Category Archives: financial crisis

Judges figure in this, too

Trade War Counter-Spin

So, farmers are upset and claiming that the “trade war” with China is putting them out of business.

We don’t want to see any productive hard working people put out of business.  Especially farmers.  But we also think there may be foundational and structural adjustments to be made and that it’s not easy to do that without some pain.

The way things have been working, we run enormous trade deficits with China and other cheap labor countries so we can buy trinkets at Walmart for virtually nothing, while China buys up our food from our farmers, which is one of the only things ameliorating our trade deficit with them.  One of the effects of all this is to sustain our relatively primitive agrarian economy while China builds up its relatively more sophisticated manufacturing economy.

There’s a sense in which this arrangement is sort of obviously, you know, unwise.

But there’s a deeper issue.  We have grown very accustomed to cheap food and cheap consumer goods while at the same time we have incredibly expensive housing and health care, and pretty high taxation.  Put another way, we transfer an enormous percentage of our national income to bankers for mortgages, government for taxes, and insurance companies for health care.  This sustains in high fashion a basically parasitic managerial class that draw their income from government, or large institutions that feed off of government directly or indirectly, like banks and insurance companies.  And defense contractors – you know, the MIC.

It’s only our opinion, but we think it’s more economically healthy to pay relatively more for food and necessary manufactured goods, and relatively less for housing and government and weaponry and troops.  So we’d like to see farmers paid more by their own neighbors and countrymen for what would probably wind up being better food, but that won’t happen easily because the parasitic class in New York City and Washington isn’t just going to roll over and take a relative pay cut.

So, you know, it’s a difficult adjustment.  Maybe we can bridge the gap with increased subsidies to farmers.  We’ve been doing a lot of that since the New Deal anyway!

Just a little musing here.

 

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Mutual Admiration Society

The Solicitor General’s Office and the SCOTUS.

Things get a little slow over at the SCOTUS blog in the summer, so we guess they figure it’s time to publish the SCOTUS praising lawyers from the SG’s office, or lawyers from the SG’s office praising each other, or the SCOTUS, or vice versa.  Or whatever.

They’re just a little insulated.  As we have noted before.

 

 

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Filed under epistemology, financial crisis, wrongful convictions

Double Trouble

Sometimes we think a subject we visited previously deserves another mention or two.  We have wondered about the constitutional principle of “separation of powers” with regard to public prosecutors, who are members of both the executive and judicial branches of government.

How, we have wondered, can that be?

It appears that the question simply isn’t asked.  Or hasn’t been.  Except around here.

In practical terms we note that in the UK, lawyers are not permitted to just do prosecution or just do defense.  They must do both, periodically.  This is very much unlike our own system in the US.  True, there are prosecutors who segue from the prosecutor’s office to the defense side.  But it’s generally never to return.

And here’s a follow on problem:  judges are overwhelmingly selected from among the ones that stay, the ones that never leave the fold of the prosecutor “community”.  So we have chronicled elsewhere.

We were also able to identify, in previous discussions, other aspects of this problem that wind up being deeply troubling.

First, we violate the separation of powers by allowing attorneys who are members of the executive branch represent that same branch in court both as executive branch prosecutors and as one of the officers of the court itself.  Then, aggravating that problem, we overwhelmingly pick judges from among that same group of lawyers, judges who then talk about their job as “protecting the public”, which is flatly and dangerously wrong by any sensible interpretation.

It is a little surprising to us that arguments about this problem have apparently never been raised or addressed in an American court.  Only by our increasingly unread blog.

Then again, our ideas for amending our constitution have not gone over well before.  We see no reason to expect that this idea will catch on, or even generate any interest, either.

But that’s probably too bad.  The fact that something has no popularity doesn’t mean it’s wrong.  Just unpopular.

Ugh.

 

 

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The Case Against Robert Morgan

We hope the feds know what they are doing.

Here’s a summary from the Buffalo News.

“Ponzi-scheme” allegations don’t seem at all fair.  Here’s one definition:

a form of fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.

Non-existent enterprise?

Morgan (or related entities) has 92 properties, just in New York.  There are 48 current job openings.  At least, if these web pages are to be believed.  Maybe they shouldn’t be, but we can tool around the neighborhood and lo, there are Morgan projects all over the place that appear to be built or a-building.

It’s disturbing.  What happens to all of these places now that the feds have pulled the plug?  Was this a salvageable situation, perhaps an over-extended but basically honest business that might have pulled through but for damaging revelations of the federal criminal investigation in 2017, not to mention such excruciating and bitter developments as a multi-million dollar lawsuit by the principal’s brother?

There are some hard questions here, and we don’t know the answers.  But the potential fallout from this prosecution is disconcerting.

 

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Wow. Just Wow. Updated.

Apparently, we’re in for another financial “crisis” and the Wall Street Journal wants to be sure in advance that the spin is spun.

President Bush and Tim Geithner and Hank Paulson were the great heroes of the last crisis, you see.  They resisted the detestable Trumpian “populism” of the day to reward their friends with a $12 trillion dollar bailout to “save the whole economy” which was “on the line” in 2008.

Here’s the truth.  The “economy” they were saving is not really an economy as that term is usually and properly understood.  They “saved” the corporatist-socialist political system over which they perched then, and continue to perch today.  We say “saved” because it was a very expensive kick the can down the road maneuver that we must admit has exceeded all rational expectations for effectiveness in delaying things, but of course fundamentally changed nothing.  Which of course to overlords is the point:  the “system” as it is has been good to them.  Why change it?

So as we careen towards the next “crisis” which of course is actually a continuation of the previous one that was never actually solved, we have another thought about things economic.  We made a suggestion some time ago about a jubilee 28th amendment that would cancel existing debt and establish a gold standard.  Talk about a fundamental change.  We still like the idea a lot, but it appears we are the only ones.

Here’s another suggestion for a 28th amendment that is almost as good in theory but way simpler.  And to be frank it would probably be about as popular, but that’s a separate problem:

Neither the United States nor any state shall henceforth impose any tax upon, or otherwise permit the encumbrance of, residential real estate.

See, populism does indeed get out of hand (think French Revolution) but that doesn’t mean it should always be ignored.  It can function as a bellwether.

Anyway, comments on this proposal for a constitutional amendment will be appreciated.

UpdateThey always report it, at least somewhere, so it can never be said that your weren’t informed.

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Tolerance For Ambiguity

Again, SHG is not technically wrong in this comment:

You sound as if you’ve been overloaded to the point of head explosion. Tough nuggies. This is reality, and it’s messy. Tolerance for ambiguity is one of the foremost qualities needed to practice criminal law. Not everyone has it.

It would be almost axiomatic:  by nature, the criminal defense position would have to be more sensitive to nuances and ambiguities.  The prosecution narrative is always blunt:  the defendant is a no-good criminal scumbag.  The defense doesn’t assume the burden of the reverse narrative – that the defendant is a great civic hero.

But once again there’s more than a little irony going on.  A tolerance for ambiguity should not become perverted into commitment to ambiguity, a slavish devotion to ambiguity as an overarching principle of action and a framework for understanding anything, no matter what the evidence is.  Dare we say it, that winds up being – well – an unambiguous fealty to the principle of ambiguity.  It’s oxymoronic.

SHG has been explaining himself well the last few days.  We’re grateful, albeit somewhat frustrated and maybe a bit saddened: he stubbornly clings to a failed and rapidly receding professional self concept that has ill-served him, his clients, the profession and the justice system itself.  He’s unreflective about that, and about the possibility that his dominance of a tiny corner of the internet, a part of the “blawgosphere” – has stagnated, aged and withered just as he and his self-concept have.  One’s a metaphor for the other, maybe.

He has exhausted his shtick, methinks.  The gritty, gutsy trench lawyer, the lazy and self-entitled youth that aren’t sufficiently in the SHG mold, and maybe a dozen or so other tired themes have run their course.  It isn’t a weariness that has come out of nowhere, of its own accord.  SHG brings it with him, in more ways than one.

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GREXIT*

It’s easier said than done. Here’s the nub of the problem:

Greek banks, which have been closed all week and rationing withdrawals from cash machines, are expected to run out of money within days unless the European Central Bank provides an emergency lifeline. Finance Minister Yanis Varoufakis is due to meet top Greek bankers later on Sunday and State Minister Nikos Pappas, one of Prime Minister Alexis Tsipras’s closest aides, said it was “absolutely necessary” to restore liquidity to the banking system now that the vote is over.

However the European Central Bank, which holds a conference call on Monday morning, may be reluctant to increase emergency lending to Greek banks after voters rejected the spending cuts and economic reforms which creditors consider essential to make Greek public finances viable, central bankers said.

If Tsipras wants to win this game of chicken he’d better be prepared to fully exit the Euro, for the simple reason that as long as Greeks need Euros to conduct business and transactions of all kinds, the European Central Bank can run his little rebellion into the ground.

This article sheds a little light on the difficulty:

Countries switching currencies must grapple with two major questions: how to introduce new notes and coins, and what to do with bank accounts, debts, and financial instruments denominated in the old currency.

Of course, Bloomberg is an arm of the cognoscenti and is hardly rooting for a successful Grexit, but that doesn’t mean they’re wrong about everything.

One possible solution is to realize just how much the sovereign power can do in this situation as long as it follows natural law.  Assuming the Greek government has some quantity of gold or silver**, it could certainly re-institute a gold or silver based drachma at whatever exchange rate made sense given their ability to redeem their notes.

To give you an idea of how this might go, remember that on these pages we suggested that if the US returned to a gold standard the dollar price of an ounce of gold would have to be pegged somewhere north of $30,000 – at least at first.  And there’s no real reason to be afraid of that: people need to conduct business, buy and sell food clothing and shelter a lot more than they need to get their hands on gold or silver.

The problem – well, one problem anyway – is I suspect that neither Tsipras nor anyone else in a position of authority in the Greek government has a clue about any of this.  Which means if the German dominated ECB wants to turn the screws they can and the Greek people will suffer.

In any case, it’s a fascinating development.

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*   For those of you who are inexplicably puzzled by this title:

https://en.wikipedia.org/wiki/Greek_withdrawal_from_the_eurozone

 

**   Of course, when Cyprus went down this road a little ways about 2 years ago, the “troika” confiscated all their precious metals, probably for the very reason that it could provide a viable way out.

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