Friday, August 21, 2009
Posted by Jeff Lipshaw
I was reading the Wall Street Journal's Weekend Journal this morning, and the De Gustibus columnist, Eric Felten, waxes on about the USNWR ranking of universities and liberal arts colleges. I was struck by this observation early on: "However predictable the listing has become, and however arbitrary the methodology, U.S. News remains the standard arbiter of such things as whether Cornell is more prestigious than Johns Hopkins. (Last year it was Cornell, but this year it's Johns Hopkins, which slipped ahead to grab the coveted #14 slot.) No one takes such distinctions seriously—like an 89.7-point wine rating, college rankings are a vain attempt to give clear-cut answers to subjective questions."
The second part of this sentence is so obviously true, and the first part is so obviously false, at least in the world of lawyers and law schools, it gave me pause to reflect. Felten's take is that the rankings are really about getting ahead, and what going to Harvard or Princeton means if you want to end up writing comedy scripts in Hollywood or doing buy-out deals on Wall Street. I was prepared to mock this, but on further review, maybe there's something to it.
We had our "welcome back" faculty luncheon yesterday, and somehow I got on the subject of ambition with a colleague who is a career-long (and very successful) academic. This was to the effect (as to me) that you can take the boy out of the Type-A environment, but you can't take the Type-A out of the boy. That is, if I were the same chronological age as my faculty peers - at least in chronological seniority - being ambitious might well be the usual hallmark of starting a career, establishing one's place in the world, developing prestige and reputation, getting tenure, saving for the kids' college education, etc. - and thus not particularly remarkable. So when one is in one's second or third career, what does it mean to be ambitious?
Yes, I think the rankings do have something to do with our subjective views of getting ahead, and I do think there's something about the legal profession that makes OUR rankings so powerful. I used the phrase "progressing up the food chain" with my colleague, and in what industries or professions is the food chain as quantitative as the legal profession? I can still remember my first introduction to the National Law Journal Law Firm 100, sitting there in 1977 as a clueless 2L in an interview room at Stanford with a partner from Kelley, Drye & Warren telling me that this was "need-to-know" stuff as I was thinking about my career.
Here's my thesis. Felten is right in saying that nobody takes undergraduate rankings seriously because the relationship between getting ahead and one's undergraduate degree is fairly attenuated, except in rare cases. That appears to be the case, generally, with med schools as well. Our son just started med school at what would be considered an elite school, but the universal reaction among doctors was that where one went to med school simply didn't make a difference (one's residency may be a different matter). Business schools have their rankings, but MBAs and the companies who hire them don't seem quite as pathological as we do. There are thousands of undergraduate universities and colleges, and, for the latter, ranking is a mere bagatelle.
My observation, however, over 30 years of a career, is there's a lot of self-selection in the process of becoming a lawyer, and even more in becoming a big law firm lawyer or a law professor. I suspect the first element of that self-selection is a particular orientation to progressing up the food chain (says one who knows). There ain't that much to distinguish us; for all that we are white, black, Asian, Muslim, Jewish, whatever, we aren't all that diverse when we get too far below the derma. (I remember that being my instant reaction upon walking into the room at the first law firm partners meeting I attended after returning from five years in the business world.) There are only dozens and not thousands of law schools. Law firms (and even, I think, government agencies employing lawyers), at least compared to all forms of business organization, are relatively uniform in organizational structure. In other words, it's easy to see a well-defined food chain in the relatively small, homogeneous, and closed legal community.
Hence, as I was saying to my friend and colleague, having returned from our summer in Michigan, where I was productive in the way law professors should be productive over the summer, albeit in our lovely house in our lovely resort town, returning to my responsibilities over the academic year in a city (Boston) in which many would give their eyeteeth to live and work, doing a job (teaching) I love to do, and concluding that this particular life was (or should be) idyllic; nevertheless, I find myself having to confront from time to time my own visceral reactions to the food chain - that is, higher (whatever that means) is better than lower. And why, at my age and status in life, should I care? In the words of Pogo, perhaps "we have met the enemy and he is us."*
* Ten bonus points if you know why the picture is relevant.
Monday, August 3, 2009
...I'm just saying. And what is Liam Neeson trying to hide???
My father, who died two months ago today and will be missed greatly, never talked about World War II. He could not watch Saving Private Ryan. I was aware through relatives that part of his duties, for the Army Air Corps, was to clean up the concentration camps after Germany surrendered. The only hint I got of that, from him, was one day when we were watching some TV show and some Holocaust denier said it never happened. My dad told the TV, words he never used at any other time in my hearing, "Bullshit."
The Holocaust museum shooter, James von Brunn, had a website with two huge screed themes: the Holocaust is a lie, and Obama has never produced his "real" birth certificate. Said the NY Daily News, "It was unclear if something specific triggered his museum rampage - but the attack followed Obama's denunciation of Holocaust deniers."
Sometimes there are simply not two sides to facts. The Holocaust happened, and Obama is American. That some people cannot see the obvious intellectual connection between denial of those two realities is really sad. And for people like von Brunn, it is not just analogy. The overlap is 100%.
And in related news, or at least countervailing internet rumor, someone has reportedly filed a 30-page ethics complaint with the California bar against the birther attorney [/dentist/real estate agent] Orly Taitz. As one commenter to a blog on that said, "If filing obviously forged evidence just to get in "on the record" somewhere to lend it credibility, calling for violent overthrow of the government and soliciting members of the armed forces to participate in it etc. don't get you disbarred, WHAT EVER COULD?!?! How can a lawyer (or a dentist) get disbarred?" Readers of our blog can answer that last one: "not paying your student loans." And the commenter did not mention all the more technical violations alleged in the complaint, such as confronting two U.S. Supreme Court justices ex parte. For all you recent bar takers worried about your results, keep in mind that she passed one. Anyway, this is being reported, incorrectly I think, as if the California bar itself has filed a complaint against her, but I have no evidence of that. (And I doubt it given the way the petition is worded. And this site agrees and links its PDF.) On the other hand, maybe she needs to prove that did not happen by producing a signed and certified copy of an official form of some long variety, which disproves the opposite of it, preferably one with tiny footprints on it.
Finally, here is a site to make your own fake Kenyan birth certificate, with a template helpfully provided. (I am looking forward to receiving emails promising me 250,000 pounds if I help smuggle the true one out of the continent.) But I have already made one for Jeff. One can only hope that his new citizenship will improve his long distance running.
Saturday, June 20, 2009
Posted by Jeff Lipshaw
My life partner now of thirty years, Alene, knows me too well. She just finished David Hackett Fischer's (left) massive biography, Champlain's Dream, and walked into the office to show me Fischer's last couple of pages, and in particular this:
Champlain argued that a leader must be prévoyant, a word that has no exact equivalent in modern English. His idea of prévoyance was different from foresight in its common meaning. It is not a power to foresee the future. To the contrary, prevoyance was the ability to prepare for the unexpected in a world of danger and uncertainty. It was about learning to make sound judgments on the basis of imperfect knowledge. Mainly it is about taking a broad view in projects of large purpose, and about thinking for the long run.
What is really cool about this, for one thing, is the accessibility of the source materials. I was curious about what Champlain actually said on the subject, and Fischer's annotations take you back to the online resources of the Champlain Society in Toronto, where in a couple clicks, you arrive at the very page where Champlain used the word preuoyant in the original French.
There's more than a micro and a macro nugget of wisdom for lawyers and regulators here. The micro has to do with a theme we talked about last week at the AALS Mid-Year Conference on the basic business associations course, and on which I previously blogged:
As to the conception of business law and lawyering, I noted that the data of the world doesn't just organize itself; there is a relationship between the observer and the observed in which the observer brings something to the party. The predominant approach within the academy is to be, as Ronald Gilson observed, entomologists studying the beetles, and Usha had it right: entomologists telling the beetles how to BE beetles. It means academic conceptions of the law and its role are retrospective, objective, litigious, and analytical, while the practice conceptions of transactional law are forward-looking, subjective, transactional, and strategic/tactical. Moreover, what academic business law usually leaves out is the integration of doctrine, and the law itself, into the business (or Flog) game, which means dealing with (a) the exercise of good judgment, and (b) the limits of the law as means to the ends of the game.
Champlain seems to have had the same thing in mind for mariners: you have to be a master of the detail (pricking the charts, knowing longitude and latitude, selecting food, understanding the construction of the ship, etc., etc., etc.,) but "[b]esides what is said above, a good sea-captain ought not to forget anything necessary [to be done] in a sea-fight, in which he may often find himself engaged. He should be brave, foreseeing [preuoyant], prudent, governed by good sound judgment, taking every advantage he can think of, whether for attack or defence, and if possible keep windward of his enemy."
That exercise of judgment is a subtle trick, because Champlain makes it clear that the "wise and cautious mariner ought not to trust too fully to his own judgment" on important decisions, but to "take counsel with those whom he recognizes as the most sagacious, and particularly with old navigators . . . for it is not often that one head holds everything, and, as the saying goes, experience is better than knowledge." At the same time, there is a place for individual mettle, for when there is real danger "you must display manly courage," use a "steady voice," and "dispel fear from the most cowardly bosoms."
The macro has to do with foresight or prévoyance itself, and how it applies to big crises like the present financial meltdown. Not to press the point too repeatedly (well, okay, if I must), but as I have just argued in a newly posted piece on the epistemology of the financial crisis, and on which topic David Zaring has some sage comments, politicians and regulators, like generals, are usually fighting the last war. Sarbanes-Oxley, as well as the "money-loosening" that followed the bursting of the Internet bubble are examples. Why it is so hard (despite the couple of lucky or prescient souls who saw it coming, but then again, I've hit long shots at the race track too) to regulate systemic risk looking forward rather than backward? The gist of the metaphor is that it's awfully hard to prescribe the medicine when you are still trying to figure out what the disease is!
Thursday, June 18, 2009
Posted by Jeff Lipshaw
At the end of April, I attended a fascinating day-long symposium organized by fellow blogger Dave Hoffman and two of his colleagues at Temple, Jonathan Lipson and Peter Huang, on issues of complexity arising in the current financial crisis. One of the questions that kept occurring to me was the context of the complexity issue - what exactly were we trying to fix, if anything? My analogy was this: if law is a "science," and something about the financial crisis (whether complexity or something else) reflects a disease, then what is the relationship between what we know about the disease and the regulatory medicine we would want to prescribe? I liken financial boom-and-bust to bipolar disorder - is there a regulatory equivalent of lithium that we are assured will tamp down the peaks and valleys? And even if there is, do we want to prescribe it? Maybe we like the booms enough to bear the busts! There's a good chance Tchaikovsky and Van Gogh were bipolar - would we have their art if they had been medicated?
Anyway, when I get to thinking, I usually get to writing (particularly when ensconsed in our Michigan house). This seemed like grist for the mill on one piece of a longer work on the difficulties in forward-looking judgment, namely, the difference between looking backward and assessing causation as a matter of attributing blame, and understanding what is going on as a descriptive matter sufficient to make a good forward-looking decision in real time under conditions of significant uncertainty. The result is The Epistemology of the Financial Crisis: Complexity, Causation, Law, and Judgment, which I've just posted on SSRN. (I apologize for the use of the word "epistemology" but I like it.) Here is the abstract:
The focus on complexity as a problem of the financial meltdown of 2008-09 suggests that crisis is in part epistemological: we now know enough about financial and economic systems to be threatened by their complexity, but not enough to relieve our fears and anxieties about them. What marks the current crisis is anxiety that the financial world has evolved to the point that there are hidden structures, like concentrated "too big to fail" institutions and mechanisms, or like credit default swaps, that have widespread and adverse downsides. I propose an analogy between medicine and law in the sense of "regulatory technology." If bubbles are the disease, then the analogy is to bipolar syndrome - exuberance, or even a little hypomania is okay on the upswing, but true mania is bad, as is the resulting swing to depression. Good regulation, then, would be something like lithium, which keeps us on an even keel. The question is really whether we understand the forces well enough to regulate them. Regulation is a function of prediction; prediction is a function of observed regularity; observed regularities invoke the problem of causation; causation raises the issue whether the process being analyzed is reducible. Complexity in itself relative; what seemed inordinately complex to ordinary people, much less deep thinkers, in 1787 or 1887 might not seem at all complex to us now. What we are dealing with instead is a crisis of confidence in those who purport to be experts in what we cannot fathom merely through common sense. The conundrum, of course, is that if it takes an expert to see the problem caused by complexity, how are we, possessing merely common sense, supposed to do anything but rely on their judgment? The epistemological crisis arises from our own judgments to rely on, believe in, trust, or have faith in, that judgment.
Saturday, May 30, 2009
Congrats and further best wishes to Jeff and Alene Lipshaw, who are now celebrating their 30th wedding anniversary (?!!) in Santorini, Greece. I know they are having a good time. And we are happy for them! [Alan Childress]
UPDATE: Thanks, Alan - this is this year's alternative to the Law & Society confab in Denver. Damn! And who's the dorky guy with the beautiful woman? [Jeff Lipshaw]
Thursday, May 28, 2009
Posted by Jeff Lipshaw
I have nothing to say about the nomination, and very little reaction, other than this seems to be a perfectly fine nomination of a perfectly fine judge who has the temerity not to have a consistent set of beliefs that manage to satisfy every interest group on all poles of every issue.
Our family did, however, get a good yuck out of the Type I diabetes issue, as Judge Sotomayor appears to be the first Type I diabetic to be nominated to the Court, as summarized here in the New York Times. For the uninformed, Type I diabetes mellitus (also known as juvenile diabetes) is an autoimmune disease in which the body's antibodies attack and kill (permanently) the insulin producing cells in the islets of Langerhans in the pancreas. Insulin is what allows the body to process glucose. Type I diabetes is a permanent condition (presently) requiring the intradermal injections of insulin for the patient to survive (hence, "insulin dependent"). It is different from Type II diabetes in which pancreatic function is decreased but not killed off. There appears to be a genetic predisposition to auto-immune diseases (like psoriasis or rheumatoid arthritis or Type I diabetes), and it's thought that a virus triggers the disease. There is presently no cure.
One out of every six hundred people is Type I diabetic. If you have a diabetic sibling, you have a 5% chance of being diabetic. We have three children, ages 25, 22, and 20. All three have Type I diabetes. My daughter has lived with it for sixteen years. All three of my children are healthy and successful (presently one in the MFA program in theater at Columbia, one entering med school at Michigan in the fall, one finishing his sophomore year at Stanford). Other notable Type I diabetes included Jay Cutler, the new quarterback of the Chicago Bears, and Mary Tyler Moore.
The idea that Type I diabetes is a political issue is just ludicrous. Justice Scalia seems to be a tad overweight (possibly a candidate for Type II!), and we know very little about the thyroid issues, or atherosclerotic condition of the other justices. Do any of the male justices have male urinary syndrome that might cause them to go running for the loo during an argument (in which case FloMax will help)? I'm thinking that restless leg syndrome might be a problem too.
I do appreciate the chance to say that with care and discipline Type I diabetes is a chronic disease that families can manage very, very well, and there isn't a single thing in the world that a Type I diabetic can't do. But feel free to make a contribution to the Juvenile Diabetes Research Foundation.
UPDATE: My wife reminds me there's something a Type 1 diabetic can't do, and that's go into combat. I'm okay with that.
Monday, May 11, 2009
Posted by Alan Childress
So obviously the methodology is more valid than that of U.S. News & World Reports, which ignores consumer satisfaction and instead surveys the ... competitors' chair of their hiring committee??? What kind of statistical method is that? Who are the ad wizards behind that sort of academic ranking? Maybe there's a reason you never see the infamous Coke-Pepsi taste test done by asking the head of Pepsi's personnel department what she thinks about drinking a Coke. (She is against it. She candidly ranks Coke's taste as way lower than that of the radioactive barium milkshake they give you to gulp just before you take abdominal xrays. Pepsi now ranked as number one soft drink.)
Wednesday, February 18, 2009
The controversy generated by the District of Columbia Bar's attack on Avvo continues. Carolyn Elefant has questioned whether her mandatory bar dues should be spent pursuing litigation that she opposes. An Avvo -related web page has posted the following threatening letter from the Bar's counsel. I wonder, as did Carolyn, whether the Bar should be trying to shut down the flow of accurate and publicly-available information and whether my dues should fund that effort.
I have been a dues-paying member of this Bar for 34 years and was a bar employee for over 17 years. It has been my experience that the Bar is run by and for the insiders (consisting of the large firms who wish to share in the leadership and the entrenched Bar executives). If you do not subscribe to the views of and show fealty toward the leadership, you simply do not exist. Any of my attempts to bring an issue or an injustice to the Bar's attention (such as the forced removal of a member of the Board on Professional Responsibility for the crime of focusing on the public interest) have met with stony indifference at best and "how dare you" at worst.
I remain a member because I must but am constantly reminded of the wit and wisdom of Groucho Marx.
See this related post from Simple Justice. (Mike Frisch)
Tuesday, January 6, 2009
Posted by Jeff Lipshaw
Two colleagues walked into my office yesterday and told me they had thought of me when reading the Michael Lewis/David Einhorn essay that purports to explain exactly what went wrong with the financial markets in the Sunday New York Times. David Zaring and Frank Pasquale have weighed in on the Lewis/Einhorn piece (Zaring = "kneejerk/post-hoc moralizing"; Pasquale = "smart commentary"); like Fred Tung, I think I have to go with David's balloon-popping of the "I-Told-You-So" School, and thank David as well for reminding me to go back to Joe Nocera's article about Nassim Taleb and the "Value at Risk" algorithm in the Sunday NYT Magazine. (The problem, for me, with Sunday Magazine articles is that part of our paper gets delivered on Saturday, and the magazine gets stored in a hermetically-sealed container for twenty-four hours so that I have a pristine crossword puzzle to do on Sunday morning. I jump right to the crossword (do not read The Ethicist or William Safire, do not pass GO)).
It's not enough to say "see, I was right" because some lucky bastard always manages to take the long shot bet. My prime example of this is Edward Yardeni. He's still in business, despite having predicted the end of the world as a result of the Y2K crisis. The link is to a CNET article dated January 4, 2000 when it appeared that, indeed, the world had not collapsed, not the U.S., which had spent trillions, and not even Italy, which showed up on most people's charts as completely unprepared for the turn of the clock! I love this - here's what it looks like when you've bet the farm on doomsday, and doomsday doesn't happen:
In a statement posted Sunday on his own Web site, Yardeni.com, one of the more outspoken doomsayers on the Y2K problem, said he is "impressed and pleased by the smooth transition into 2000 so far." He also said the risk of disruptions to global supply chains, which was his No. 1 concern, now seems less likely to occur.
He also said that if no "significant" problems occur by the end of this month, he will admit he was wrong about a Y2K global downturn.
In the statement, Yardeni credited the IT community for a successful century date change as well as Y2K preparedness efforts by John Koskinen, the U.S. government's leading Y2K man.
Of course, this doesn't account for Italy. (Per the CIA in October, 1999: "Russia, Ukraine, China and Indonesia are among the major countries most likely to experience significant Y2K-related failures. Countries in Western Europe are generally better prepared, although we see the chance of some significant failures in countries such as Italy.") But who cares when you've made a bundle in consulting and appearance fees.
The lead-in to Nocera's piece, a quote from Peter Bernstein's introduction to his work on risk, Against the Gods, capsules this nicely:
The story that I have to tell is marked all the way through by a persistent tension between those who assert that the best decisions are based on quantification and numbers, determined by the patterns of the past, and those who base their decisions on more subjective degrees of belief about the uncertain future. This is a controversy that has never been resolved.
Books are starting (again) to stack up on my desk, but they all seem to tie back into my thesis about the irreducibility of judgment (and rule-following). Take Harold Schulweis' book, Conscience: The Duty to Obey and the Duty to Disobey. It's an argument, drawn on several Jewish sources (e.g. Abraham's argument with God about saving Sodom and Gomorrah), that our own conscience can override what seems to be God's dictate. How can that be? And if it's so (and, by the way, it seems that way to me!), how do you decide when to obey and when not to obey? If you are allowed to argue with God, then you probably ought to be able to argue with the results of the Value at Risk algorithm. But when God or the entire financial community are telling you X, it's really hard to do Y! Then when you do Y, and it turns out you were right, were you wise or insane but lucky?
I'm also reading Mark Turner's Cognitive Dimensions of Social Science. Turner (pictured above) is a leading theoretician in cognitive science. This is fascinating stuff - he's taking apart Clifford Geertz's iconic article "Deep Play" on the Balinese cockfight, not from an anthropological standpoint, but the standpoint of trying to theorize how human beings evolve new meanings. The key here is culturally developed categories (how our minds classify data) and metaphor or analogies that disturb them. Moreover, we blend meanings from separate "influencing spaces" into a new meaning. The hypothesis is that the so-called "double-scope blend" in which two wholly separate influencing spaces determine a new meaning is the critical evolutionary development that makes us human. I think of it this way. My dog associates my putting on my coat with going for a walk. My understanding is that is a single-scope blend of meaning. A double-scope blend, on the other hand, is the metonymy (or is it synecdoche) of, say, the cockfight. Natural cockfights and Balinese social structures don't have much to do with each other until they are blended to have a new meaning in which the victorious chicken says something about its owner. (Think about your affiliation with your favorite sports team.) Modern humans do double-scope blends; no other creatures do. (That sounds like a testable hypothesis to me, by the way.)
In short, if the sensory data of the world takes on meaning to a human being through a process of blending - of metaphor and analogy - what does that say about the tension Bernstein identifies? And is being right in your prediction of the future any evidence of the superiority of the mental processes that produced it?
Monday, December 22, 2008
Fifth Circuit Upholds $14M Judgment Against N.O. Prosecutors' Office For Brady Violation In Capital Case: A Million For Every Year In Prison, And A Deathbed Confession By The ADA Just Before Execution
Posted by Alan Childress
This eye-catching summary [and link to Friday's opinion on the U.S. Fifth Circuit website] by Robert McKnight, appellate practitioner and publisher of the Fifth Circuit Civil News and its daily updates:
Thompson v. Connick, No. 07-30443 (5th Cir. Dec. 19, 2008) (King, Stewart and Prado): A jury awarded $14M in compensatory damages on finding, in a case under 42 U.S.C. § 1983, that the district attorney's office in New Orleans precipitated, by deliberate indifference to its obligation to train employees on their obligations under Brady v. Maryland, a failure to provide exculpatory blood-typing evidence from an armed robbery for which the plaintiff was convicted in April 1985. The same prosecutors accurately predicted that the April 1985 conviction would dissuade Thompson from testifying on his own behalf (in order to avoid impeachment with the conviction) in his trial a month later for a different armed robbery that ended in a murder. Thompson was convicted in the second trial and was sentenced to death. "Eighteen years later -- and one month before [Thompson's] scheduled execution -- Thompson's investigators uncovered the exculpatory evidence that indisputably cleared [him] of the armed robbery charge." The murder conviction was also set aside, on the ground that the prosecutors' misconduct deprived Thompson of his right to testify at that trial. When retried for the murder, Thompson was acquitted. The district court added about $1M in attorney's to the jury verdict, and denied the defendants' post-judgment motions. Holding: Affirmed for the most part. Among other holdings in a 48-page opinion, the Court held that Thompson's claim was not time-barred, that sufficient evidence supported the jury's verdict, that the withholding of evidence was not the unanticipated action of a single rogue prosecutor, that the jury instructions (and an answer to a jury question) on deliberate indifference were adequate, that the damages were not excessive, and that the fee award (which was half of what Thompson's counsel asked for) was not an abuse of discretion.
The only reversal was on the district court's erroneously naming of several individual defendants in the judgment, including former DA Harry Connick (yes, the father of the crooner). One eye-popping fact repeated from page 2 of Judge Prado's opinion is well worth adding to the list within Andy Perlman's excellent summary of our faith in the death penalty system:
Eighteen years later—and one month before his scheduled
execution—Thompson’s investigators uncovered the exculpatory evidence that
indisputably cleared Thompson of the armed robbery charge. Thompson was
then retried for the murder and found not guilty.
The Times-Picayune news story on the case also reports that "Thompson's defense team learned that the prosecutor, an assistant to former District Attorney Harry Connick, confessed while dying of cancer that he had suppressed the lab report." Luckily, and before that, "a month before his last scheduled execution date, an investigator found a piece of microfiche containing a 1985 lab report that indicated he could not have committed an attempted armed robbery for which he had been convicted before his trial in Liuzza's slaying." After this research find, a friend of the deceased ADA reported to defense attorneys the ADA's confession and executed an exculpatory affidavit, about five years late.
Update 2: McKnight tells me that the dying ADA's friend and former coworker eventually received a public reprimand for his own failure to properly report the confession (he should have reported it timely to the court, not years later and just to the DA and defense counsel). Actually it was a barroom, not deathbed, confession. And the ADA had not himself properly reported the Brady violation at all before he died in 1994, so my characterization of it as a deathbed confession [as if he really fixed the situation he created] was unduly charitable. Here is the 2005 discipline opinion on the friend, by the Louisiana Supreme Court.
Thursday, December 4, 2008
[posted by Bill Henderson]
Today is pretty special. Indiana Entrepreneur Michael Maurer (IU Law '67) has donated $35 million to the Law School, henceforth renaming it the Michael Maurer School of Law. During the press conference, Indiana University President Michael McRobbie reported that the gift is eligible for Indiana University matching funds, "effectively doubling the $35 million gift." This builds upon the $25 million Lilly Foundation gift we received last year, which also resulted in additional matching funds from the University.
Michael ("Mickey") Maurer stated that scholarship money he received as a second year student at Indiana Law, which came from a law firm with several successful alumni, was the inspiration for the gift. The full story from the Indiana Business Journal (a publication Maurer owns) is here.
Saturday, November 22, 2008
The Massachusetts Supreme Judicial Court has granted permission to a graduate of an online law school, waiving the requirement of graduation from an ABA accredited school. The applicant's qualifications:
In July of 2002, Mitchell received his undergraduate degree, a bachelor of science in law, from Concord, and in July, 2004, he received his juris doctor degree from the same institution. In connection with the law degree, Mitchell graduated with "highest honors," and was the class valedictorian. Following his graduation, he sat for and passed the California bar examination, and was admitted to the bar of California in November, 2004. He was admitted to practice before the United States Court of Appeals for the First Circuit in December, 2004, and before the United States District Court for the Central District of California in March, 2005.
The court concluded:
The record contains quite specific information about the required and elective courses that Mitchell took as a law student at Concord--the course subjects, an overview of topics covered, and the legal texts and authors that were used--as well as a description of the extensive online research resources that were available to him. Our review of these materials indicates that Mitchell's core course of study, and legal research resources, were substantively very similar to the core content offered by ABA-approved law schools. See Osakwe, 448 Mass. at 92-93. Moreover, and of great importance, the record reveals that Mitchell achieved an exemplary degree of success as a law student. Thus, he won "outstanding achievement" awards in three of his first year courses, an award for best oral advocate and best brief in his moot court exercise in the third year, and over-all academic honors in all four of his law school years, graduating with highest honors and as valedictorian of his class in July of 2004. [FN10] Finally, we find the following factors significant: (1) the State of California, through its bureau for private postsecondary and vocational education, had specifically approved Mitchell's law school, Concord, to grant a juris doctor degree at the time Mitchell was a student; (2) Mitchell has taken and passed the California general bar examination and did so the first time he took it; (3) Mitchell has taken and passed the multistate professional responsibility examination with a scaled score well above that required by the board (see note 3, supra ); (4) he has been admitted to practice both in California and before the United States Court of Appeals for the First Circuit; and (5) Mitchell, who has represented himself throughout this case, filed briefs and gave an oral argument in this court that were of commendable quality, providing us with a concrete and positive illustration of his skills in legal analysis, legal writing, and advocacy. In sum, we are persuaded that in Mitchell's case, the underlying level of purpose of our ABA approval requirement--to insure an appropriate level of legal education--has been met.
There was a dissenting opinion:
Here, because of present ABA standards, there is no imminent ABA approval. Ante at,. Indeed the court states that the ABA process of reviewing its current standards has just begun. Ante at. In addition, the plaintiff here does not state that he was somehow unaware of the hardships he could face when he chose to enroll in an unaccredited law school. See Matter of Tocci, supra at 545, 547 (denying waiver to sit for bar examination even though fact that applicant had to attend different law school from accredited one he enrolled in was not his fault; applicant made informed decision to attend unaccredited law school and recognized difficulty he would face).
The plaintiff points out, among other things, that his career made it more convenient to attend law school online and that his law school was significantly less expensive than traditional law schools. These considerations are hardly extraordinary. Many people give up careers, or attend law school while working full-time, all the while incurring great costs to themselves, financially and otherwise. Presumably part of the calculation of those who choose to incur those costs is that, to do otherwise, would be to incur a risk they would rather not take.
Finally, I conclude that the court's claim that it can limit its holding to the circumstances in this case is illusory. We do not know when the ABA will complete its review or, more importantly, what the result will be. The review for the current 2006 ABA standards began in 2003. As noted, the new ABA review has just begun. In the interim, I am concerned with the potential for having to assess large numbers of graduates from other online law schools.
The case is Mitchell v. Board of Bar Examiners, decided November 20, 2008. (Mike Frisch)
Thursday, November 20, 2008
Posted by Jeff Lipshaw
Daniel Henninger, who comes out from behind the black curtain of the Wall Street Journal editorial page each week, had a column today that had me nodding in agreement until the last overstated conclusion.
My thesis has always been that neither economic models nor legal models will supply judgment; there's something irreducible about judgment that requires engagement with fundamental assumptions about the way the world works. Models, for example, of risk and reward, only describe pieces of the world, not the world itself. So Henninger is correct when he says that the three Rs of responsibility, restraint, and remorse "are the ballast that stabilizes two better-known Rs from the world of free markets: risk and reward."
I'm okay with that.
Northerners and atheists who vilify Southern evangelicals are throwing out nurturers of useful virtue with the bathwater of obnoxious political opinions. . . . The point for a healthy society of commerce and politics is not that religion saves, but that it keeps most of the players inside the chalk lines. We are erasing the chalk lines.
Huh? The challenge in 2008 is not to save boardrooms and management suites by fundamentalist appeals to Jesus before taking each decision. I'm not aware of anything in the Sermon on the Mount directly on point when I'm trying to figure out an optimal debt level. And why Southern evangelicals? My daughter and son-in-law were married at the Society for Ethical Culture on the Upper West Side of New York City, no doubt within shouting distance of a couple Northerners and atheists. Amazingly enough, there are a few of us (even here in Cambridge) who know that Adam Smith wrote both The Wealth of Nations and A Theory of Moral Sentiments.
No, the real challenge is demonstrating the practice of wisdom, which is something different either than adherence to a risk algorithm, davening each morning and afternoon, or singing on Sunday mornings in the choir. There's no doubt that religion can provide the source of a moral code, but I'm troubled by one that might say that God caused the Dow to fall 4,000 points to punish atheists, homosexuals, and East Coast liberals.
Wednesday, November 5, 2008
Posted by Jeff Lipshaw
Back in March, 2007, before I owned an Obama button (which I acquired the day of the New Hampshire primary, when I did a hour or so of phone bank calling, ugh), I posted something on the mastery or learning mindset. It came from Stanford Professor Carol Dweck, and I summarized it as follows:
The thesis is that there is an additional outlook, or mindset, wholly unrelated to intelligence, that frames how we look at problems. The distinction is between a "fixed mind-set" that sees intelligence as static, and a "growth" or "mastery" mind-set that sees intelligence as something that can be developed. The fixed mind-set about wanting merely to be smart, but the mastery mind-set is about wanting to learn. As a result, if you simply are smart but not a learner, you would have a tendency to discount effort, avoid challenges, give up easily in the face of obstacles, and be defensive, particularly about making mistakes. Learners, on the other hand, like challenges, persist in the face of setbacks, embrace effort, and tend to find lessons in mistakes. I thought one of the conclusions in a diagram of the model was interesting - it generalizes that fixed mind-set confirms a deterministic view of the world but a mastery mind-set gives a greater sense of free will.
Over at PrawfsBlawg, Ken Simons offers up the thesis that part of the reason Barack Obama won was because of his "academic temperament." I think he's on to something, but I don't think the right answer is academic temperament. With all due respect, I've met a lot of law professors, and a lot of non-law professors, and I'm still not convinced there is a greater likelihood you have the mastery mind-set because you are a law professor.
What I think I responded to in Obama from the very beginning is what Laurence Tribe describes in his touching Forbes.com essay today: "Barack Obama's unique ability to explain and to motivate, coupled with his signature ability to listen and to learn."
Honestly, I don't recall, at least since Kennedy, a learning President. And I'm not sure about Kennedy, because I think his personal peccadilloes might have disqualified him.
Sunday, October 12, 2008
Posted by Jeff Lipshaw
I'm off to Springfield, Massachusetts at the end of the week to participate in the Entrepreneurship in a Global Economy symposium at Western New England College's Law and Business Center for Advancing Entrepreneurship. I will be discussing my somewhat contrarian and deliberately provocative essay "Why the Law of Entrepreneurship Barely Matters."
A while back I wrote a lumbering piece with a point that seems to me more apparent now than it did when I published it in 2005: the law (I was focusing on contract law) is not a particularly good tool for addressing radical uncertainty. When it comes time to make difficult predictions about a highly contingent future, the process of judgment is so complex that it overwhelms the law's linguistic model. Imagine writing a contract that depends on the twentieth move of a game of chess that has yet to begin. In theory, it's possible, but in practice, we still don't know if it's merely impractical or impossible. And chess is simple compared to life.
I have joked over and over again (I apologize for it) that I like to work at the intersection of Kantian philosophy and venture capital, and Thomas Friedman's column in today's New York Times brought me back to the thesis. He quotes a friend to the effect that nature is just chemistry, biology, and physics, and you can't spin it, bribe it, or sweet talk it. In Kantian terms, that is the heteronomous world in which we live, of physical cause-and-effect of which we must necessarily be a part. Friedman's point is the same one I tried to make in a late footnote to the lumbering piece: markets are very much the same as nature. "At their core markets are propelled by fear and greed. They're just the balance at any given moment of those two impulses." I believe that as well. There's little that is moral about markets, just as there is little that is moral about physics. Nor do we really, after all is said and done, want to eliminate fear and greed. It's what sustains our bodies, and Kant was enough of an empiricist, I think, to believe that if there was a soul, the only way you could know anything about it was because it was housed in a body. Or to put it in terms of Jewish lore: we have a "bad" impulse, the yetzer hara, by which we lust and amass, and a good impulse, the yetzer tov, by which we love and contribute, and we can't live (or live well) without either of them. The Aristotelians looking for a golden mean should like this as well. In present terms, it leaves me equally repulsed by unrepentant free market apologists and by blame-seeking moralists. (The need to "blame" somebody for the current crisis is an interesting exercise in teleology as well, but that is for another time. Suffice it to say that innocent people losing savings in market crashes is as almost as troubling as innocent people dying in airplane crashes, and reconciling either one is a tough philosophical issue.)
What does this have to do with entrepreneurship? Again, to quote Friedman on the coming global workout of this credit bubble: "The workout promises to be painful, complicated, and protracted. Government will have to do its part. But it must regulate the excesses without smothering the underlying innovative, entrepreneurial and risk-taking attributes of our economy, which are what will ultimately bail us out - as they always have."
So my project as a business person and lawyer of some worldly experience, and as a teacher of lawyers, has been a tad contrarian: suggesting to business lawyers that they ought to approach their task with some amount of modesty about their role in dealing with radical uncertainty. (It's hard to get a feel for what I mean if all you do is read cases, or even litigate cases. That is merely structured second-guessing.) The lawyer's role not trivial, but it's not the be-all that law and economics would suggest by the notion of an "incomplete contract" (think back to my chess example) as though the idea of a complete contract does any helpful intellectual work at all. And that's just law! Ethics is another ball of wax. Unless the proposal is that we go back to pre-Industrial Revolution agrarian society, somebody has to make our iPods and laptops and hybrid cars and get all that stuff to Whole Foods, and industry, even when it's done well and responsibly, is a dirty business that calls on us to make tough choices.
What I really love about the juxtaposition of lawyers and entrepreneurs is this jarring contrast in the approach to uncertainty. At the behest of my son, I've been wading through Gore Vidal's dense historical novel, Burr. Burr was a practicing lawyer to the end of his life, and, in the novel, the young clerk in his office who narrates the story wants to know if he should take the bar exam. Burr says he should because he will certainly pass. The narrator replies, "But I don't want to be a lawyer." Burr responds, "Well, who does? I mean what man of spirit? The law kills the lively mind. It stifles originality. But it is a stepping-stone. . . ." Why does the micro-law of entrepreneurship barely matter? Because it can barely contain the wide-ranging orientation to change and innovation in the face of uncertainty that is the mark of an entrepreneur. Effective lawyers to entrepreneurs, like effective lawyers to business people, and like effective ethicists dealing with the workings of amoral markets, have to be able to walk and chew gum.
Friday, October 10, 2008
Posted by Jeff Lipshaw
I was working away this morning and trying not to look at the Dow when a thought struck me. Back when I was fighting the governance wars from the inside, arguing from the board's standpoint why having poison pills and classified boards made sense (at least in the right hands), there were several studies done linking good governance to share performance, the most famous being the Gompers/Metrick/Ishii study. I was not (and am not) statistician enough to know if the study was good; all I can say is that my intuition was and is that things like technology, cost productivity, barriers to entry, business savvy, and things like that would have a lot more to do with share price than whether there was a poison pill or the shareholders had the right to call a meeting. Moreover, I'm not sure how you would factor out those differences among companies other than to say it all evens out in a big enough sample. As I said, I'm not statistician enough to do the work myself.
What occurred to me was the question whether, if I had a portfolio of the "best governed" companies on October 9, 2007, at the very height of the stock market, and kept that portfolio unchanged for one year, how would it do? Given that I performed this little empirical study from the laptop in my den, don't have the individual governance scores on any survey (CGC from ISS, or whatever GovernanceMetrics puts out), and couldn't do the regressions and correlations even if I did (but I did leave a phone message for Bill Henderson), I simply went to the website of IR Global Rankings, and took the thirty companies it ranked best in corporate governance practices (listed below the fold), found their historical closing stock prices on Yahoo! Finance for each of October 9, 2007 and October 9, 2008, assumed a portfolio of one share of each, and looked at how the portfolio performed. (Other methodology disclosures also below the fold).
Here are the results:
Decline in "good governance" portfolio: 50%
Decline in S&P500 Index Fund 42%
Decline in NYSE Composite Index Fund 43%
Decline in Dow Jones Industrial Average 39%
Within the good governance portfolio, every stock declined. The best performers were Bayer AG (17% decline), Procter & Gamble (12% decline), and Global Payments (11% decline). The worst performers were ICA (93% decline), Wachovia (93% decline), Banco BPI (71% decline), and Life Time Fitness (70% decline). (I did not check to see if these numbers were adjusted for splits, but I assume so.)
But you'd still be better in index funds than picking stocks based on the IR Global Rankings of good governance practices.
Tuesday, September 30, 2008
Posted by Jeff Lipshaw
If you want some sane commentary these days, try reading David Brooks in the New York Times. His column yesterday on the defeat of the bail-out bill was entitled "Revolt of the Nihilists." Here's a taste:
We’re living in an age when a vast excess of capital sloshes around the world fueling cycles of bubble and bust. When the capital floods into a sector or economy, it washes away sober business practices, and habits of discipline and self-denial. Then the money managers panic and it sloshes out, punishing the just and unjust alike.
What we need in this situation is authority. Not heavy-handed government regulation, but the steady and powerful hand of some public institutions that can guard against the corrupting influences of sloppy money and then prevent destructive contagions when the credit dries up.
The Ohio Supreme Court issued a decision today that modifies the court's position on piercing the corporate veil. The decision is summarized on the court's web page:
In a decision announced today, the Supreme Court of Ohio held that when a plaintiff pursuing a civil lawsuit against a corporation seeks to “pierce the corporate veil” (bypass the corporate structure and recover damages directly from a shareholder), the plaintiff must show that the shareholder used its control of the corporation “in such a manner as to commit fraud, an illegal act, or a similarly unlawful act.”
The 6-1 decision, written by Chief Justice Thomas J. Moyer, modified one part of a three-prong test for piercing the corporate veil this Court established in a 1993 decision, Belvedere Condominium Unit Owners’ Assn. v. R.E. Roark Cos. Inc. [See below for an explanation of the three-prong Belvedere test.] The effect of today’s ruling was to deny an attempt by Kimberly Dombroski, a policyholder whose claim for coverage was denied by Community Insurance Company (CIC), a wholly owned subsidiary of WellPoint Inc., to pursue recovery directly from WellPoint for her claimed physical and emotional injuries arising from alleged bad faith denial of coverage by CIC.
Saturday, September 27, 2008
Posted by Jeff Lipshaw
This is what it feels like when you are on the inside of a deal. Can it really be that the AIG bail-out is old news, since trumped by the bigger bail-out bill, the WaMu seizure and sale, the McCain debate cancellation, the screaming session at the White House, the actual debate, and rumblings about Wachovia?
As Steve Davidoff pointed out eons ago, there was a problem with the original structure of the deal between the Fed and AIG in that it appeared to involve giving warrants to stock not yet authorized by a shareholder vote. AIG then pulled back with a press release and 8-K suggesting that it and the Fed had gone back to the drawing board. Also kudos to Steve. He predicted the final form: "I am curious to see how the parties get around this — perhaps by issuing out preferred with equivalent voting and dividend rights?"
The deal as struck now involves the Fed getting 100,000 shares of non-redeemable and perpetual convertible preferred stock. Until the shareholders vote to authorize enough shares of AIG to permit conversion of the preferred stock into 79.9% of the common equity, the Fed holds preferred equity with a liquidation value of $500,000 (that's right, five hundred thousand dollars), but with rights to vote and receive dividends that are as if the Fed owned 79.9% of the common equity. I haven't gone back to look at the AIG certificate of incorporation, but I'm assuming it had "blank check preferred" powers, meaning that the shareholders had granted to the board the right to issue preferred shares on whatever terms the board deemed appropriate without an amendment of the certificate of incorporation.
So.... I take back what I said about the Fed not actually owning AIG. It does. And it will, because there is no provision for the redemption of the preferred shares if the loan is paid back. Moreover, the only risk to the Fed is that AIG goes into bankruptcy before the shareholder vote, because at that point it only has a $500,000 liquidation preference. On the other hand, it still has security interests in all the valuable AIG subsidiaries in the event of a default on the primary loan. What I haven't found yet is what consequence, if any, would follow from the shareholders not approving the amendment to the certificate authorizing the additional stock.
By the way, for all you populists out there, or others interested in class warfare demagoguery, I was curious just who the bailed-out fatcats were. In short, who are the shareholders we are rescuing with our money? There's a lovely little website out there called www.j3sg.com that gives the institutional shareholder make-up of public companies, as well as the companies that institutions own. It turns out that the fatcats being rescued (at least as of June 30) are anybody who has an interest in these and other elitist institutions: Fidelity, Vanguard, TIAA-CREF, New York State Common Retirement Fund, CALPERS, the New York State Teachers Retirement System, the Teachers Retirement System of Texas, the Public Employees Retirement System of Ohio. I could go on and on. None of them were bitching when AIG was climbing up the mountain!
Friday, September 26, 2008
Posted by Jeff Lipshaw
There's an old joke (I guess it's a joke) about a person searching for a lost wallet at night under a street light. "But you lost it over there," says a bystander, pointing down the street. "Yes, but there's no light there," responds the searcher.
I'm not sure I can improve on Christine Hurt's analysis of the situation: this crisis is not about evil, or class warfare, or fraud. It's about bubbles. Bubbles are about systemic misapprehension of risk. Bubbles are about the perception that something in the market always goes up, or at least, everybody else thinks it's going up, and if we are going to compete with them, we better do what they're doing. When the bubble burst, and it's really hard to understand how it all happened, and worse, when we still don't understand the impact of the bursting, it is certainly a lot easier to resort to tried and true bromides and political stereotypes (the bright spot under the street lamp) than to accept the more likely truth: we are all either addicts or enablers and co-dependents to the addicts.
Imagine a family. Dad, Mom, and the kids. Dad and Mom own a house. They believe the value of the house is the one true immutable in the world - it will always go up. Dad and Mom go out and borrow against the equity in their house to supplement the family's life style. And what a binge it is! Vacations to Hawaii. Private schools. Each kid gets a car. But the family now has a lot more fixed debt, and it has to be paid back sometime. The kids don't think about it, and Mom and Dad aren't worried; they know the value of the house will support it, and they seem to be alright making the payments.
But now there's a small glitch. Dad loses his job. Or the interest rate cranks up a notch. Now Dad and Mom are having a hard time making the payments. The drastic way out would be to sell the house, tap the equity and pay off the lifestyle loan, but it turns out the value of the house has gone down. Uh oh. Somehow the piper has to be paid. Who's going to pay it? Dad, Mom and the kids. Dad and Mom say to the kids: sorry but we have to move to a small apartment, sell the cars, take you out of private school, and put you in public school, because we just aren't worth what we used to be. The kids say: "how can that happen? Life was good. Mom and Dad, you were greedy scum (if not fraudulent creeps)." Mom says to Dad: "I told you something wasn't right!" Dad says to Mom: "you never should have bought those clothes." Mom said to Dad: "what made you think we could afford a golf club membership?" And the kids blame both of them, even though their lives in the short-term were probably better as a result of the binge.
Now take my story and write it large. We can see the analog of the kids' position in my following paraphrase of a bitter post over at the Wall Street Journal's website on the bail-out term sheet. An angry taxpayer notes that you contributed to the binge if, in the last eight years, (1) you worked in a position that allowed you to influence or alter the way people purchase real estate; (2) you purchased a house without a down payment or an understanding of your debt obligation; (3) you purchased a home with an interest only, Alt-A, sub prime, piggyback or other type of nonstandard mortgage to shoehorn your way into a house you could never afford without the benefit of financial magic; (4) you participated in cash out refinancing to pay for your kids education, improve your house, take a vacation or anything else that will not bring you a probable return for your spending borrowed money; (5) you worked within the real estate industry or any other business being financed by unduly cheap money.
This rant (not unwarranted, by the way) gets at the addicts but I'm not sure it identifies the enablers. In my analogy, the kids got to share, albeit indirectly, of the pleasures of the binge. Put another way, the creation of wealth in the financial markets is no longer "us" and "them." I don't have at my fingertips the amount of the NYSE and NASDAQ capitalization that is owned by institutions, but it's huge. When I say institutions, I mean mutual funds (Fidelity, T. Rowe Price, Vanguard), insurance companies, union pension funds, state employee pension funds (like CalPERS), university endowments, private foundations, 401(k) plans, 403(b)(7) plans. These institutions work for us, rich people and not so rich people, by making investment choices, which in turn are a matter of assessing risk. If CalPERS took no risk with the pension funds held for all the California public employees, and bought nothing but T-bills, it would have a flock of exceedingly upset retirees. The question is how much did CalPERS and the institutions like it (a) benefit from the bubble, and (b) enable the bubble by buying up the leveraged debt securities or the equity securities of the companies investing in the leveraged debt? Empiricists, do me a favor. Please track how much of the stock of AIG, Fannie Mae, Freddie Mac, and Sallie Mae was held over the last seven years by pension funds, and in particular, union pension funds.** (Note to file: CalPERS was one of the big investors in Enron. And full disclosure: as I recall my investment advisor bought Enron for me at about $80, but, as I recall, had the good sense to sell at $22.) This isn't to blame them: it's to say maybe we have met the enemy and they are us.
My point here is that a lot of people who are professionals in the quantification and monetization of risk got it wrong. They managed to get it wrong all at the same time because there is a "herd" aspect to this: if you don't show the short term returns others are getting, capital (for who owns the capital, see above, because it's all of us) will flee to other managers. I suspect the bell curve of venality is about what it is for any other group in society - most of them were probably about as evil as Mom and Dad. (This is the subject for another time: are corporate boards any more venal than synagogue boards, or non-profit boards, or law faculties, or the Congress? Put another way, what if your battles happen not to be for money, but instead the currency is power, or influence, or fame, or position, or re-election? But I digress.)
So now we're having a big family council, trying to decide who bears the brunt of this seven-year long family binge. Like the above-quoted ranter, the kids say "we benefited from this, but we didn't cause it, why should we have to pay for the excess? Dad should have to quit the golf club, and Mom should have to get rid of her car." One of the kids wants to cap Dad's allowance. One of them has asked the FBI to look into whether there was fraud. Mom and Dad say: "look, kids, we're really sorry we messed up, but we are still the best thing you've got to get this right."
And here we are.
** UPDATE: I did a little quick investigation of my own. If you look at AIG's proxy statement, Fidelity's funds owned 5.7% of the company as of Feb. 14, 2008, making it the second largest shareholder after C.V. Starr, which is Hank Greenberg's firm. Meaning that all of us who had 401(k) or 403(b)(7) or other retirement or investment accounts with Fidelity got the benefit, not so indirectly, of AIG's market value, spurred on in part by its participation in the credit markets. Similarly, as of June 30, 2008, the California Public Employees Retirement System (one of the largest pension funds in the country, holding $54 billion in assets as of that date) held securities in the following companies valued at the time as shown: JPMorganChase, $395 million; Bank of America, $355 million, AIG, $229 million; Goldman Sachs, $228 million; Morgan Stanley, $133 million; KB Homes, $6.7 million.
You can say that "we the taxpayers" are bearing the brunt of the diminution in asset value, but to some extent (and I think to a large extent), we are merely shifting the burden from a left pocket to a right pocket. That tells us two things: (a) it's still very unclear whether a bail-out helps or hurts in the end, but the markets seem to think it helps, and (b) It's a fair request that money not stick too much to those involved (transaction costs and agency costs), but, at the end of the day, all of us want competent people at the helm of all of those companies whose returns fund our retirements.