Archive for the ‘Law’ Category

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Political Monday – Guns, Driving and Our Rights

January 28, 2013

freecopyofusconstitutionI posted a couple of years ago something regarding gun ownership and the Second Amendment(click here to read). Here are some follow on thoughts:

OK, I admit it, the NRA is right, guns do not kill people, people kill people. Of course, you might at well say cars do not cause road fatalities, people cause road fatalities and accept that as true too. Let’s do that, let’s accept they are equally true and treat them as equals. Here are some of the points being considered recently on just how we make them equal:

You want to drive a car, you have to pass a written test. 
    How about passing a written test to own a gun? 
You want to drive a car, you have to pass a driving proficiency 
road test. 
    How about passing a shooting proficiency shooting range test?
You want to drive a car, you have to carry liability insurance.
    How about carrying liability insurance to use a gun?
You want to drive a car, you follow the rules of the road.
    How about setting the same sort of rule structure for responsible 
    gun ownership?
You want to drive anything other than a basic car, you must have 
a special license, CDL & motorcycle, for example.
    How about having special licenses for specialized weapons 
    like assault rifles?

We all know driving and gun ownership are not the same thing. Cars and guns serve very different purposes in our lives, but both carry risks and both enjoy some level of legal protection. Wile the right to drive is one of our unenumerated rights, gun ownership is written directly into our Constitution.

In fact, the Supreme Court decided gun ownership is a fundamental right, but that does not mean there are no rules regarding guns. After all, we do not treat

1920s Machinegun Ad

1920s machine-gun Ad

owning a Thomson sub-machine gun the same as owning a Remington Model 870 Wingmaster. There was a time when they were treated the same. Hell, back then you could buy the Thompson as easy as you could a BB-gun. It was decided that allowing automatic weapons in the general population was simply too dangerous, so we modified our fundamental right to own a gun with some rules.

That is not to say you cannot own machine gun now, you can. All you have to do is obtain the pertinent federal license and follow the special rules that come with owning a weapon like a machine gun. In other words, to exorcise the fundamental right to own a machine gun, you must exorcise the fundamental responsibilities that come with it.

Regulating driving a car aids in safe driving and promotes another fundamental right – to live. Regulating gun ownership is no different on that point. We recognize the differences between driving an 18-wheel semi tractor-trailer and a Toyota Prius by having regulations for each. All I ask is for gun ownership to be treated the same way. Does anyone really think owning weapons capable of killing dozens of fellow citizens in a minute is any less dangerous than a Tommy-gun?

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The Murder of Trayvon Martin

March 22, 2012

Some events we read about in the news are hard to understand.  Other events seem to be stupidly obvious.  While the events that lead to the death of Trayvon Martin in Florida may seem to be in the former, I assure you, they fall firmly in the latter.

To understand the sad events that lead to this young man’s death, we need look no further than personal choice.  It is not the choices of Trayvon or the Martin family we need question.  No, it is the choices made by George Zimmerman that we must examine.  Further, it is choices of a police department that continues to bury its head in the sand and a state that passes laws that stand in the way of justice.

First let me deal with the issue of not looking at Trayvon’s actions.  This young man walked to the store, then tried to walked home.  How dare him!  He did not steal, he did not accost, he simple went to the store, bought some Skittles, and was walking home.  He made no questionable choice at all.  His life ended due to the choices of others.

George Zimmerman, on the other hand, made all sorts of questionable choices.  The most obvious being:

  1. He chose to be part of a neighborhood watch program that is neither organized nor registered by the local police.  Makes me wonder if he was really part of a group at all.
  2. He chose to arm himself with a concealed weapon while on Neighborhood Watch.
  3. He chose to follow Trayvon, both in his car and on foot.  In other words, Zimmerman created the situation that lead to Trayvon’s death.
  4. He though being African-American made Trayvon “suspicious.”
  5. He ignored the police dispatcher’s instructions not to follow Trayvon.
  6. He confronted Trayvon; neighborhood watch is a “watch and report” organization.
  7. He shot and killed an unarmed teenaged young man that he outweighed by about 100 pounds.

There are many more bad choices George Zimmerman made but how many do we need to see before we understand the bigoted truth of his nature?

The state government, as well as the Stanford Police Department have choices they need to answer for too.  For the state, the choice to pass their “no retreat” law, which seems to be the basis for Zimmerman’s limp defense, needs to be questioned.   At the very least they need to explain why this young man’s death can be justified by such a law.  Of course, the truth of it is they cannot, their simply is no justification.  What is the claim, he was justified because Trayvon was armed with a dangerous pack of Skittles?  He was carried Skittles for crying out loud!  Just how dangerous could he have possibly been?

As for the Stanford police Department, it is their choices before and after the killing of Trayvon that need review.  Here are just a few of their questionable choices:

  1. They took Zimmerman’s word rather than properly investigate.  They failed to take into account prior reports by neighbors about Zimmerman’s aggressive behavior.
  2. They coerced witnesses to change their account of events.
  3. They allowed an investigator with a history of ignoring violence against African-Americans to lead the investigation.
  4. They did not test Zimmerman for drugs or alcohol after the shooting.
  5. They failed to take into account Zimmerman called 911 over 40 times since January of 2011.

There are many more for the police department too, but again, how many do we need to see before we understand they failed to properly handle this case?

This is not a pleasant topic.  It is not something I wish to write about.  Still, it must be written about.  It must be addressed.  What is my discomfort compared to the loss the Martin family is dealing with?  What is your discomfort in me forcing you to think about it?

We may not be able to lessen that loss but we can see they receive justice for a son being taken from them.  Look, let me stop all the niceties and be bunt, in my opinion Zimmerman executed this young man and he must account for it.  As sad as this is, the actions of the police department’s failure to see this for that it is, a murder, further plunges the family into despair.  It further violates them.   Florida has laws that allowed this moron to carry a concealed weapon, then claim self-defense.  He used that weapon to murder.  It was his choice to do so.  Let us choose to make him pay for it.  The police department chose not to do their jobs; they should pay for that too.

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The Reasoning Behind the Second Amendment

February 22, 2011

A lack of understanding our national history leads to erroneous debate surrounding the Second Amendment to the Constitution of the United States.  Only by pealing back time does the correct view of its meaning take place.  Regardless of how loudly either side in the argument (gun ownership rights vs. banning guns all together) screams, the Second Amendment’s meaning is what it was back in 1791, when the States ratified the Bill of Rights.

Without question, the twenty-seven words of the Second Amendment are some of the most debated in American History.  In retrospect, one may wonder why our Founding Fathers constructed an amendment with such an ambiguous meaning, but that is the point – it is not ambiguous.  The text of the amendment reads, “A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.[1]”  In reading the amendment, if taken in the context of 1791, its meaning is clear.

Starting at the beginning, in May of 1607, England established its first permanent settlement in North America, Jamestown[2].  From then until February 1912, with the statehood of Arizona, the colonies and Untied States, as a nation, had frontier territory contained within its boarders.  Taking Alaska and Hawaii into account, the date moves to 1959.   The term frontier implies a certain wildness and untamed nature.  Even after statehood, vast areas within newly formed states remained untamed for years.

Since Jamestown, and through the implementation of Manifest Destiny, the areas of America’s frontier changed, changing the needs of the citizens along with it.  For instance, 1881 Washington, DC has more in common with today’s metropolitan areas than it did with the Western frontier town of Fort Sumner, New Mexico of its day.  Two notable killings took place that year, one carried out by a county sheriff and his posse (a type of temporary militia used at the county and town level) the other,carried out by a lone gunman.

The sheriff’s situation is well-known.  He was Pat Garrett and his posse (the number of men in posse is hotly debated) hunted down Billy the Kid in Fort Sumner[3].  Washington’s lone gunman has less notoriety, his name: Charles Guiteau.  Guiteau surrendered to Washington police who arrested him for the assassination of President James Garfield[4].  The point is, in the West, militias (posses) were commonly employed to answer specific needs while Washington counted on a police force.  As settled areas become stable, and communities grow, the dangers faced by its citizens change.  In Washington the need for a ready response of arms was no longer required, while in Fort Sumner existence itself depended on it.

In respect to the Second Amendment, it is the dangerous nature of frontier land, which promoted the need of local militia.  As settlements grew, displaced groups, like Native American, took exception to loosing land they lived on for years, if not centuries.  Moreover, settlers gave little notice to treaties with tribal governments or boundaries of native lands, making hostilities inevitable.

Before the American Revolution, the overall duty to protect citizens fell to the British Army.  The size of the colonies made protection impossible.  With its vast territory and over 3,000 miles distance from England, the American Colonies presented the British Army with a very large logistics problem.  The Army’s primary concern was holding off encroachment of other nations, like France and Spain, into areas England claimed.  This left far-flung settlements at the mercy of angry Native-Americans, as well as raiding parties of the other nations.  Raising local militia solved the immediate assistance issue.

At the outbreak of hostilities, a settlement’s government called out their militia.  The unit was expected to meet the particular event and resolve it, or at least hold out until regular army troops arrived.  It was a system of mutual benefit to the Crown Government as well as the colonists.

The most famous militia organization was the Massachusetts Minutemen.  The romantic view of this militia is farmers grabbing their guns and running to fight when called upon by the likes of Paul Revere.  In truth, the Minutemen were a formal militia unit given a charter by the Massachusetts Provencal Congress in 1774[5].  Every community supplied men for their local militia similar to the Minutemen, but all were under the control of some sort of civilian authority and not a rabble with bad intent.

Some of the same militia units employed in support of regular British Army units before the American Revolution, later supported, if not enrolled in whole in the Continental Army under General George Washington.  In fact, General Washington’s first experience in military affairs was as adjutant in charge of Virginia’s Southern District Militia.  In this role, Washington inspected, mustered, and regulated the various companies of men.  He later led Virginia’s Militia into the Ohio River region and briefly fought regular French troops and their Algonquin allies in the engagement that began the French-Indian War[6].

After America’s independence from Great Britain, the new federal army faced the same logistical issues suffered by the British before them.  Again, local militias formed to meet the need.  Again, the various governments authorized and organized militia under local authority.

One such organized unit was the First Regiment of the Chatham County Mailias, which served the Savannah, Georgia region.  Shortly after the war in 1786, a group of runaway slaves, which fought with the British “refused to return to the service of their owners,” as a history of the time put it[7].  No right-minded person could possible blame them.  This group marauded and waylaid traffic along the Savannah River.  Numbering over thee-hundred armed men, they were more than the normal civil authority (the county sheriff) could remotely handle.  The First Regiment Militia, assisting regular army troops stationed at Beaufort, SC. routed the men from their encampment in the swamps along Bear Creek and restored order.  As a side note, any society that chooses to enslave a large portion of its population is well advised to keep a sizable militia handy.

In the end, during our initial development as a nation, individual states required the militia to maintain order.  Rather than a position of sinecure, militia served, earned their pay (or received no pay at all) and often died in the process.  It was left to the federal government to maintain a national army and to the states to maintain a self-policing force the national army called upon from time to time.  That is what the Second Amendment is about, the ability of the individual states to maintain civil order and assist in national times of need.  Standing armies are costly.  Avoiding that level of public debt, states organized militia groups.

While gun advocates point to the Second Amendment and claim the right of gun ownership, the Amendment does not interfere with each individual state’s ability to regulate the practice.  In truth, it does not even require a state to allow gun ownership.  It simply prevents the federal government from outlawing it.  Unlike the First Amendment, the Second does not enumerate several different rights; it limits the authority of the federal government to interfere with individual states and citizens protecting themselves.

One reason militia worked before and not now – the large variety of weapons available.  Until the time of the Civil War, a man with a musket only needed a few pieces of flint, some bulk lead, and a supply of gunpowder.  With the limited caliber of muskets, casting of balls was a simple process handled in the field camp; many men carried their own casts simplifying matters further.  With the invention of cartridge style ammunition, supplies of pre-manufactured bullets for each type of weapon are required.  Imagine the supply chain nightmare of supporting a unit in the field with a dozen or so different cartridges.  Simply put, no longer can a government expect to supply ammunition to citizens bringing their own weapon to a fight; the variety is overwhelming.

Today, the National Guard takes on the role the militias filled in years past.  They are a hybrid of militia groups and a standing army.  Fringe survivalist groups claim some tie-in to our historic militia groups, but they lack the charter and civil oversight to operate in the public interest.  In the end, they are a bunch of guys with guns that challenge the civil authority, not work to protect the population at large.  Mostly, the need to call men at a moments notice to man the parapets is gone.  Organized militias, as intended by the Second Amendment, are simply of no practical use today.

It is easy to get caught up in the rhetoric of organizations like the National Rifle Association and its focus on the later half of the amendment, the “right of the people to keep and bear Arms, shall not be infringed” portion.  What they fail to acknowledge is the role the states play or the “A well regulated Militia, being necessary to the security of a free State” portion.  Of course, the gun control fanatics are just as far off point, as the amendment does afford citizens the right to own a gun at the federal level and a state walks a fine line when they attempt to limit that right.

What both groups fail to understand is we do not live in 1791 anymore nor is our society some utopia where we sit around a campfire and sing Kumbayah.  Guns and gun related violence exist in our society today.  It is true statement that outlawing citizens from owning guns leaves only the criminals with gun.  It is equally true that improvements in firearm technology places in the hands of one individual the means to rapidly murder dozens of citizens.  The tragic events at Virginia Tech come to mind[8].

The Founding Fathers never intended our Constitution and the Bill of Rights to be static.  After two-hundred and twenty years of development, both in society and technology, it is about time we revisit the Second Amendment and modify it to reflect the times today.  Outlawing gun ownership is not any sort of answer, just as it’s not an answer to allow any nut with a diver’s license to own a bazooka.  What we really need is to address the issue respecting various points of view and craft a new amendment that will serve the United States over the next two-hundred and twenty years.

Follow Up Reading:

Here is another blog post expanding on the issues of rights and gun control: Guns, Driving and Our Rights

 


[1] “The Constitution of the United States of America,” Amendment 2. GPO Access Home Page. Web. 22 Feb. 2011. <http://www.gpoaccess.gov/constitution/html/amdt2.html>.

[2] “Jamestown Settlement.” Official Jamestown Settlement & Yorktown Victory Center Visitor’s Site. Web. 22 Feb. 2011. <http://www.historyisfun.org/jamestown-settlement.htm>.

[3] “Billy the Kid.” Wikipedia, the Free Encyclopedia. Web. 22 Feb. 2011. <http://en.wikipedia.org/wiki/Billy_the_Kid#Death>.

[4] “Charles J. Guiteau.” Wikipedia, the Free Encyclopedia. Web. 22 Feb. 2011. <http://en.wikipedia.org/wiki/Charles_Guiteau#Assassination_of_Garfield>.

[5] Microsoft Encarta Encyclopedia Standard: 2004, Redmond, WA: Microsoft Corporation.

[6] “The French and Indian War.” Antique Prints And Maps From The Philadelphia Print Shop. Web. 22 Feb. 2011. <http://www.philaprintshop.com/frchintx.html>.

[7] Charles Jones, Jr. The Life and Services of the Honorable Maj. Gen. Samuel Elbert (Cambridge: The Riverside Press, 1887), SUPPLAMENTAL NOTES, 47.

[8] June, Early. “Virginia Tech Massacre.” Wikipedia, the Free Encyclopedia. Web. 22 Feb. 2011.  <http://en.wikipedia.org/wiki/Virginia_Tech_massacre>.

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The Death of Senate Bill 987

December 23, 2010

In May of 2009, Illinois Senator Dick Durban introduced bill 987 to the Senate[i].  As bills go, it is relatively small, only ten pages, with an estimated cost of $108 million over the next five years.  While $108 million is nothing to scoff at, the all too common bills in the billion and trillion ranges dwarf it.  From its heft in paper and its cost, the bill is unremarkable.

What makes S-987 special is the contents of its mere ten pages.  The title alone illustrates its importance – “The International Protecting Girls by Preventing Child Marriage Act of 2010.”  While it is an awkward name, it simply defines what constitutes child marriage, states the United States is against the practice, requires the collecting a reporting on statistics regarding it, and requires the President to develop a policy in dealing with the international problems of child marriage and to discourage it.

Who could be against such a bill?  In fact, it is one of the rare, extremely rare, bills to receive unanimous support in the Senate.  Forty-two senators went so far as to co-sponsor the bill[ii].  Its passage in the house seemed a sure thing.  That is until Representative Ileana Ros-Lehtinen of Florida’s 18th District set her sights on its defeat.  In other words, Ileana Ros-Lehtinen is against such a bill.

An article by Josh Rogin in the Cable cites a letter Rep. Ros-Lehtinen circulated to her Republican colleagues urging them to vote against the bill based on cost[iii], something that every representative, not just the Republican ones, should take into consideration.  After all, with our current fiscal mess, can we afford $21.6 million a year, for the next five years, to prevent children married off before they are old enough to decide for themselves?  Every single senator thought so.  Even a majority of representatives agreed we could afford it.  Given that, it is truly remarkable the bill did not pass the House of Representatives.

Speaker of the House, Nancy Pelosi set the stage for defeat when she brought the bill to the House floor under a procedural maneuver known as “suspension of the rules.”  It basically prevents amendments to a particular bill but requires a 2/3 majority to pass.  It is normally used for issues like naming of a post office or federal building.  In the case of S-987, its use proved fatal.

Having lost her argument of cost, Rep. Ros-Lehtinen employed the sure-fire method of whipping up the GOP base, she claimed it will use federal money to pay for abortions; something the bill, prevented by law[iv], cannot do.  To put is another way, she lied.  The net effect of the lie was energizing the Pro-life right-wing of the Republican Party against supporting the bill.  They had enough votes to undermine the 2/3 majority required and effectively killed the bill.

A large portion of the blame for the bill’s defeat belongs to Speaker Pelosi.  Had she not played parliamentary tricks with the bill and allowed normal debate, the most likely outcome would have been the bill becoming law.  While there can be no excuse for Rep. Ros-Lehtinen’s lie, we can at least understand she resorted to it having been denied her say in the matter.

That last part is the real point.  We send people to Washington to do our bidding.  When the use of trickery and procedural posturing deny a member their say, a member will use trickery of their own in response.  That is the sad state of affairs in the U.S. Congress.  Rep. Ros-Lehtinen’s concerns needed exploration.  Given the number of fiscally conservative senators sponsoring the bill, answering the concerns of representatives should have been easy.  Instead, we now have a representative that is a liar and a leader in the House that bends the rules to deny rightful debate.

Unfortunately, there is little chance things will change when the new leadership takes over.  Given the polarization of the two dominate parties such posturing will only increase, leaving us with a government that is incapable of getting the simplest things done.  Belligerence in politics only produces short-term gains, never lasting results that serve the best interests of a nation.  That is the point that neither Speaker Pelosi or Rep. Ros-Lehtinen seem to understand.


[i] “Text of S.987 as Referred in House: International Protecting Girls by Preventing Child Marriage Act of 2010 -… OpenCongress.” OpenCongress – Track Bills, Votes, Senators, and Representatives in the U.S. Congress. Web. 23 Dec. 2010. <http://www.opencongress.org/bill/111-s987/text>.

[ii] “Bill Summary & Status – 111th Congress (2009 – 2010) – S.987.” THOMAS (Library of Congress). Web. 23 Dec. 2010. <http://thomas.loc.gov/cgi-bin/bdquery/z?d111:S.987:>.

[iii] Rogin, By Josh. “How Ileana Ros-Lehtinen Killed the Bill to Prevent Forced Child Marriages | The Cable.” The Cable | FOREIGN POLICY. Web. 23 Dec. 2010. <http://thecable.foreignpolicy.com/posts/2010/12/17/how_ileana_ros_lehtinen_killed_the_bill_to_prevent_forced_child_marriages>.

[iv] “USAID Health: Family Planning, Policy, Restrictions on Support for Abortions.” U.S. Agency for International Development. Web. 23 Dec. 2010. <http://www.usaid.gov/our_work/global_health/pop/restrictions.html>.

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Nothing Can Destroy A Government More Quickly…

October 2, 2010

As Justice Tom C. Clark said in Mapp V Ohio, “Nothing can destroy a government more quickly than its failure to observe its own laws[i].”  Of course, he was composing the majority opinion in the landmark case that forced individual states to exclude evidence obtained without a proper warrant.  His warning goes far beyond the reaches of the Fourth Amendment[ii].

Everyone, at some point, find themselves in a situation wondering, “How did I get here?”  It is easy to understand the consequences of a car wreck.  Understanding the way a child from a “good” family ends up a delinquent may not be so apparent.  We have to look to a series of events to truly understand the situation.  It is the later example that illustrates the danger the United States faces with our moves ever closer to the tipping point since Justice Clark’s observations back in 1961.

Over time, our freedoms, as citizens of the United States, have eroded.  With small steps, a government that seeks to control the population rather than lead it diminishes each freedom held sacred.  People often use the analogy of a pendulum swinging back and forth when talking about changes to our freedom.  In other words, laws restricting freedom are passed, then over time, changed to restore freedom.  This analogy is simplistic and misleading as restoring freedom always falls short of where it began.

A better analogy is a “rising bottom[iii]” trend (Figure 1).  Stock analysts us it to describe a company’s stock where the price is going up and down but the overall tend is up.  The lowest price of a particular swing is higher than the lowest price of the swing before.

In much the same way, our freedom swings from more restrictive to less restrictive and back again, but the overall tend is more restrictive.  The restrictiveness of our law is more restrictive than its change before.  Changes to the Fourth Amendment are prime examples of this theory.

Since its adoption with the Bill of Rights[iv] in 1789, the Fourth Amendment has received over sixty[v] reviews by the Supreme Court, most within the last one-hundred years.  It is understandable given criminals use it to try to get out of trouble and law enforcement pushes it to its limits trying to put criminals in prison.  On its face, that level of review might seem like a good thing, but in reality, it makes for an unsettled situation where nobody understands just what the right covers anymore.  Regardless, the overall trend is the cases limits the protection of every citizen and increases the power of state and federal governments to intrude in our lives.

For example, in Mapp v Ohio, the case overturned because the police failed to obtain a search warrant and simply intruded into the home.  Another case, United States v. Leon[vi], the court modified the ruling in Mapp saying the police can use evidence seized with an illegal or invalid search warrant, if they acted in good faith.  The key being what constitutes good faith.  In other words, if there is a mistake on a warrant or it is not specific enough, a judge can allow the evidence as long as the offices did not intend to violate the principles of the Fourth Amendment.  Sort of a “trust me, would I lie about it?” statement from the police.

While the Leon ruling does limit the protection granted in Mapp, the findings in the Arizona v. Evans (1995)[vii] and Herring v. United States (2009)[viii], in truth, blow it away.  The Evans case found if the police obtain a warrant based of false information retained in police records, the search is valid.  In Herring, the court further found if the police rely on false information provided by a different law enforcement agency a search is valid.  The net effect being the police can simply allow data to remain active, even when it is not true or accurate and then later rely on that false data to obtain a warrant.  In other words, it creates an atmosphere that encourages bad behavior by law enforcement with little or no recourse by citizens.

For about 130-years the Fourth Amendment went without challenge.  After that, the court muddled its meaning with weak and vague findings.  In 1961, in the Mapp case, the court again place clear definitions on the amendment’s meaning only to have later cases again whittle away at our individual protection, just like the raising bottom chart illustrates.  It is easy to side with the government and law enforcement as most of the people in these cases were trying to get away with some illegal activity.  To do so is a mistake; supporting the erosion of our Fourth Amendment protections allows the persecution of individuals without the proper oversight of courts or a grand jury.  Further, it allows and encourages an atmosphere of corruption within the various law enforcement agencies.

By no means is this action restricted to the Fourth Amendment.  Our freedom is under attack by the government our constitution seeks to limit.  The government takes our freedom in little bites we hardly notice and justify it with claims of national interest and serving the greater good.  We think of limitations, of the sort imposed after the terror attacks of 9/11, as temporary.  The government sees them as a windfall and will be hard pressed to ever return them to us.

This is exactly the point that Justice Clark tried to make.  You see, while the quote at the beginning is widely known, it leaves out most of the point Justice Clark intended.  Here it is in its entirety:

“Nothing can destroy a government more quickly than its failure to observe its own laws, or worse, its disregard of the charter of its own existence. As Mr. Justice Brandeis, dissenting, said in Olmstead v. United States, 277 U.S. 438, 485 (1928):

Our Government is the potent, the omnipresent teacher. For good or for ill, it teaches the whole people by its example. . .  If the Government becomes a lawbreaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy.[ix]

This is the danger we face today.  In a misguided effort to allow law enforcement to prosecute criminals, we encourage criminal behavior by law enforcement and give up our rights in the process.  The time to stem the flow is now; waiting too long will lead to the anarchy Justice Brandies worried about.


[i] Mapp v. Ohio. Section V. Supreme Court. 19 June 1961. FindLaw. FindLaw, a Thomson Reuters Business. Web. 2 Oct. 2010. <http://laws.findlaw.com/us/367/643.html>.

[ii] “The Constitution of the United States,” Amendment 4, <http://www.archives.gov/exhibits/charters/bill_of_rights_transcript.html>

[iii] “Rising Bottom Definition.” Investopedia.com – Your Source For Investing Education. Web. 02 Oct. 2010. <http://www.investopedia.com/terms/r/risingbottom.asp>.

[iv] “Bill of Rights.” National Archives and Records Administration. Web. 02 Oct. 2010. <http://www.archives.gov/exhibits/charters/bill_of_rights.html>.

[v] “MediaWiki Talk:United States Constitution/Amendment Four.” Wikipedia, the Free Encyclopedia. Web. 02 Oct. 2010. <http://en.wikipedia.org/wiki/Fourth_Amendment_to_the_United_States_Constitution>.

[vi] “United States v. Leon.” LII | Legal Information Institute at Cornell Law School. 17 Jan. 1984. Web. 02 Oct. 2010. <http://www.law.cornell.edu/supct/html/historics/USSC_CR_0468_0897_ZX.html>.

[vii] “Arizona v. Evans, 514 U.S. 1 (1995).” LII | Legal Information Institute at Cornell Law School. 07 Dec. 1994. Web. 02 Oct. 2010. <http://www.law.cornell.edu/supct/html/93-1660.ZS.html>.

[viii] “Herring v. United States.” LII | Legal Information Institute at Cornell Law School. 07 Oct. 2008. Web. 02 Oct. 2010. <http://www.law.cornell.edu/supct/html/07-513.ZS.html>.

[ix] reference i

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Ever Heard of Externality – Oil Companies Have!

May 22, 2010

Unless you are an economics major, most likely you have never heard the term externality.  Regardless, it affects each of us every day in positive and negative ways.  In days gone by, its affects were serendipitous but today corporations go to great lengths to take advantage of externalities to the detriment of the public at large.

Just what is externality anyway?  Here is a standard definition: “An economic side-effect.  Externalities are costs or benefits arising from an economic activity that affect somebody other than the people engaged in the economic activity and are not reflected fully in prices[i].”  To better understand, here are some examples:

A positive externality:

You buy a home in a rundown neighborhood, fix the house, and clean up the yard.  Your efforts not only benefit you but your neighbors as well.  Your efforts, for them, are a positive externality as they enjoy the improved view and your efforts even increase their property value at no cost to them.

A negative externality:

The house you purchased and fixed up is on a lovely stream full of brook trout.  Two years after you move in, a manufacturer builds a facility 30 miles up-stream.  The solvent they dump into the stream goes unnoticed, unregulated, and pollute it.  All you know is the fish are gone and it smells bad.  You have the water tested and it’s full of sulfur and will cost you and your neighbors $100,000 to clean up.  Unless you can trace the pollution back to the company, you and your neighbors bear the cost of a problem created by another.

In the positive example, the actions of one benefit another; in the negative example, the actions of one harm another.  Individuals, corporations, and governments leverage externality.  In the case of individuals they simply may enjoy a benefit, a business might avoid a cost it should rightly pay, governments may demand social programs be financed by both corporations and individuals that receive no benefit from it.

The real problem with externality comes with not recognizing it for what it is.  This lack of understanding lends itself to abuse and corruption on a massive scale.  We need look no further than the Gulf of Mexico for a real-life example.  Even before stopping the leaking oil in the ongoing disaster, the corporation that owns the sunken Deepwater Horizon oilrig, Transocean Ltd (Transocean traces its roots to the Gulf of Mexico but now is headquartered in Geneva, Switzerland[ii]) filed a motion in Federal Court seeking to limit liability to just under $27 million.  An article posted on Law360’s website[iii] by Melissa Lipman gives the details as well as a link to the actual filing.

Transocean seeks to transfer the cost of the oil spill to British Petroleum (BP) and taxpayers in the United States.  In effect, making any additional costs an externality, an externality we must pay and they avoid.  By the way, the 1851 law Transocean sites limits ship owner’s liability to the value of a ship after its loss.  This makes them liable for the loss of cargo only.  Transocean claims the rig had about $27 million worth of crude oil on it when it sank.  If successful, Transocean will keep most of the $533 million[iv] of insurance money carried on the rig.

All the while, BP is relatively happy knowing federal law limits its liability to $75 million, unless they were negligent in maintaining federal safety standards.  BP still faces lawsuits filed in state courts but in the end, they too will avoid the total cost of the clean up effort by transferring much of it to the government and ultimately the American taxpayer.

Externality is the game corporations play to win.  Back in my engineering days, our motto to reduce repair costs was “make it someone else’s problem.”  It was very effective to say the least.  Corporations take this motto and run with it in every aspect of business.  They seek laws that push costs rightly bore by them to taxpayers.  Furthermore, they seek to have unrelated laws interpreted to reduce liability.  The Transocean filing is a perfect example.  They are attempting to use a law that limits a ship-owner’s liability concerning cargo to limit their liability regarding environmental damage of the product they pump out of the ground.

Corporations use the 14th amendment to the US Constitution to define themselves as a person but that does not give them the good judgment or morality that comes with sentience.  There is evidence to suggest if a real person acts like a corporation, society will deem him or her a psychopath[v] if measured by World Health standards.  While that may not be true for all corporations, it does explain much of the bad behavior the news covers almost daily.  Corporations cannot be trusted with environmental stewardship.  It is contrary to their primary purpose to maximize profits for their owners.  That is why we need sensible regulations that require businesses to correct the bad deeds and unintended consequences (giving them the benefit of the doubt) regardless of cost.

In the end, we need to prevent corporations from using calculated externality to shift costs they rightly should pay.  It is not a question of their particular product costing more because someone else’s will cost more to make up the difference.  Take businesses’ own axiom “there is no such thing as a free lunch.”  In this case, the big oil companies are eating the lunch but taxpayers are going to pick up the tab.


[i] The Economist Newspaper, Limited. “Economics A-Z.” Economist.com. Web. 22 May 2010. <http://www.economist.com/research/economics/alphabetic.cfm?letter=E>.

[ii] Transocean, Ltd. “Transocean :: Our History.” Transocean :: Home. Web. 22 May 2010. <http://www.deepwater.com/fw/main/Our-History-3.html>.

[iii] Lipman, Melissa. “Transocean Seeks To Cap Oil Spill Liability At $27M – Law360.” Law360 : The Newswire for Business Lawyers. Web. 22 May 2010. <http://www.law360.com/articles/168268>.

[iv] Kahn, Chris. “Transocean Cites 1851 Law to Limit Spill Liability – U.S. Business- Msnbc.com.” Breaking News, Weather, Business, Health, Entertainment, Sports, Politics, Travel, Science, Technology, Local, US & World News- Msnbc.com. Web. 22 May 2010. <http://www.msnbc.msn.com/id/37128693/ns/business-us_business/>.

[v] Hulu – The Corporation –  By Joel Bakan. http://www.Hulu.com. Web. 22 May 2010. <http://www.hulu.com/watch/118169/the-corporation?c=News-and-Information/Documentary-and-Biography>.

h1

The Lunatics Are Running Our Financial Asylum

May 10, 2010

Imagine you work for a big, a very big, company that makes the latest “what’s-it” everybody wants.  While you did not invent it, you did protect it and promote it and made it the thing everyone has to have.  In fact, the company rewarded you by making you the director of the what’s-it division.  Sales are through the roof and life is good.

Good that is until it is discovered the what’s-its fall apart quickly and have no real value.  Sales drop, the price drops, and investors pull out what little value their investments have by selling stock for a loss.  To make matters worse, it seems you hid critical data from shareholders that would have ended the project before the losses occurred.

What are the chances the company will promote you to senior vice-president in charge of quality control and oversight?  Ice has a better chance in hell.  Still, that is exactly what has happened with our financial system.  The people, the very same people that derailed our economy are now responsible for guiding its recovery.  For example, Treasury Secretary Timothy Geithner worked for former Treasury Secretary Robert Rubin who was the driving force that changed the rules for banking (the Glass-Steagall Act[i]) put in place after the Great Depression.

Recently as Secretary, Geithner complained in testimony to the House Committee on Financial Services the Federal Reserve “does not have any legal authority to set or enforce limits on risk taking by a large global financial firm.[ii]”  Of course, he neglected to point out he was part of Rubin’s team behind removing the Federal Reserve’s authority with the repeal of Glass-Steagall.

As if that was not bad enough, Secretary Geithner’s Chief of Staff is Mark Patterson.  According to his biographical information on the Treasury’s website, “Mr. Patterson was a Vice President at Goldman Sachs from 2004 to 2007, and a Managing Director from 2007 to April 2008[iii].”  Goldman Sachs is one of the companies currently under investigation by the Securities and Exchange Commission (SEC) for fraud[iv] and MR. Patterson was one of the men at its helm.  Will the SEC investigate the Treasury Secretary’s Chief of Staff?  How likely is there even to be a criminal investigation?

Next up is Gary Gensler, the Chairman of the Commodity Futures Trading Commission.  According to his biographical information, he was a partner at Goldman Sachs and worked for the firm for eighteen years[v].  Senior partners at Goldman Sacks must still have his cell phone on speed dial.

Another influential power broker on the administration’s payroll is Larry Summers.  Summers currently serves as Director of the National Economic Council as well as being one of President Obama’s closest advisors.  He served as Treasury Secretary from 1999 until 2001.  A recent article in the Washington Post details over $5 million in payments to Mr. Summers over the last year by a hedge fund and over $2.5 million in speaking fees from Wall Street Firms, Goldman Sacks paid him $135,000 for a single day’s work.[vi] In 2008.  If by chance it was an eight-hour day (not likely) that works out to an hourly wage of $16,875.00.  Maybe Goldman Sacks understood that if either of the Democratic candidates won the election, Mr. Summers was more than likely going to have a role to play. Did that have something to do with them paying him more than the median home price in Atlanta, Georgia[vii] just to make a speech?  Of course not!

It is by no means a one-way street as Goldman Sachs’ hiring of President Obama’s former White House counsel, Gregory Craig illustrates.  While no one can question Mr. Craig’s legal abilities, his knowledge of, and contacts within the administration and Democratic circles cannot be a negative regarding his retention as council.

Washington plays the ultimate game of one-upmanship.  During President Bush’s term in office, it was Vice-president Cheney’s close relationship with Halliburton that, at least, appeared to be a conflict of interest.  Now, in President Obama’s administration we see potential conflicts of interest in many departments and areas dealing with finance and specifically with Goldman Sacks.  Conservatives have every right to point this out as liberals raked them over the coals for the very same thing.  It is hypocritical, to say the least, for President Obama to fill his administration with these dupes and villains of Wall Street and claim they have no bias.

It seems Wall Street agrees with President Obama’s campaign slogan of “Yes We Can,” but adds something to it – “Yes we can!  We can rip-off America and get away with it.”  They obviously have the people in place to do just that.


[i] Banking Act of 1933 (1933).  Print.

[ii] “TG-646: Treasury Secretary Tim Geithner Opening Statement as Prepared for Delivery before the House Committee on Financial Services.” United States – Department of The Treasury – Homepage. Web. 10 May 2010. <http://www.ustreas.gov/press/releases/tg646.htm&gt;.

[iii] “U.S. Treasury – Mark A. Patterson – Chief of Staff to Secretary of the Treasury.” United States – Department of The Treasury – Homepage.  Web. 10 May 2010. <http://www.ustreas.gov/organization/bios/patterson-m.html&gt;.

[iv] “SEC Charges Goldman Sachs With Fraud in Structuring and Marketing of CDO Tied to Subprime Mortgages; 2010-59; April 16, 2010.” U.S. Securities and Exchange Commission (Home Page). Web. 10 May 2010. <http://www.sec.gov/news/press/2010/2010-59.htm&gt;.

[v] “Chairman Gary Gensler – CFTC.” U.S. Commodity Futures Trading Commission. Web. 10 May 2010. .

[vi] Rucker, Philip, and Joe Stephens. “White House Economics Aide Summers Discloses Income – Washingtonpost.com.” Washingtonpost.com – Nation, World, Technology and Washington Area News and Headlines. Web. 10 May 2010. <http://www.washingtonpost.com/wp-dyn/content/article/2009/04/03/AR2009040303732.html&gt;.

[vii] Real Estate Education, Information, Marketing Resources & Much More. Web. 10 May 2010. <http://www.realtor.org/wps/wcm/connect/a6c39a80420f5393a656eed140d385a7/rel09q4t.htm?MOD=AJPERES&CACHEID=a6c39a80420f5393a656eed140d385a7&gt;.

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