, I may be flattered, especially if I do not understand debt and currency arbitrage. Yet, even a naive villager realizes the same superpower that approaches and demands a rider requiring the village not to use another country's technology--thus inhibiting more diverse development--is not a true superpower, no matter the quantity or quality of its guns. The villager may even, after some deliberation, realize such a superpower does not see his community as an opportunity to exchange information but a way to block competitors. Now ask yourself: if you had a choice, would you rather buy guns from someone demanding an exclusive contract, or someone allowing you to diversify your economic contacts? 

The path from kampong to city to respected state may be long, uncertain, and arduous--and Singapore, which took this path successfully, makes its own guns--but the road from superpower to failed state is straightforward: when credibility goes, so does your empire. One wonders if USA President Biden, who is promoting unity, comprehends he is looking too far ahead in the dictionary. 

© Matthew Mehdi Rafat (January 2021) 

Slavery, Democracy, and the Jesuits

Though JFK preceded him, Joseph Biden, Jr. is set to become a Catholic president in the United States during a time of unprecedented Catholic power. Remarkably, most Americans do not know the Catholic Church was banned in America's founding colonies, notably New York City:

For most of the colonial period Roman Catholic worship in New York City was clandestine or nonexistent, because the Protestant Dutch and then the English enforced laws prohibiting the organization and maintenance of Roman Catholic churches. (From Encyclopedia of New York City) 

In 1816, Thomas Jefferson warned of the conflicts between Catholicism and republican governance: 

The first shade from this pure element, which, like that of pure vital air, cannot sustain life of itself, would be where the powers of the government, being divided, should be exercised each by representatives chosen either pro hac vice, or for such short terms as should render secure the duty of expressing the will of their constituents. This I should consider as the nearest approach to a pure republic, which is practicable on a large scale of country or population. And we have examples of it in some of our State constitutions, which, if not poisoned by priest-craft, would prove its excellence over all mixtures with other elements; and, with only equal doses of poison, would still be the best. [Emphasis mine] 

I must confess I did not know the "Republican" in Republican Party referred to republican governance, i.e., a republic, because my American teachers and professors glossed over Christian religious differences. Reading Jefferson's words, it is easier to understand a republic is the opposite of a monarchy, and America's founders discriminated against the Catholic Church because they were anti-monarchy (aka anti-papist). Unlike American students today, our founders would have had no problem connecting the structure of the Catholic Church and its doctrine of papal supremacy with European monarchs and Catholic collusion. Once Catholic, monarchs regularly expelled non-Catholics, eventually inducing Germany's Protestant Reformation. Discrimination begets discrimination, and the history of America can be best understood as a country founded on discrimination and its discontents. 

In the most recent Christian Science Monitor Weekly publication, I came across the following tidbit: 

Q: How did the Jesuits, a Roman Catholic religious order, become involved in slavery? 

They began to buy, sell, and hold slaves in South America. When they came to Maryland to start missions in the 17th century, they quickly became slaveholders. Other churches came to be slaveholders, too, but the Jesuits were among the largest slaveholders in Maryland during this period. (William G. Thomas III, author of A Question of Freedom, January 4 & 11, 2021)

Were Catholics and Protestants in America able to set aside their differences by shifting their discrimination towards African slaves rather than against each other? If unity is the goal, perhaps we ought to discuss whether America's chattel slavery and the racism that followed resulted from a transference of religious antipathy into a different-colored bucket. Such historical interpretation would align with our current political climate, where segregation is the norm and Catholics are considered Christians, even though all Christian offshoots, whether Christian Science or Seventh Day Adventist, exist because of splintering within the Protestant Church, which itself exists as a result of anti-Catholicism. 

Will President Biden assist his fellow citizens in reforming history lessons so more Americans can heal from four years of division? I doubt it. The only way American Catholicism could have succeeded so spectacularly is if Biden himself, along with most Christians, lack an understanding of both European and American history. Unfortunately for us, Europeans do not suffer similar educational handicaps, meaning Biden's presidency may come to represent not unity, but the ascension of the European Union. As of today, it appears we are continuing the pattern of modern American political negligence, where leaders focused on the Soviet Union only to see increased Middle Eastern threats, then focused on the Middle East only to see increased Asian threats, and are now focusing on Asia. History, it seems, may not repeat itself, but it often rhymes. 

© Matthew Mehdi Rafat (January 2021)

Book Review: William O. Douglas and The Anatomy of Liberty (1963)

While reading Supreme Court Justice William Douglas's The Anatomy of Liberty, I was struck by the little progress we've made since 1963. Almost sixty years later, American politicians, judges, and lawyers have made a liar out of Justice Douglas, who used his book to explain America's legal and political system to the rest of the world. 

I won't belabor you with exact quotes proven overly optimistic; it serves us better to understand differences between then and now. First and foremost, the spectre of nuclear extermination loomed larger for earlier generations. Students today read about WWII in history books, but Douglas lived Hiroshima and Nagasaki as real-time events. Like many of his peers, he realized nuclear proliferation meant every country in the world--including his own--was in danger. Regarding his generation's realization of foreseeable injury, Douglas wrote, "Whatever all the reasons may be, we walk the brink every hour of every day." (pp. 114)

Such fear--based on a reasonable assumption of ever-increasing risk--left politicians with no choice but to cooperate--at least so Douglas thought: "Now the sheer necessity to avoid the nuclear holocaust makes it necessary for us to build unity in common goals of an international character." (pp. 107) Douglas firmly believed technology's destructive potential would require greater cooperation, and he was not alone. One of Diego Rivera's most striking murals, "Man, Controller of the Universe," places the nuclear atom at the center with Vladimir Ilyich Ulyanov observing.

Mexico's Rivera believed scientific mastery of nature would lead to less drudgery for workers, creating a world without exploitation in which (socialist) governments would favor cooperation. Examples abound of intellectuals linking technology with greater collaboration out of necessity or natural progression; yet, as I sit in a Mexico City hotel in December 2020, it appears time has made fools of them all.

Douglas was a libertarian and Rivera a socialist, but despite contrasting political views, both men took it for granted that by 2020--if not earlier--cross-country cooperation would be optimized in favor of peace. By 1984, however, millions sang along to Alphaville's "Forever Young,"expressing a desire to stay childlike so as to avoid contemplating nuclear war. (In one performance, the lead singer salutes military-style during the lyrics, "Are you gonna drop the bomb or not?") If the Soviet-American conflict was caused by Western powers failing to include the also-WWII-victorious Russians within NATO, thus splitting the world in two spheres, by 1991, optimism emerged as the Soviet Union's economic fall produced a unipolar world. The very next year, Yoshihiro Francis Fukuyama, an American-born Harvard political scientist, authored The End of History and the Last Man (1992), declaring Western values the endpoint of human cultural evolution.

Time humbles us all, and in 2020, no reasonable person believes Western values or Western politics are universally appealing or even workable. The only inevitability accepted is the rise of The People's Republic of China, which has been quietly promoting a post-colonization, de-Westernized world after its 1950 invasion of Tibet to secure freshwater reserves. And so, despite Douglas's and Rivera's exhortations, we are experiencing déjà vu, where the threat of nuclear extermination continues but with different players using international institutions to gain advantages within increasingly splintered financial, technological, and content-distribution systems. In the past, only two hostile superpowers were in contention, which allowed us to focus on specific problems emanating from their friction. Today, the rise of regional powers asserting themselves will either destroy the idea of universal values and thus prospects for consensus, or make us yearn again for the greater simplicity of a bipolar world. 

And what of global cooperation? Sadly, except for the decade between 1991 and 2001, the picture looks bleak. Our current COVID19 pandemic is producing vastly different domestic outcomes and thus increased inequality and potential conflict. Furthermore, as most individuals worldwide suffer from economic uncertainty and greater dependence on governmental action, entities with the most secure digital infrastructure have gained influence while exposing globalization's indigestion of multiple technological standards. The old adage,"He who has the gold (and the military to protect it) makes the rules," has seemingly morphed into "That which provides your digital experience (and the best online security) is crucial to economic dominance and therefore unregulatable." As for diplomacy, I remember studying South China Sea maritime issues at Singapore's National University in 2001. Two decades later, the same issues exist, meaning exporting countries have been unable to resolve something as straightforward as shipping routes. I suppose I do not need to tell you that more countries possess nuclear weapons than ever before.

Perhaps global cooperation was doomed once governments used digital backdoors to spy on allies and competitors while private corporations tracked consumer behavior in order to maximize profits. Human beings may be willing to sacrifice some privacy for greater security, but a paradigm in which governments and corporations conceal technological vulnerabilities in order to peddle propaganda and gather data cannot succeed. As our earlier generation's worst fears are realized, their words might be heard asking for whom the bell tolls: 

[T]oday the young writer's characters must function not in individuality but in isolation, not to pursue in myriad company the anguishes and hopes of all human hearts in a world of a few simple, comprehensible truths and moral principles, but to exist alone inside a vacuum of facts which he did not choose and cannot cope with and cannot escape from like a fly inside an inverted tumbler. -- William Faulkner (1958)

A world lacking integrity or diplomacy necessarily reverts to "might makes right," which carries all the burrs and hooks one ought to expect. Listen to Douglas's prescient warning: 

So apart from the problems of nuclear war, disarmament is the world's number one concern... For it is only through disarmament that war can be prevented and adequate resources released for raising the world's standard of living. Prevention of war may be well-nigh impossible if the race to get bigger and better stockpiles of bombs continues... 

The vast gulfs that exist between various world cultures mean that the common ground will be narrow and selective... [and] only limited areas where a common ground can be found. Yet they are important, indeed critical, ones; and they will expand as the peoples of the world work with their newly emerging institutions and gain confidence in them... The problem of survival is to widen [currently limited] areas of consensus [aka the basis of law]. 

Pray tell, which institutions do the people of the world agree deserve our confidence? Can most people within a single country point to a single institution they wholly trust? Here I must quote Faulkner again: 

[There is a] belief that there is no place anymore where individual man can speak quietly to individual man of such simple things as honesty to oneself and responsibility toward others and protection for the weak and compassion and pity for all, because such individual things as honesty and pity and responsibility and compassion no longer exist, and man himself can hope to continue only by relinquishing and denying his individuality into a regimented group of his arbitrary, factional kind, arrayed against an opposite opposed arbitrary, factional, regimented group, both filling the same air at the same time with the same double-barreled abstractions of "peoples' democracy" and "minority rights" and "equal justice" and "social welfare"—all the synonyms which take all the shame out of irresponsibility by not merely inviting but even compelling everyone to participate in it.

That was 1958. Take a look at this sign in my hotel's restaurant: 

We don't need to know Spanish to know the intent of the sign-maker, nor the fact that it is easier to make a sign than to effectuate its lofty goals. I don't doubt this particular hotel sincerely believes in anti-discrimination, but it happens to be located in the most affluent district in the entire country, a country with vast income inequality, which is precisely why it is so confident signaling progressive values--and precisely why it shouldn't be. Rather than providing optimism based on greater understanding of each other, globalization's benefits have covered up cracks in the human dynamic, cracks most of us know are bound to swallow us whole unless seen and fixed. Are good intentions all we have to offer Donne, Faulkner, and Douglas? If so, then we have failed, and we don't deserve to survive and probably won't. 

© Matthew Mehdi Rafat (December 2020)

“The Constitution is paper. The bayonet is steel.” -- Haitian proverb 

Bonus: "When will we and the Russians (not to mention the Chinese) awaken to the realization that each can no longer go it alone, that, like it or not, we are in the same fragile boat and desperately interdependent?" -- William O. Douglas (1963), pp. 123-4

"Today all humanity is tied irrevocably together in an effort to escape the nuclear holocaust, to survive, to make technology the servant." -- William O. Douglas (1963), pp. 167 

The More Things Change, the More They Stay the Same, Part 1836352

With all the positivity surrounding 2020's successful marijuana legalization initiatives, you'd think people were experiencing a new phenomenon. Take a look at this Playboy July 1973 page, which demonstrates American lawyers and legislators have failed to accomplish their objectives for almost fifty years. 

And so it goes. 

© Matthew Mehdi Rafat (2020) 

Good Journalist Hunting, Part 3: Criminal Justice

"I am not educated, nor am I an expert in any particular field--but I am sincere, and my sincerity is my credentials." -- Malcolm X 

My Credentials

In the spirit of Brother Malcolm, here are my credentials regarding America's legal system: 

Sanctioned 11,000 USD by Northern District judge Samuel Conti (the party seeking sanctions later declared bankruptcy); 

Sanctioned 1,000 USD by Santa Clara Superior Court judge Socrates Manoukian, who reversed the sanctions verbally at a subsequent appearance once he realized a written order was required;

Flipped off an FBI recruiter at Levi Strauss & Co.'s HQ in San Francisco, California after I criticized the agency and he demanded my name. Fired by Levi's the same day, took a trip around the world shortly thereafter. (Fun fact: the company likes to shorten its name to LS&Co.);

Voluntarily resigned from D.C. Bar in protest against Trump v. Hawaii (2018) and mailed my admission certificates to Supreme Court Justice Sonia Sotomayor;  

Arrested by police in 2016, sent to jail for several hours, accused of being under a controlled substance, released without charge due to "LACK OF SUF EVID." (Though I have advocated legalization of most drugs, I do not drink alcohol, nor do I smoke.) 

Arrested by police in 2019, sent to jail for several hours, accused of intimidation and obstruction. On the same day I sent trial briefs to the Santa Clara County District Attorney's Office, the deputy district attorney said he would dismiss the case. At the next court hearing, the judge granted the prosecutor's request to dismiss my case in the "interests of justice." 

As of December 2020, I remain in good standing with the California State Bar since 2002 and have never had a client submit a complaint against me. 

Not All Government Agencies Believe in Transparency and Public Access

"I had a good working system of paying off policemen. It was here that I learned that vice and crime can only exist, at least the kind and level that I was in, to the degree the police cooperate with it." -- Malcolm X, referring to his pre-Islamic days as a numbers runner, bootlegger, and pimp. 

From Paul Krassner's The Realist, when abortion was illegal throughout America.

When dealing with American government, an honest man learns his experience varies based on which neighborhood he happens to visit, rendering all positive and negative stories equally true, and guaranteeing substantial private sector involvement. In fact, the more the government fails, the more the private sector enters with proposed solutions. Without balance, we shall live in a country with as many technological and regulatory standards as municipalities and also one where national leaders offer increasingly harsher promises of reform and efficiency.

Today, Americans find it fashionable to bash local cops but not the national military, which lacks sense until you realize most of America's GDP is manufactured, shipped, and protected by the military and its virtually unlimited spending--including marketing--whereas police departments cannot run annual deficits. 

Kurt Vonnegut Jr. Interview, Playboy Magazine, July 1973

Though most African-Americans do not trust the police, their complaint has to do with competence, i.e., poor training, otherwise known as poor formal education. Subjected to constant examples of abuse of discretion, few Americans realize cops are only one piece of the legal ecosystem and its most easily derided. A landscape prioritizing mobile footage of police officers failing at their jobs while prosecutors and judges enjoy intransparency tilts toward instability. Consequently, the typical American voter has no qualms voting lawyers into political office despite the fact that incompetent police officers cannot exist without corrupt lawyers, and corrupt lawyers cannot exist without indolent judges. (It is worth noting most judges are merely lawyers with more political connections than other lawyers.). 

Part of the problem is that California judges deem themselves masters of their courtrooms and set their own rules, which include banning recording devices. Santa Clara County, California has notices throughout courtrooms citing Nixon v. Warner, 435 U.S. 589 (1978) and Marin Independent v. Municipal Court, 12 Cal.App.4th 1712 (1993) as authorities against transparency. The result? Unwarranted prestige of one governmental branch over another, with disproportionate respect gained from deliberate opaqueness. It is not until we actually look up the aforementioned cases that we realize the extent to which judges have gone to bar public access and thus public scrutiny. Incredibly, the "Nixon" in Nixon v. Warner refers to impeached President Richard Nixon, meaning California's judicial branch is using a criminal executive as protection against public access. As for Marin Independent, the court cited Nixon and used circular reasoning, holding that media can attend and report on judicial proceedings but has no absolute right to record proceedings because courts can set their own rules. Stated more simply, people can't record court proceedings because the king, er, court says so. 

Counterpoint from libertarian Justice William O. Douglas's book, Anatomy of Liberty (1963)

In California, I have civil law experience, but while practicing, had never seen criminal court proceedings other than assisting a colleague with a routine DUI--incidentally, an ample cash cow for local law enforcement when fines are paid as part of a negotiated plea. What I saw when wrongfully arrested would shock any professor, journalist, or academic who has ever praised the American justice system or who believes in robust checks and balances. Despite my legal education, I had no practical knowledge of criminal courts until my two arrests. Lawyers work either on civil or criminal cases, and even the courthouses are different depending on whether a case is criminal or civil.

Relevant Statistics

First, five statistics:

1. "74% of people in American jails have not been convicted of a crime. Sometimes this is because they’re considered a flight risk or danger to society, but the majority of individuals in jail are there because they can’t afford bail." -- Christian Science Monitor, August 3, 2020 

2. "[M]ore than half of Brazil’s prison population is eventually released without a conviction." -- Christian Science Monitor, August 27, 2020 [I include this statistic because astute readers will notice a connection between USA and Brasil, two countries that share disproportionate Catholic legal influence and a non-coincidental history of chattel slavery.] 

3. "One in three U.S. adults has been arrested by age 23. Communities of color; lesbian, gay, bisexual, and transgender individuals; and people with histories of abuse or mental illness are disproportionately affected. As a result, between 70 million and 100 million—or as many as one in three Americans—have some type of criminal record." -- from The Sentencing Project (2015) 

4. "Usually missing from the conversation about mass incarceration, however, is any recognition that imprisoned or detained Americans currently represent barely one-tenth of the total population of felony convicts. As a ballpark estimate, over 20 million Americans in society at large currently have a felony in their past, and this immense population is effectively statistically invisible." -- Dr. Nicholas Eberstadt (2019) 

5. "The countries with the highest estimated pretrial detention populations on an average day are, not surprisingly, those with the largest general populations. The United States heads the list with 487,000, followed by Brazil (190,000), Mexico (98,000)... As a result of these high pretrial detention rates, 10 to 40 percent of the entire incarcerated population is behind bars without a conviction in most countries in the Americas." -- Richard Aborn and Ashley D. Cannon (2013) 

6. "Misdemeanors... [low-level criminal offenses] account for about 80% of all arrests and 80% of state criminal dockets, says Alexandra Natapoff, a law professor at the University of California at Irvine and author of Punishment Without Crime." -- from NPR (2020) 

I had four thoughts when evaluating the above statistics. First, American police possess virtually untrammeled discretion--which means judges, city councils, and unions have failed in their presumed oversight function. Second, it follows from the aforementioned that police unions must have substantial power over city councils as well as judges and prosecutors. Third, prosecutors have little say in day-to-day police work and appear to operate in totally separate spheres than police--despite the teamwork one would assume in their symbiotic relationship. (Using an American football analogy, America's criminal justice system is like a QB attempting passes to a WR that drops the ball 3/4 times and doesn't know the play beforehand.) Fourth, prosecutors and police departments use misdemeanors to justify maintaining or increasing funding. After evaluating the above information and spending allocations, you may decide the military controls America's national government and police unions control local governments while politicians rotate every four years to provide the appearance of choice. The overall picture is more complex.

When anyone is arrested, police have an option to take the person to a holding cell-- typically a county jail--or "cite and release." The former requires fingerprinting, a health questionnaire, a mug shot, and other steps commonly referred to as a "booking." The latter is a written citation sent to the county district attorney's office, which then decides whether to file charges. Only if charges are issued are you required to take further action, including checking in at the local police station. Right away, you can see every single cop, whether rookie or veteran, has the power to make your life easier or harder. 

You may also notice we are dealing with two different government agencies: the police work for a city, whereas the jail and district attorney's office are run by a county. Both answer to separate government boards and sometimes sue each other to establish their required scope of duties, indicating a potentially adversarial relationship. (Imagine the American football game we described in the previous paragraph, and now add separate assistant coaches who don't always get along and who are paid from different sources.) 

Arrest Number One

In my first arrest, the government accused me of taking illegal drugs and arrested me while I was walking. (Again, I do not drink alcohol, nor do I smoke. I am a middling but dedicated former athlete and coach.) After my arrest, I was given a blood test, fingerprinted, questioned by a nurse, offered a Pop Tart, then put into a temporary cell with two other people. (I was also photographed, but I can't remember where in the process this step occurred. It may be that the steps are done based on whomever happens to be in front of a counter rather than in the back.) While I stayed in the cell for several hours, pacing back and forth out of boredom, four to five other people cycled through the same cell, most of them drunk. It dawned on me that even a lowly county jail is an expensive economic ecosystem. My arrest alone bolstered numbers used to justify taxpayer dollars to a lab technician; a nurse; several police officers; the district attorney's office; and private companies selling snacks. 

After my release, my personal items were returned, and I used my mobile phone to book a ride-hailing service back to my residence. Other arrestees pay substantial towing fees because they are unable to move their parked cars in a timely manner. If released, they are returned a key to a car that is often fifteen to twenty miles away, because most homeowners don't want to be anywhere near a jail or prison.

Arrest Number Two

My second arrest was at a sporting event. A drunk fan had the audacity to complain to private security about me, even though he was the one causing problems. Long story short, he was with three other people, I was alone, and I suppose four tickets are worth more than one. Unbeknownst to most patrons, sporting arenas are staffed by private sector workers but at least partly owned by cities. Police departments love professional sports because an insurance policy or the law requires a certain number of officers at events, and strapped local governments view sports as a way to boost officer pay and morale off-budget. In my incident, arena police didn't do any work or independent investigation. They simply carried out the wishes of the low-level private security guard and made an arrest. 

If you've been reading closely, then you've already extracted the unsteady and variable relationship between the following factors: annually balanced budgets; union negotiations; automatic cost of living increases (aka COLA); voter antipathy towards higher taxes; and competing government agencies. Such interplay provides perverse incentives in favor of arrests--especially considering most arrestees do not have enough out-of-pocket damages to justify a lawsuit. In cases where cities have paid substantial sums to arrestees, serious death or physical injury was part of the arrest, such as in NBA star Thabo Sefolosha's case. Seen another way, an arrest that doesn't lead to a conviction or even a charge still requires the same work as a legitimate arrest, and come budget time, no one is penalized for an arrest that doesn't generate a lawsuit and payout. 

After my second arrest, I was taken to the same jail as before and released after several hours. This time, the Santa Clara County District Attorney's Office decided to charge me, which meant they issued a warrant. Unfortunately, they issued the warrant (aka notice to appear) to my residence months after the incident and when I was out of the country and thus had no way of checking in. I later discovered the government is not required to personally serve notice of a misdemeanor warrant/charge. I am unsure if the same latitude apples to felonies, but compare such discretion with a civil case: when I file a civil lawsuit, I must effect personal service of the complaint unless I swear to the court I have tried every means of personal service and failed, a process that requires hiring a third party and/or using a specialized database. It doesn't matter if the case is worth 250,000 dollars or 8,000 dollars--I have to effect personal service, which means I have to do everything humanly possible to ensure you receive the complaint in your hands. (Note: in California, restraining orders utilize a less rigorous process than civil complaints, leading to potentially widespread abuse--and more work for police.) If the court later decides I was not forthcoming about my diligence in locating the defendant, the judge can sanction me and/or refer me for disciplinary action, which could result in the loss of my license to practice law. 

Moreover, as a civil lawyer, I cannot sit on a complaint for months as the district attorney did in my case. I am required to serve the complaint within a short period of time and appear at a status conference regularly to tell the court I am actively pursuing the case. If I appear months after I file a complaint and tell a civil court judge that I have done nothing, the judge will likely dismiss the case sua sponte. Suffice to say, I was more than a little stunned at the gap in required diligence: work for an individual or business trying to get money, and you better cross your "i"s and dot your "t"s, or you can't get past the first stage of litigation; work for a government that can imprison you for failing to appear at a police station, and you can jail someone for 11 months without a reasonable person ever receiving or knowing about a warrant. 

Here we may be tempted to judge government more harshly than the private sector, but what we're actually seeing is government exempting itself from rules in order to avoid unnecessary costs or the potential for employee discipline. Since most governments are self-insured, any litigation, whether employee mistreatment or police brutality, impacts innocent taxpayers. In short, when the government "turtles," its shell is designed to protect the innocent. What's the catch? "Turtling" protects taxpayers but destroys the ability to see defects in governance, ensuring long-term decline. On corruption, George Carlin once remarked, "It's a club, and you ain't in it." When threatened, the "club"--any club, really--binds together more tightly, preferring jurisdictional carveouts as defectors sprout like statutory subsections from an original statute. The outsiders, aka the "others," leave because they are ignored or poorly treated, and they leave because the main body of law has failed to institute effective procedures alerting them to dissatisfaction. Even if you don't know Goodhart's Law, you know incentives matter, and incentives drafted in response to creeping corruption require plain eyesight, not rose-colored glasses or blindness. 

Predictably, as voters raise complaints, city councils--staffed mostly by lawyers and de facto union representatives--increase regulation. Yet, because the regulation is like an NFL front office demanding changes to the strange QB to WR scenario discussed earlier, we have the additional obstacle of the blind inserting themselves into a game they do not fully understand. Faced with miscommunication and mixed signals, the QB, the WR, and the coaching staff all form their own clubs to insulate themselves from further regulation. More arrests are made or not made to placate the front office (aka city council), and regulation intended to reform has merely decreased morale: "These arrests are based almost entirely on the word of cops, who say they are incentivized to round up as many 'bodies' as they can." 

Meanwhile, in criminal court, the district attorney runs the show. The judge, being structurally independent, has no pre-trial contact with the police or the accused, and thus relies on the integrity of the district attorney, who in turn depends on the integrity of the police. At the hearing where my charge was dismissed, about thirty other cases were present, and the judge didn't know any facts of my case, not even my arrest date--even though I could have been sent to jail for months. The judge brushed aside my comment that California's de facto one-party state had seemingly produced an outcome where life and liberty are treated with less respect than property and money. (Later, I realized civil courts function better than criminal courts because businesses, especially cost-conscious insurance companies, regularly use civil courts, whereas poor people and government employees regularly use criminal courts. Stated another way, each civil court filing provides hundreds to thousands of dollars for the government as well as the private sector, but each criminal court case is a negative taxpayer cost because criminal courts do not charge the accused fees or costs.) 

When Americans think of respected American judges, they are thinking of appellate courts with limited dockets, not busy trial courts. The United States has a few judges who will be remembered as bucking the tide of totalitarianism, namely Judge James Robertson, Robert Takasugi, Roger L. Gregory, and of course Justice Sonia Sotomayor. None of them are now trial court judges, which means you, an ordinary citizen, could never be heard by them. At the first level of litigation are mostly judges who do not understand much, who specialized in only one area of legal practice, and who are at the mercy of information given to them by lawyers. Were tragedy not certain, one might marvel at the fact that American courts depend on the integrity of lawyers in a country where most people do not trust lawyers and most lawyers do not trust each other. 

Conclusion

As of 2020, I am not actively practicing law, and I've enjoyed not wearing a suit in five-plus years. Abraham Lincoln once said, "Let no young man choosing the law for a calling for a moment yield to the popular belief -- resolve to be honest at all events; and if in your own judgment you cannot be an honest lawyer, resolve to be honest without being a lawyer." When I realized I could not give my clients reasonably predictable outcomes based on the evidence, I resolved to quit practicing law as soon as possible. To the extent Americans cannot find an honest lawyer, judges may realize too late they have relegated American courts to the realm of the rich and the overinsured. 

It is tempting to say the United States should become like India, a country with perhaps an even more complex legal system. After all, post-colonial India excels at technology within a large, multicultural, and diverse land once colonized by the British, and no less a visionary than Jeff Bezos has said, "I want to make a prediction... I predict that the 21st century is going to be the Indian century." Realistically, we should strive to be exactly like ourselves, no better and no worse, and accept that growing pains are a normal part of a young nation's growth. One day, we will realize the foundation of globalization was built on an inherently insecure technological standard, and we will understand our devolution from civilization to fragmented security state. For now, until diplomacy and global cooperation improve, all we can do is hope our lonely betters survive to tell our stories as we stumble along in open darkness. 

© Matthew Mehdi Rafat (December 2020)

Dedicated to David Simon, creator of The Wire (2002-2008) 

Disclaimer: Nothing herein is legal advice. As of December 2020, I am not accepting new clients. I am writing solely in my capacity as an observer, and your experience with police and/or the criminal system may differ substantially from mine. 

Bonus: Good Journalist Hunting, Part 1 is HERE. Part 2 is HERE. 

Update: I don't mean to imply civil courts are perfect or more conducive to justice than criminal courts. Most civil court motion judges don't read all of the parties' briefs, but their law clerks prepare memorandums for them, which provide summaries of relevant law and facts. Civil court is procedurally intensive and geared towards creating a record of everything, which delays justice but also tends to soften both parties' original demands. In state criminal court, the district attorney functions as the judge's de facto law clerk until trial, blurring the lines between independent judiciary and executive branch (i.e., the district attorney acting on behalf of the state, mayor, and police). Compared to civil cases alleging over 25,000 USD in damages, most criminal cases lack bespoke dispositive motions because the system assumes a trial will take place, even though most civil and criminal cases settle or plead. 

Since lawyers know most cases settle, they are incentivized to overcharge or to allege every possible violation, but with an important difference: if a district attorney overcharges, s/he can usually drop the unnecessary charges before trial without consequences, whereas a civil lawyer, upon opposing counsel's request, must spend hours matching all of the facts and evidence to each element in each claim early in the case. This is another way of saying criminal statutes are extremely broad, whereas civil statutes at least attempt to restrict both parties. At the end of the day, civil lawyers not working for insurance companies have to show their clients results to get paid, and if a civil lawyer files too many claims or motions, at some point, the civil lawyer's own availability or client becomes a check and balance on excessive behavior. 

Finally, some civil lawyers do get default judgments against individuals by publication or by serving the complaint at an old address, but they still have to declare under penalty of perjury that 1) the address they used is the one given to them by a third-party investigator or specialized database (Lexis-Nexis, etc.); and 2) they attempted personal service at known addresses, including work. Any defendant not personally served can also file a straightforward motion to remove a default judgment if plaintiff failed to exercise proper due diligence. 

Update: regarding court transparency, the following opinion from federal Judge Davila in USA vs. Elizabeth Holmes (2021) is useful: 

The United States Supreme Court has held that the right to attend criminal proceedings “is implicit in the guarantees of the First Amendment.” Richmond Newspapers, Inc. v. Virginia, 448 U.S. 555, 556 (1980). The First Amendment right of public access extends to pretrial proceedings as well as documents filed in connection with those proceedings. Associated Press v. U.S. Dist. Court for Cent. Dist. of Cal., 705 F.2d 1143, 1145 (9th Cir. 1983); see also Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172, 1178–79 (9th Cir. 2006) (“Historically, courts have recognized a ‘general right to inspect and copy public records and documents, including judicial records and documents.’” (quoting Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 597 & n.7 (1978))). Access to judicial records, however, is “not absolute.” Kamakana, 447 F.3d at 1178. The Supreme Court “has made clear that the right to an open trial may give way in certain cases to other rights or interests, such as the defendant’s right to a fair trial or the government’s interest in inhibiting disclosure of sensitive information.” Waller v. Georgia, 467 U.S. 39, 45 (1984).

Something Wicked This Way Comes?

The United States recently held an election, and results are pending two weeks later. Regardless of the outcome, we must finally admit the American political scene isn’t something others want to emulate—at least not without substantial bribery. No longer confined to smoke-filled rooms with nondescript doors, today’s Pax Americana bribes take place at golf courses, academic institutions, and legislative bodies, culminating in an American national debt of 26 trillion dollars. 

Empire-building requires allies, and allies are apparently becoming more expensive. Though the inscription on the back of U.S. currency states “In God We Trust,” debt appears to be the undisputed binding agent. According to the Institute for International Finance, the coronavirus pandemic increased global debt to 272 trillion American dollars, adding symbiotic ballast to the more honest phrase, “In Debt We Trust.” Like all co-dependent relationships, momentum is key, and any well-traveled American has realized the momentum that made America great after 1991’s fall of the Soviet Union has shifted elsewhere. 

The United States was particularly vulnerable to political slogans due to its inability to recognize propaganda even as groups hardened around selectively-edited truth. (The world would be more decent were recruiting and advertising budgets called by their true name: propaganda.) Future historians will note entrenched divisions but are less apt to recognize its causes—and oh, the causes. Not only are they large, containing multitudes, Walt Whitman’s earlier words ne’er rang truer: “The past and present wilt--I have fill'd them, emptied them…” And for what? Lacking context, the abyss awaits once again, another empire ready to fall. 

My intent is not pessimism, but edification; namely, to show future generations the many-splendored ways a great nation can falter and never recover. Most astoundingly, though sources of political divisions are well-known to many Americans—gerrymandering plus local resistance to unfunded national mandates seeking reform—nothing can be done because once divisions encompass the weight of trillions of units of debt, everyone's interest is to go along. You'd think “going along” would coincide with “getting along,” but as it happens, the inevitable isn’t always certain. That’s our first lesson: knowledge is wonderful, but knowing the right path doesn’t mean anyone will follow you. Knowledge needs credibility to be meaningful in civil society, and credibility’s formula is complex and sometimes impervious to examination. 

We mentioned institutional bribery, but nothing fundamental has changed since at least the 18th century. Samuel Johnson may have said it best: “In civilized society, personal merit will not serve you so much as money will. Sir, you may make the experiment. Go into the street, and give one man a lecture on morality, and another a shilling, and see which will respect you most.” Americans would do well to remember governments can increase debt to win friends and placate enemies, but lasting loyalty is hard to find and even harder to buy. Lesson number two: unless institutions ensure they serve values of infinite duration and are able to reverse course when—not if—they go astray, nation-building and globalization are all for naught. 

If money and knowledge mean little in the long run despite their attraction, on what grounds shall we stake our claim? Locating suitable ground is difficult in every era because the future is always fragile. Money--a universal siren song--increases ego and power even if its possessor lacks wisdom and especially when debt is readily available. In this way, the greater the outward success, the more humility, a crucial element of all progress, cries out: Help!  To mitigate prosperity's unctuous byproducts, note the following: everything is incremental unless abject failure occurs. In other words, if you have succeeded, it is because you and your neighbors learned from others’ failures and benefited from time’s accumulative value. Note also that knowledge is neither good nor bad, neither positive nor negative. Its trajectory of success depends entirely on one’s ability to link personal knowledge to institutional knowledge useful to future generations. You have understood our third lesson when you realize it is the same as our second lesson.

Our fourth lesson is two-pronged: history and incentives. Growing up in the United States, I was inundated with the superiority of the Western capitalist system and believed it true not as an inherent economic matter, but because of its ability to absorb immigrants and thus new ideas. At the time, I had not traveled extensively, and I did not understand world history. I had no way of knowing USA’s most recent immigrants were present as a result of foreign policy mistakes and attempted coups rather than organic openness. A short summary may be useful: 

 White residents with Hispanic last names filled Miami, Florida after a failed CIA coup against Cuba’s Fidel Castro, ironically himself from noble Spanish lineage.

Seen in Sintra, Portugal

 Cupertino, California is home to residents who are Taiwanese and not Chinese because they were on the losing side of the Chinese Revolution, which rejected Western corruption. (Malcolm X called the Chinese who fled "Uncle Tom Chinese," i.e., people who betrayed their culture and country in service to American and European hegemony.)

 In southern California, Iranians live in Beverly Hills, California only because Western governments saw value in Iranian oil and natural gas.

 Meanwhile, in northern California, numerous Vietnamese restaurants exist because the Catholic Church, using Joseph McCarthy and Archbishop Ngo Dinh Thuc, successfully lobbied Congress to split north and south Vietnam into de facto Communist and Catholic countries. The two-state attempt was unsuccessful, forcing the United States to re-settle foreign agents, who were conveniently assisted by Catholic nonprofits receiving both taxpayer funding and tax exemptions.

Even America’s Olympic medals appear immoral when considering American Christians (and others once connected with Catholic Spain) were able to breed the strongest Africans because they were convinced of God-given racial differences within a context of global trade of tobacco, sugar, and cotton.

Now we may discuss incentives. Most people view incentives from the back-end—being nudged in a particular direction—rather than the front-end, i.e., marketing and mandates. In USA, one reason I am certain of near-term decline is because politics has been reduced to another marketing gimmick, a show where governments signal importance by reacting decisively to events while protecting image at the expense of authenticity. Some cauldrons should not mix together, and the aforementioned political dynamic places the witches’ recipe firmly in the hands of unaccountable third-parties, with politicians serving a pre-fabricated brew guaranteed to poison. An attorney might cite Citizens United v. Federal Election Commission, 558 U.S. 310 (2010), as the date marketing received a license to overwhelm sense, but marketing, at its root, is merely a promise based on words and images. W.H. Auden, my favorite poet, aptly summarized the age-old conflict inherent in mammalian speech:

Not one of them was capable of lying,
There was not one which knew that it was dying 
Or could have with a rhythm or a rhyme 
Assumed responsibility for time. 

Let them leave language to their lonely betters 
Who count some days and long for certain letters; 
We, too, make noises when we laugh or weep: 
Words are for those with promises to keep.

Is a legislator’s time at the podium or media outlet an attempt to effectuate a promise? If so, how can this be possible unless we assume a one-party state or a paradigm lacking checks and balances? 

Is billionaire Warren Buffett an insurance salesman propped up by a banking system further propped up by an unaccountable Federal Reserve? Or has he singlehandedly changed the world by bringing together billionaires in search of the public good? 

Is the Catholic Church’s anti-abortion stance designed to more easily funnel government funding to Catholic-dominated voting districts, or genuine concern about society’s moral failings? 

Does a black American “welfare queen” represent personal failure or the failings of an economic system unable to correct racial segregation? If over 80% of African-American women are overweight because their ancestors were bred like animals by enterprising slave traders, should companies allow certain groups more gym time, or should some people more readily accept a manual labor position? On the flip side, when an African-American athlete proudly salutes the American flag, is he ignorant of his country’s history, or is he an optimist who believes in progress? 

All of the above questions have objectively correct answers, but none ascertainable in our lifetimes. Each answer begins with one of the two interpretations, and then depending on the time of analysis, ends somewhere at the other end. If we are lucky, we muddle in the middle as long as possible. By way of example, imagine the Alpha and the Omega or al'Awwal (الأول) and al'Akhir (الآخر), but in a quantum computing setting involving collective free will: the answer is ever-present and yet always changing. 

Perhaps a more concrete example would be instructive. Consider the now-unified country of Germany, once known as the Federal Republic of Germany (Bundesrepublik Deutschland) and the German Democratic Republic (GDR) aka the Deutsche Demokratische Republik (DDR). When we discuss Germany, which Germany are we entitled to use for analysis? The future and past are necessarily intertwined, so if we only take today’s Germany, will our analysis be complete? If our analysis is almost always incomplete, then do you now understand the “crucial element” we discussed earlier? 

Yes, the fourth lesson is indeed the same as the second and the third, but you could not see it because marketers and politicians have spent billions of dollars proselytizing the belief everyone can go wherever they like on the al'Awwal (الأول) and al'Akhir (الآخر) timeline—often at a cost exceeding selectively-blind allegiance. In reality, your life involves predetermination as well as free will, a fact evident to those who recognize history was always assigned a seat at your table, whether invited or not. Luckily for Americans, their table may wobble, but it is still vast, it still contains multitudes, and unlike Hong Kong or Singapore, there are many, many empty seats available. 

I will leave the last lesson to baseball player Peter “Yogi” Berra: “It’s tough to make predictions, especially about the future.” I am uncertain of our specific place in the nation’s timeline, but at this point, whether America’s table continues to wobble until it breaks is an outcome favoring free will over predetermination. In simpler terms, it is, once again, up to the youth, especially the builders, lovers, writers, and artists. Fix the table. There is time still. 

© Matthew Mehdi Rafat (November 2020) 

These are really the thoughts of all men in all ages and lands, they are not original with me, 
If they are not yours as much as mine they are nothing, or next to nothing, 
If they are not the riddle and the untying of the riddle they are nothing. 

– Walt Whitman 

And I know that the hand of God is the promise of my own, 
And I know that the spirit of God is the brother of my own, 
And that all the men ever born are also my brothers, and the women my sisters and lovers, 
And that a kelson of the creation is love... 

– Walt Whitman

The "rise of [American political conservatism in the 1980s] showed that hypocritical nostalgia for a kinder, gentler, more Christian pseudo-past is no less susceptible to manipulation in the interests of corporate commercialism and PR image. Most of us will still take nihilism over neanderthalism." -- David Foster Wallace