Seattle Desegregation?

The U.S. Supreme Court handed down the decision in Parents Involved in Community Schools v. Seattle School District No. 1 yesterday. In what will be quoted forevermore, Chief Justice Roberts wrote, "The way to stop discrimination on the basis of race is to stop discriminating on the basis of race." Justice Breyer called the opinion simplistic. Justice Stevens, as the most tenured judge on the Court, stated that the Court is radically changing precedent because the Supreme Court justices in the past would have disagreed with the Seattle decision ("It is my firm conviction that no Member of the Court that I joined in 1975 would have agreed with today’s decision.").

When reading the majority opinion, I was struck by how much enmity Justice Roberts has created between the justices despite his pledge to unite the Court and create more civility. After writing for the majority, Roberts then blazed through Justice Breyer's dissent and dissected it like a law clerk attacking another lawyer's brief--or, to be more colorful, Sherman going through Atlanta. In contrast, Justice Kennedy, as the fifth vote necessary to have a majority, appeared to distance himself from Roberts in various sections in a separate concurrence. Justice Thomas also seemed to go out of his way to be respectful to Justice Breyer, saying that while he has no doubt Breyer's intentions are good, the law must remain as immutable as possible rather than being contingent on a particular judge applying the law.

In short, Roberts stated that there had to be a compelling reason to use race. For law students, this is Con Law 101, i.e. the strict scrutiny test. Kennedy appeared to try to compromise by saying that diversity was a compelling goal, and other methods could be used to create diversity, such as locating new schools in neighborhoods that would naturally draw upon different races (although one wonders how this would be accomplished if some neighborhoods are already segregated--I predict a future opinion echoing O'Connor's disdain for gerrymandering, where she famously called some of the Congressional districts similar to a Rorschach test or a "bug splattered on a windshield.") Breyer essentially stated that the Court is betraying precedent and twisting the intent and spirit of Brown v. Board of Education.

The opinion is most intelligent when differentiating between de jure segregation and de facto segregation. The conservatives seem to say that de facto segregation is permissible. The paragraph that seems to lay the best rationale for the decision is directly below:

"The Court’s emphasis on‘benign racial classifications’ suggests confidence in its ability to distinguish good from harmful governmental uses of racial criteria. History should teach greater humility. . . . ‘[B]enign’ carries with it no independent meaning, but reflects only acceptance of the current generation’s conclusion that a politically acceptable burden, imposed on particular citizens on the basis of race, is reasonable.” Metro Broadcasting, 497 U. S., at 609–610 (O’Connor, J., dissenting). See also Adarand, supra, at 226 (“‘[I]t may not always be clear that a so-called preference is in fact benign’” (quoting Bakke, supra, at 298 (opinion of Powell, J.))). Accepting JUSTICE BREYER’s approach would “do no more than move us from ‘separate but equal’ to ‘unequal but benign.’” Metro Broadcasting, supra, at 638 (KENNEDY, J., dissenting)."

One interesting point made in the dissent is that the school plans in question here are voluntarily attempting to desegregate. Breyer indicates that voluntary plans to achieve desegregation should be viewed with a different lens than laws involuntarily ordering segregation, as was the issue in Brown v. Board.

(Ironically, this same month, the U.S. Mint produced one of the most beautiful coins ever made. It is a silver coin depicting the Little Rock Central High School Desegregation. See here.)

My take on the situation is that the conservative justices have no patience for dividing Americans by race. In their minds, they are attempting to prevent America from becoming Yugoslavia 100 years from now. One of Justice Alito's quotes from a different case could summarize the majority's feelings: "It is a sordid business, this divvying us up by race.” The majority opinion forcefully points out that under the Seattle program, if a school was 30% Asian, 30% Hispanic, 10% African-American, and 30% Caucasian, this breakdown would not be sufficiently diverse. Justice Roberts' example implies that this is a different world than 1975.

The liberal justices, on the other hand, believe that in much of America, we are still segregated by race. A cursory glance at any BLS or Census statistics will show lower rates of net worth and home ownership in the African-American community than in any other community. Although not stated in the opinion, the liberal justices seem to imply that the only reason for such modern disparity is the legacy of slavery and unequal access to education. It is not mentioned in the opinion that most of the conservative justices worked or are from large cities that are more integrated than smaller cities in the South. In much of America, it is indeed true that not much has changed since 1975. On the other hand, Justice Thomas's opinion seems to carry more weight because he actually integrated schools, sometimes against the wishes of classmates and parents of other students. An unsung hero, Rev. John Brooks, was instrumental in Thomas's education, and an interview given to BusinessWeek provides the most insight I have seen about Thomas and his background. See here (3/12/07, interview & Rev. John E. Brooks).

While it may seem counterintuitive that Justice Thomas would side with Justice Roberts here, Thomas may believe that his personal experience actually supports the majority's arguments because there was no de jure segregation at the time, and as a result he was able to attend majority-white schools and receive a top-notch education. Thus, Thomas may view Seattle through the prism that he is not dealing with any law forcing segregation, and any rule classifying anyone based on race could very easily turn against him or another race in the future. Jim Crow, after all, was not that long ago.

Perhaps an economic analysis would be helpful in understanding the majority opinion. Schools receive much of their funding from local property taxes. Housing values closely correlate with local school quality, as parents are willing to spend more money to buy into a better school district. See The New Economics of the Middle Class: Why Making Ends Meet Has Gotten Harder, by Elizabeth Warren and Leo Gottlieb:

Failing public schools have an impact on the children trapped in them, but they also impose a terrible burden on the families struggling to escape them. Failing public schools translate directly into higher housing costs for middle class families as they try to escape those schools. Home prices have grown across the board (particularly in larger urban areas), but the brunt of the price increases has fallen on families with children. The home value for the average childless couple increased by 58 percent between 1984 and 2004—an impressive rise in less just twenty years. (Again, these and all other figures are adjusted for inflation.) For married couples with children, however, housing prices shot up 145 percent during this period—nearly three times faster.

The Seattle parents were paying lots of money in mortgage payments and local taxes and were being told that some of their kids would have to go to an inferior quality school as part of a greater good. The students benefiting from the Seattle program would be students who, but for the program, would have to go to poorly funded schools. The students from poorer school districts would probably come from families that did not pay as much money in taxes or who lived in apartments (thereby not paying property taxes). Thus, the Seattle program indirectly charged parents who paid more in taxes more money for an inferior product while gifting parents who paid fewer taxes with a better product. In California, we had a lawsuit that argued that property taxes should go to the state rather than the county and then distributed among school districts in amounts to prevent inequality. I am unclear how Washington or Kentucky, the other state affected by the opinion, distributes its property taxes. The opinion did not discuss anything about vouchers, either. It remains to be seen what impact the opinion will have on voucher advocacy movements.

For now, in a time in America when we have ample resources and the economic "pie" is large, the Seattle decision will not create massive problems in the near term. The question is how we will view the decision if a sustained recession occurs, bringing to light the economic inequality in America that oftentimes can be categorized by race. A middle ground post-Seattle might be to balance schools by income, thereby avoiding any legal review or analysis. Federal courts do not usually get involved in a state's local affairs absent some illegal activity or protected class, and rich/poor is a category that is not illegal nor protected. America spends 400 billion dollars a year on schools, according to Revolutionary Wealth by Alvin Toffler. With that much money, perhaps the "pie" is still big enough to focus on economic rather than judicial solutions to improve school quality.

Gandhi, Revisited

One interesting aspect of living in Santa Clara County, where around 37.5% of residents are immigrants, is that I get to hear about history from people who've experienced it firsthand. Today, my clients, who were Sikhs, told me that although Gandhi received much of the credit for liberating India from Britain, there were actually civilian militias that fought against the British for independence. This was not discussed in the 1983 film, but my clients lived about 30 km from the site of the scene of the massacre depicted in the film, where thousands of unarmed Indians were shot dead by a British firing squad. It appears that many men of peace have been aided indirectly by armed defenders who cannot be recognized.

I also learned that the Sikh philosophy contains much of the Hindu philosophy, but with the difference that the Sikhs believe in one God, not several. Another interesting tidbit is that the Sikhs are also known as brave warriors who fought valiantly in several wars, including in WWII.

Hamiltonian Capitalism

A TV special on Alexander Hamilton from PBS's American Experience taught me more about why America is so successful. We all know America has created incredible stability in just 200 years, and regardless of where America stands 200 years from now, if other countries also achieve affluence, it will be through copying America's economic system. In actuality, what people will be doing is copying Hamilton's vision. One of the best quotes from the PBS special was that although Lincoln, Jefferson, and FDR have monuments in D.C., no monument exists for Hamilton. The scholar says that is fine: modern America is Hamilton's monument.

Hamilton fought for a national banking system against Jefferson's agrarian vision, was born in the West Indies to an unmarried mother, received only some books as an inheritance, and worked as an accountant as a teenager and as a lawyer afterwards. Understanding the U.S. as Hamilton's country opens our eyes to exactly why modern America works. One, Hamilton wasn't part of "the club." In fact, without George Washington's interventions on his behalf, he may have never been of any consequence. Because Hamilton had to work for a living, he created a system where anyone--even the bastard immigrant child of a single mother such as himself--could live in stability.

Hamilton, as a teenager, saw slaves being treated very poorly in the West Indies. As a result, the quasi-documentary insinuates that while Jefferson seemed comfortable owning slaves, the lesson Hamilton learned from slavery is that mankind's passions had to be corralled. Thus, one goal of Hamiltonian capitalism is to reduce and control men's passions through a system that includes protection of property; rewards for delayed self-gratification; strict enforcement of contracts; and when all else fails, imprisonment. Such a system, by encouraging materialism and hard work, forces people to think locally and have a vested stake in local rather than non-profitable or international events. In fact, some might say capitalism works precisely because it causes an investment in local matters. The average person's day is spent on bosses to placate, work to be done, debt to pay off, television to watch, kids to feed, and bills to be paid. There is no time, or it is not profitable, to think of solving larger issues that one cannot affect. The upside of capitalism's gimlet eye is that it forces us to live in the here and now; the downside is that it works too well--apparently, only 10 to 21% of Americans own passports. I am a huge fan of Jefferson--no one can match his passionate defense of the individual--but seeing this PBS special made me think more about Jefferson's vision versus Hamilton's vision for America, with the conclusion being that Hamilton's vision created modern-day America, while Jefferson's vision would have created an economy similar to modern-day China.

An interesting link:

http://www.pbs.org/nights/blog/2007/05/
american_experience_alexander.html

Africa

The July 2007 issue of Vanity Fair focuses on Africa and U2's Bono is the guest editor. The magazine has around fifteen different and eye-catching covers with various personalities, including one with Warren Buffet. The magazine features interviews with Jeffrey Sachs and Desmond Tutu (who is interviewed by Brad Pitt), and a picture of the real star of Tsotsi, Terry Pheto.

While Bono, Clooney, and others have attempted to interest the world in Africa's plight, the only nation that really seems to want to be serious about engaging with Africa on a long term basis is China. The China-Africa partnership is not an exercise in altruism: China needs natural resources; Africa has them; and you don't need to be Sherlock to see that China is acting in its self-interest. Other countries also contribute aid, but the magazine points out that America spends only 0.17% of our budget on aid (the U.N. goal is 0.7%). For those of us who argue that money will make no difference in a corrupt Africa, Mr. Sachs argues that the money given has not been enough. He contends that we could solve the problem with 20 billion dollars and that the aid given thus far has worked but is not sufficient to create any sustained change. He compares detractors' arguments against aid to fighting a wildfire with a hose, and when the water runs out from the hose, claiming that water does not cure fires because the fire still rages.

There are several issues with attempting to solve world poverty. On the surface, it appears that we could, acting in concert, feed all the world's hungry. We certainly make enough food and can transport it anywhere. For example, I am drinking water imported from Iceland that I bought with a coupon from Walgreen's for one dollar. If I, an average Californian resident, can get Icelandic water for one dollar (admittedly, the cost is half of what at least a billion people earn every day), it seems that affluent nations should be able to eliminate diseases that come from contaminated water. However, affluent nations have mostly capitalistic systems, with the exception of possibly Scandinavian countries. As a result, transferring large amounts of tax revenue from one country to another without receiving something in return is generally not feasible. Many Americans would probably chafe if 1% of our GDP is spent on international aid during a time of internal crisis, such as Katrina.

Having said all that, one quote caught my eye: a person interviewed said that Africans must become self-reliant to avoid a situation where Africa becomes the "white man's burden." It is a stunning reminder that just a few of the world's nations control most of the world's wealth. Although millionaires are newly minted in India and China on a weekly basis, most of the world's money is probably still in Dubai, New York, the U.K., Switzerland, Hong Kong, Tokyo, and Singapore. As a result, one possible reason for inertia is the mere fact that most citizens from these "monied" nations lack a firm connection with poor nations such as Africa or Bangladesh. Still, pointing to an absence of shared race appears to be a simplistic answer, especially in an age where we are mixing together culturally and biologically.

One of the prevalent themes in the magazine was the appeal to shared humanity. Minister Tutu went so far as to say that a person who is completely self-sufficient is sub-human. Maya Angelou more eloquently stated that she takes an interest in all human beings because she is a human being and therefore no human being can be alien to her. The point being made is as follows: "Let him who expects one class of society to prosper in the highest degree, while the other is in distress, try whether one side of the face can smile while the other is pinched." But one of the surprising elements of the 21st century is how easily affluent people can wall themselves off from the impoverished without consequence. (For those who point to 9/11 as one counterargument, the attackers were actually affluent and educated.)

Indeed, the world is becoming more stratified, not less, as money flows more rapidly. The rich can, if they choose, congregate only in particular neighborhoods; go to private schools; and get plush jobs through connections. Part of this de facto segregation is because wealth is becoming more earned than inherited, and people who make lots of money tend to work with affluent, educated people. Another part of it might be inertia: if you are raised with golf and tennis lessons, you may be perfectly happy spending your free time doing those activities at the local country club during your free time.

In any case, it is becoming obvious that people can become rich and stay comfortably rich without ever assisting or coming into contact with the poor. The inequality is even apparent in the retail sector: Neiman Marcus and Tiffany's are doing better than ever, while companies attempting to cater to the middle class, like JC Penny, Mervyn's, and Sears, are having trouble. So the 21st century is the age of inequality and yet also an incredible time to be alive if one lives in a first-world country.

Given our modern acceptance of financial stratification, moral arguments about equality and all of us being human may not be effective in an era where capitalism requires most of us to focus on local and profitable events; where most wealth is earned, making it difficult to argue that wealth should be shared because it is a matter of luck; and where religion is waning as a source of persuasion. So the 20 billion dollar question remains: how do we connect up the poor with the resources necessary to allow them to prosper?

One solution could be that Africa could organize its own OPEC. It certainly has enough natural resources to do this, and if it does not, it may be beholden to China for the next century rather than becoming self-sufficient. (Though this may not be a bad thing: http://www.csmonitor.com/2007/0627/p01s05-woaf.html)

A second solution could be to adopt the Saudi Arabian model: the Americans helped the Saudis find and remove oil, but after a certain period of time, the companies reverted to local control. Thereafter, the Saudis exchanged resources for technology and infrastructure and now are investing in non-traditional vehicles such as hedge funds. Today, there are few poor Saudi citizens.

Beyond those suggestions, I have no solutions about how to bring Africa--20% of the world population--out of poverty. Africa has great human capital--many Africans speak several languages, which will assist them in an increasingly global economy. Major cities, like Nairobi, are relatively affluent--my friend tells me everyone there has cell phones--while smaller cities lack basic water and food supplies. In the end, perhaps Bono is doing the most anyone can do: raise money and awareness, and let the Africans develop their own pace of progress. In the meantime, I will keep contributing to www.kiva.org

Gandhi, played by Kingsley

I just watched Kingsley play Gandhi. I wanted to write my impressions of the film, but after perusing the Wiki entry on Gandhi, I would like to copy some portions that stand out:

1. Gandhi always approached an end indirectly. For example, to get women involved in the movement and excise radicals, "Gandhi exhorted Indian men and women, rich or poor, to spend time each day spinning khadi in support of the independence movement. This was a strategy to inculcate discipline and dedication to weed out the unwilling and ambitious, and to include women in the movement at a time when many thought that such activities were not respectable activities for women."

2. Gandhi would fast when violence broke out. He seemed to realize humanity's passions had to be redirected into other sources of energy and perhaps there is something in human nature that causes us to become calm when presented with someone willing to be strong and absorb our bad energy. For the first time, I understand the presence of energy in New Age doctrines. One of his best lines, in response to a comment that passive resistance would not work, was that he had never advocated anything passive--he had always encouraged active noncooperation.

3. Still, I see some potential problems with Gandhi's philosophy.

One, had Gandhi been lesser known and not a public figure, his strategies may not have worked. The media needs to be sympathetic to his cause for it to succeed. In this case, if there is no one around to hear a tree fall in the forest, it really makes no sound. So what choices do average, non-famous people have when they are attacked? This is a difficult question, especially because we know that one of the reasons India is now able to move forward and perhaps resume its status as an empire is in no small part to Gandhi's vision. Yet, if the media portrays a subjugated people or a minority as violent, individual peacemakers could become ineffective. Thus, non-cooperation and non-violence seem to require a media that is both fair as well as sympathetic to peaceful non-cooperation, but any attempt to control the media and make it "fair" usually leads to oppressive dictatorships.

Two, Gandhi was presented with good numbers. 150,000 British ruling over millions of Indians. Without scores of people to continue to sacrifice themselves, nonviolence would be too short-lived to impact an oppressor's conscience. So what does a smaller minority do, such as the Jews in Germany during the 1940's or the Muslim Bosnians against Serbia in the 1990's? (Note: another thought-provoking film is No Man's Land (2001), about Bosnians and Serbs.)

Three, the British were clearly behaving improperly, at one point massacring thousands of unarmed protesters. Evil has evolved. Very few modern oppressors would openly behave like Southern governments in 1950's America and allow the media to have a field day. Also, there is no need for high pressure fire-hoses today. A government can simply fire a missile and wipe out an entire group, perhaps thousands of non-cooperating citizens. There would be no face-to-face contact that would engender an awakening of conscience. As Stalin said, "One death is a tragedy; thousands of deaths, a statistic." Today, for example, if 100 Tweedledees decide to close off an area, prevent reporters from entering, shoot missiles and kill 100 protesting Tweedledums in the process, and then clean up the area before allowing re-entry, non-cooperation would result in non-existence. Therefore, it appears that with technology wedging distance amongst peoples--whether by a selective media or by allowing video-game violence--non-cooperation may result in an oppressor being able to eliminate any attempt to shame him. Thus, non-cooperation requires a strong media and a citizenry with enough free time to see what is happening to feel ashamed and to do something. In an increasingly busy world, where people are shielded even from local acts of violence, or work twelve hour days to make mortgage payments, a strong middle class or, counter-intuitively, a majority of poor or persecuted people, seems required for Gandhi's ideas to work.

Spike Lee's portrayal of Mookie and whether he did the right thing in provoking violence ended with two quotes from Malcolm X and Martin Luther King. I will end with one of my favorite quotes by Gandhi:

"When I despair, I remember that all through history the way of truth and love has always won. There have been tyrants and murderers and for a time they seem invincible, but in the end, they always fall — think of it, always."

Khufu's Wisdom, by Mahfouz

Naguib Mahfouz is known as one of the preeminent modern writers, but his first novel was written at the very young age of 27. As a result, Khufu's Wisdom reads more like a screenplay than a true novel. The story revolves around several characters, primarily a pharaoh attempting to avoid being replaced. As in much of Middle Eastern literature (Hebrew saying: "Man plans, God laughs"), a battle between the Fates and humanity begins, with the pharaoh attempting to avoid his fate only to see that his own actions, without his knowledge, lead to fate having its way.

My primary issue with the novel is its disjointed style. Even so, I can see why the author eventually won the Nobel Prize--check out this beautiful passage:

Sennefer yawned again, then closed his eyes. Djedef stared at him in the feeble lamplight with eyes clouded by misery. When he was sure that Sennefer had surrendered to sleep, he moaned to himself in torment. Shunning his bed and feeling an intense unrest, he grew weary, and tiptoed out of the room. The air was moist, with a chilling breeze, and the night black as pitch. In the darkness, the date palms looked like slumbering ghosts, or souls whose tortures stretched through eternity.

In many other places, however, the writing seems perfect for a Frank Miller movie: "May the Divine Ra, Shaper of the Universe and Creator of life, bless you...[but] the Fates are making mock as is their wont and have conjured a male child." And, "Are you truly the majestic princess? Be a simple peasant girl--for a peasant girl lost is nearer to the heart than a princess found."

I have not read any of Mahfouz's other books, but I would recommend reading something else. Khufu's Wisdom was Mahfouz's first step on the path of greatness, but shows him in his unpolished glory.

Warren Buffett and Berkshire Hathaway's Meeting

My last two posts were about shareholder meetings and heroes. They provide the perfect segue into my hero, Warren Buffet, and my experience at the Berkshire Hathaway meeting in Omaha, Nebraska in 2007. I chose to attend the meeting for several reasons, primarily because I was not sure whether my future schedule would allow me to take several days off, and to a lesser extent, whether Mr. Buffett would still be around in the next few years. Also, I have never been to the Midwest, except for Chicago, so I was looking forward to this trip.

First, if you plan to go to the meeting, plan early. All the hotels were booked almost seven months in advance, and I was lucky to get a great deal on priceline.com for the Comfort Inn at the Zoo. The location is far from some of the events, such as Gorat's and Borsheim's, but I did not rent a car and relied on the kindness of strangers, including a chance meeting with a Reuters reporter, to get me to various places. (He was very friendly, an ex-lawyer, and seemed to lament the fact that Bloomberg had sent several more reporters with more resources.) As almost everyone there was friendly, I had no problem getting around, but I do suggest renting a car if you go. Omaha, NE is spread out because they have such a low population density and lots of open space. As a result of this land affluence, the city planners could afford to build with disregard to future growth, creating sprawl. Taxis are extremely expensive because of limited competition and also the numerous highways they have to enter to get from one place to another. So even though Point A and Point B are literally one mile away from each other, sometimes you have to take two highways to get there. For a city slicker like myself, used to being able to walk anywhere or take public transportation in Singapore, Boston, San Jose, and D.C., it was a shock to see so much land and so much sprawl.

Other than renting a car, my second tip is to bring a raincoat. Spontaneous thunderstorms are not uncommon in Omaha, and its location smack in the middle of the country creates interesting weather. One day, lightning was so bad, closing the blinds at night made no difference in terms of ambiance. (Apparently, you can tell how close a storm is by counting seconds between thunder and lightning, and had I known that at the time, it would have added to the "Friday the 13th" weather atmosphere.) I (mistakenly) brought plenty of warm clothing, but Omaha is humid in May. So bring a light raincoat and some jeans, and you will be all set.

The first day I arrived at Omaha's main airport, I was happy to be there. Numerous people were there from all over the world, and I chatted up people from South Africa to San Francisco. One tip is to take the Hilton Omaha shuttle from the airport because you will be much closer to the city center and your hotel. The Hilton Omaha employees were so nice, they allowed me to take the shuttle from their hotel to my hotel at the Comfort Inn. (The Midwestern kindness is no lie.) If you have a decent-sized budget, the newer Hilton Omaha is the best hotel. It is right next to the Convention Center where the meeting is held, and its shuttles will also take you to various Berkshire events, such as sale day at the Furniture Mart (which is massive and sells much more than just furniture, including cameras, laptops, etc.). Another Hilton is a few blocks away and has a great restaurant that serves wonderful steak. This brings me to the best tip about Omaha. Have steak, more steak, and when you're done, top it off with a porterhouse steak. Gorat's Steakhouse is the most famous restaurant in Omaha due to Mr. Buffett's frequent visits, but the Hilton restaurants serve some mighty fine steak also. The only other place I had better steak was Michael Jordan's Steakhouse at NY's Grand Central station, but that's another story. (Just imagine two college students looking at the menu and trying to decide how to eat and not take out a small loan--and the bathroom had an attendant, which I had never seen before. It was all worth it, by the way.) So again, order the steak.

When I landed in Omaha, NE, I realized that I did not have my pass. Each shareholder is entitled to four passes/tickets. For most shareholder meetings, simply bringing the proxy is sufficient. Not so for this event. Here, you have to send back a small document asking for a pass when you get the proxy in the mail. If you do not do this, you can go the Convention Center the Friday before the meeting and get a pass. (I found this out after almost suffering a heart attack on Thursday, the night before I was to board the plane and saw an unusually colored paper sticking out of the annual report.) Everything worked out, and the staff was very friendly. The key point is that if you are a shareholder, you can bring three guests (at least in 2007).

I am still giddy about the visit, and there is much more to tell, but I will save the stories for another day. I shook Warren Buffett's hand, which was my last goal on my list of things to do before I turned 30. Yup, I am still giddy.