Friday, February 26, 2010

Yet More Media

It's been a big media week for Law Prof on the Loose. I was in a story on the local FOX news last night. You can see it here.

The story was about all the money DC is paying out in settlements in lawsuits over alleged police and other public misconduct. As usuall, the 5-second snippet of me consists of the most contentious thing I said. They show me saying that defendants are usually happy to string out cases and maybe wear down the plaintiff. Which is true, but my larger point was that defendants, without doing anything wrong or unethical, make decisions about what to do based on cost-benefit analysis. If setttling a case is cheaper than the expected cost of going forward to trial (and bearing in mind the effect on other cases of either course of action), a defendant will settle. There are lots of considerations, but the main one is figuring out the lowest cost course of action.

Thursday, February 25, 2010

Watch What You Say

I am quoted in this week's Newsweek, which has got people e-mailing me about it. It's got me remembering that press quotations can be misleading.

Newsweek's reporter initially contacted me about some bills working their way through the Virginia legislature that would say that no one in the state would be required to buy health insurance. It had previously been reported that these bills, if passed, would "make it illegal to require people to buy health insurance." Federalism is one of my areas of expertise, so he asked me whether a state could prevent Congress from requiring people in that state to buy health insurance. I pointed out that (a) that's not even what the bills say, and (b) of course if they did say that, they would be pre-empted by a federal law that mandated health insurance, if Congress passed one. So any state that passed a bill that purported to protect people in that state from a federal mandate requiring health insurance coverage would just be engaged in meaningless grandstanding, as politicians so often are. (The chairman of the Federation of Virginia Tea Party Patriots said that the bill was a focus of major lobbying by Tea Party volunteers. It says a lot about the Tea Party that one of their major priorities is a bill that wouldn't actually do anything.)

He also asked me more generally about the health care bill working its way through Congress, and whether it would be constitutional for Congress to require people to buy health insurance. I spent a good ten or fifteen minutes explaining that while of course we don't know yet what the final bill, if any, will actually say, it looks to me like it would be constitutional.

I pointed out that (a) health care is commerce, in fact 1/7 of our national economy, and Congress's power to regulate commerce is very broad, and (b) as I understand it, the bill doesn't actually require people to buy health insurance; it just imposes a tax penalty on people who don't, and Congress is constantly using the tax system to impose incentives or disincentives on various behaviors, so that would be commonplace and would probably be OK. I also referred him to the analysis by my old professor Akhil Amar, which supports the bill's constitutionality. And I observed that lots of governments require people to buy things, including insurance (e.g., auto insurance), so that wouldn't be unheard of either.

I even explained why Senator Orrin Hatch's analysis claiming the bill would be unconstitutional is wrong. Hatch doesn't like the fact that the bill provides that if states don't set up "health insurance exchanges," the federal government will do it for them. But this makes the plan constitutionally better, not worse, because this way the states aren't required to set up health insurance exchanges; they have the option to do so or not.

Having said all that, I did say that the federal government would be doing something new, and that whenever that happens, people challenge it. Given that, as far as I know, the federal government has never done this before, I suggested that a constitutional attack on a federal mandate to buy health insurance would not be trivial or frivolous, but that, in my opinion, it would fail.

So out of the whole 20 or 30 minute interview, what got quoted? Naturally, the quote is:

"The federal government would be doing something new," says Jonathan Siegel, a constitutional-law scholar at George Washington University. "It's not a trivial claim" for the states to make. "It's not frivolous."

There you are. I am accurately quoted, and I can't put any fault on Newsweek, but it looks like I am attacking health care legislation, when I spent 99% of the interview defending it.

So watch what you say when you talk to the media. They only have space to quote one thought from you, and you never know which one it will be.

Wednesday, February 24, 2010

About Time

It's only been 52 years since Congress decreed that corporations are deemed to be citizens of their "principal place of business" for diversity purposes, so it was about time the Supreme Court got around to deciding what that means. The circuits have spent decades debating between the "muscle" test, which considers that the principal place is business is the place where the corporation does its main business activity, and the "nerve center" test, which locates the p.p.o.b. at the corporate headquarters. The statute has meant different things in different parts of the country all this time.

Finally, the Supreme Court has stepped in and settled the debate. The principal place of business is the nerve center -- the corporate headquarters. It was unanimous, and the Court even wrote a pretty good opinion, pointing out that the nerve center test has the virtue of being easier to apply, even though it will lead to occasional anomalies.

The only question is why it took so long!

Tuesday, February 23, 2010

Go Fish

Let me get this straight. As you're eating a filet o' fish sandwich at McDonald's, the company wants you to be thinking, "you know, what I'm eating used to be an actual fish, swimming around happily in the water somewhere. I'm eating something that used to be alive. And how would I like it if some fish were eating me?"

What else could explain the strangely macabre ad series that McDonald's is using to push this sandwich? A man buys a filet o' fish sandwich at a drive thru, but before he can take a bite, he gets a call on his cell phone from -- a fish! And the fish, which is stuffed and mounted on a wall, sings to him, "Give me back that filet o' fish! Give me back that fish! What if it were you hanging up on this wall? If it were you in that sandwich you wouldn't be getting this call!"

The man dumps his cell out the window and takes a big bite out of the sandwich, but is that what you would do? If you're not a vegetarian, presumably you've made your peace with eating fish and animals, but do you really want to think about it as you're eating?

Sheesh, what a weird ad.

Monday, February 22, 2010

Tax Protestor Redux

Was Andrew Joseph Stack, allegedly the man who flew a plane into a building containing IRS offices, a "tax protestor"? Some commenters on Saturday's post say yes, and some news organizations follow suit. But I disagree.

Of course, anyone is free to use any definition they want -- it's not as though these matters are regulated by some Tax Protestor Standards Board -- but in my view Stack lacked the essential qualities I have in mind when I call someone a tax protestor.

Let's consider the things Stack apparently did, as revealed in his alleged suicide note. As I noted on Saturday, he doesn't give all the details, so we don't really know what he did, but apparently he (1) tried to shield his income from taxes by creating a fake church, (2) failed to report distributions from his IRA as income, and (3) failed to report some of his wife's income, allegedly because of mistakes by his accountant. Does that make him a tax protestor?

There's a difference between a tax protestor and an ordinary tax cheat. Lots of people cheat on their taxes. Certainly, not reporting income does not by itself make someone a tax protestor.

In my mind, the first essential element of being what I call a tax protestor is that the person believes, or at least claims to believe, that what he is doing is lawful. Tax protestors claim that they're not evading taxes. They claim that there's no law requiring them to pay taxes, or that the tax law is unconstitutional, or that some obscure section of the tax code makes all domestic income nontaxable, or some such nonsense. So again, just failing to report income (as in items 2 and 3 above) doesn't qualify.

Second, in my view, tax protestor arguments are not just about pushing the envelope with regard to ambiguous loopholes in the tax code. When I call someone a tax protestor, I mean that their argument is so outlandish that no reasonable person could entertain it.

That's why I exclude Stack's escapade with the fake church. That comes closest to the flavor of tax protest -- Stack says he joined "a group of people who were having 'tax code' readings and discussions" and that they "carefully studied" the code and did everything necessary to make it legal not to pay taxes. That's the kind of thing that goes on at the absurd "seminars" offered by prominent tax protestors.

But what's different here is that the position doesn't seem nearly so outlandish as tax protestor positions. Again, it's hard to judge without knowing more detail about what Stack actually did. But churches are tax exempt. And the question of what constitutes a "church" is pretty complicated. The question of what constitutes a genuine religious belief is obviously delicate, and some organizations that initially arose in a secular context have successfully transformed themselves into tax-exempt religions (e.g., the Church of Scientology).

So either Stack believed that he and his buddies could successfully declare themselves to be a religion, or he was deliberately scamming. Either way, it's just not what I would call a tax protestor argument. There's a difference between trying to exploit one of the genuinely ambiguous loopholes in the tax system and having a crazy argument that most people don't have to pay taxes. I would feel the same way about someone who tried to claim most of their home as a home office, or who claimed their hobby expenses as business expenses, or who got involved in some sophisticated but phony tax shelter.

Finally, I would say that Stack's manifesto, and his life story as revealed in it, just don't have anything like the flavor of tax protest. Stack argues about whether it was right for the tax code, as changed in 1986, to forbid companies from treating software engineers such as himself as independent contractors. He says this change in the tax code made it impossible for him to succeed in business. He also says that one year he "decided that it would be irresponsible not to get professional help" with his taxes, so he gave all his information to an accountant and got screwed because the accountant failed to report some of his wife's income.

These are not the actions of a tax protestor. A tax protestor would be saying that income tax is entirely optional, that wages are not income, that you don't have to file because Form 1040 doesn't have an OMB control number, or crazy stuff like that. A tax protestor wouldn't get screwed by an accountant's mistake because a tax protestor wouldn't turn to a real professional for help with his taxes. A tax protestor wouldn't complain that the 1986 tax changes had doomed his business, because a tax protestor wouldn't recognize that there was any obligation to pay taxes to begin with.

As I see it, Stack may have tried to cheat on his taxes with his fake church scam. He may have failed to report income. And he certainly had a lot of disagreements with the tax code. But he's not what I have in mind when I use the term "tax protestor." Of course anyone else can use a different definition. But that's what I mean by the term.

As I remarked on Saturday, this result is somewhat ironic and shows that the term "tax protestor" is not a very good term. Someone who flies a plane into a building to protest his disagreement with income taxes is certainly what you would call a "tax protestor" if you didn't know the meaning that the term has developed. And someone who claims to agree completely with the tax code but who denies that it requires payment of income taxes would better be called a "tax denier." But for whatever reason, the term "tax protestor" has come to mean someone who has an outlandish theory about why the law doesn't require payment of income taxes. Stack may have been a tax cheat, but I wouldn't call him a tax protestor.

Saturday, February 20, 2010

A Real Tax Protestor

By now you've all seen the terrible story of the man, apparently Andrew Joseph Stack, who flew a plane into a building housing some IRS offices because he was furious over various tax issues.

Faithful readers know that I have an eccentric interest in tax protestors. Curiously enough, as I explained to a Dow Jones reporter yesterday, Stack was not really a "tax protestor" as that term is commonly used. The term "tax protestor" is generally used to refer to people who, for various absurd and ridiculous reasons, claim that most Americans have no legal duty to pay income taxes. Stack, by contrast, understood that the law required him to pay taxes; he was just damned upset about it.

As tax protestors themselves plaintively point out, the term "tax protestor" is not really apt for use in describing them. They are not "protesting" taxes; they are just claiming (absurdly) that the law doesn't require them to pay tax. They might more accurately be called "tax deniers," a term coined by Dan Evans on the analogy of "Holocaust deniers." But even Dan himself calls them "tax protestors." That's just the term most people use.

Now Stack was a real tax protestor. He took action to protest his tax obligations. His terrible story shows what can happen when the country is filled with people spewing hateful anti-government rhetoric. I'm sure most people who do so don't ever plan to use violence and don't even particularly wish it to happen. But you can only call government agents so many horrible names, of which "jack-booted thugs" is one of the less caustic examples, before some crazy people will go over the edge. Hate groups are indirectly responsible for these terrible crimes.

Stack's suicide note, incidentally, shows that while he was not, as I say, a "tax protestor" in the usual sense, he wasn't exactly an upstanding taxpayer either. He doesn't give all the details of his past tax problems, so one can't be sure exactly what happened, but it seems like (1) he tried to take advantage of the special tax treatment of churches by organizing a fake church, (2) he claimed to have no income in a year in which he cashed out an IRA, which counts as receiving income, and (3) he claims to have been screwed over by the tax law changes made in 1986. The second point sounds like it could be an honest mistake that might happen to anyone, but the first point sounds like a deliberate scam, so I'm less inclined to give him the benefit of the doubt (and that's before we consider that he later flew an airplane into a building full of innocent people). As to the third point, I'm not up on all the details of the tax change Stack complained about, but I will say that the 1986 law had a big impact on my own family, as it basically made the previous line of work of some members of the family impossible. But no one in my family flew an airplane into a building. They just shifted their line of work.

So Stack was a terrible man and his story has a terrible ending. But just in case you thought you'd seen the stupidest thing a tax protestor could ever say, surf on over to Larken Rose's website (he's a convicted criminal, tax protestor, and self-described anarchist), and check out this statement in which he discusses Stack and says "generally I have to praise him for what he did."

Friday, February 19, 2010

Tape Delayed Frustration

Michael Rosenberg of Sports Illustrated complains that it's impossible to enjoy the Olympics because so much of the coverage is tape-delayed (even though the games are being held in our own longitude this year) and it's impossible to avoid finding out the results of the events before seeing them.

I agree that this is a big frustration -- it's hard to enjoy a sporting event if you already know the result. I'm kind of upset at my favorite news websites for telling me results before I want to know them. But the same technology that brings us instant results could easily shield us from them if only editors would use a little intelligence.

It's simple: news websites, instead of splashing "Vonn Takes Gold" across their home page, should have a prominent link marked "Olympic Results." Then people who want to see results instantly wouuld only be one click away from them, and people who don't want results thrust upon them involuntarily wouldn't click the link.

Sheesh, is that so hard? News websites don't publish spoilers in the headlines of their movie reviews. When a story or a review contains a spoiler pretty much everybody follows the convention of giving a spoiler warning. So why not do it for Olympic results?

Thursday, February 18, 2010

Plagiarism's Defenses

Jack Shafer of Slate magazine has been on a campaign against plagiarists for a long time -- and a good campaign it is, too. I don't like plagiarists, either. I once nailed a GW student for outrageous plagiarism in our school newspaper (he had copied his entire column from a website).

But I think Shafer goes a little too far in his recent derisive analysis of plagiarists' excuses. Shafer provides a list of excuses and explanations that plagiarists commonly give -- that they lifted only a little, that the material lifted was so bland and boilerplate that it doesn't count, and so on.

Shafer is right that plagiarists typically come out with the same tired excuses every time. But where I think he goes too far is that Shafer seems to believe that plagiarism is what the law would call a "strict liability" offense, whereas I would say that, like most offenses, plagiarism has an actus reus (bad act) and a mens rea (required mental state).

Thus, excuse 7 on Shafer's list is "He didn't really plagiarize because the lifting wasn't intentional." Shafer seems to think that this excuse, even if proved, wouldn't constitute a defense (he describes his excuse list as "evasions" that "allow the plagiarist to displace the key question of whether his copy was adequately sourced with the more delectable conversation about the plagiarist's mental state").

I think it would. Suppose it really happened (as many plagiarists claim) that a writer accidentally got confused about who had written a sentence and included in his finished work a sentence lifted from somebody else (because, for example, he kept his research notes and his original work in the same file). That's bad, negligent work, but in the law we usually distinguish between negligent and intentional wrongdoing. If you got confused and accidently took someone else's physical property, believing it to be your own, you'd have to give it back, but you wouldn't have committed the crime of theft. A similar rule should apply to literary property.

One might argue that every writer has an absolute duty to avoid copying and that any violation of this duty is plagiarism, no matter how unintentional. But I would say that goes too far. We should distinguish between intentional and unintentional copying.

Therefore, I would say several other excuses on Shafer's lists aren't as irrelevant as he thinks either. They go to the credibility of the claim that copying was unintentional. If the text copied was bland and boilerplate, if the writer was working late, if the writer lifted only a little, all of these things are relevant to the likelihood that the copying was really unintentional.

So I wouldn't dismiss the excuses on Shafer's list as quickly as he does. In my view, the problem with some of these excuses is not that they wouldn't, even if proved, constitute real defenses, but that they are so often utterly implausible. A plagiarist says, "sorry, I kept my research notes and my own writing in the same file and I got confused about which was which," but the amount copied is so great that it's not remotely plausible that it happened by accident. The plagiarist is just lying. In my experience, the amount copied is usually a good guide to plausibility (and searching the accused's other writing can help, because most plagiarists are serial offenders).

If you drive negligently and kill someone, that's obviously a bad thing, but it's not nearly as bad as if you deliberately run someone down with your car. One is murder, the other not. Mental state matters.

I know it makes plagiarism cases messier if you have to worry about the accused's mental state. It would be simpler if we could just compare the texts, decide if too much was copied, and be done. But that's true in the law too. It would be simpler if we could just decide whether the defendant killed someone and not listen to his explanation of how it happened by accident. But justice demands that we distinguish negligent from intentional misbehavior.

Tuesday, February 16, 2010

Fixing Figure Skating

Figure skating needs to be fixed, because it is fixed: a recent study by Eric Zitzewitz, an economist at Dartmouth, suggests that figure skating judges are still favoring their own nation's athletes and trading votes with other nations in shadowy blocs.

Of course, everyone knew figure skating was rigged long before the famous controversy at the 2002 Salt Lake City winter Olympics, where judges apparently colluded to give the pairs gold medal to the Russians. It's been obvious for decades that figure skating scores reflected bias, favoritism, and Cold War politics.

The solution put in place after 2002 was to anonymize the judge's scores. Scores now appear without judges' names or nationalities attached. Which judge gave which score is secret. Organizers believed that the bad actors who try to rig the events would be less likely to bribe judges if they couldn't tell whether their judge had performed his or her part of the illegal bargain. But Zitzewitz's study claims that the fix isn't working.

My colleague Michael Abramowicz actually came up with a great solution for this problem some years ago. (Unfortunately his article is not easily available on line.) Michael specializes in dreaming up market-based mechanisms that -- he claims -- will solve social problems without the need for centralized human control. His figure skating idea is a real winner.

The solution is so simple: rate and rank each figure skating judge based on how close the scores he or she gives are to the average score given by all the judges. That is, suppose a given competitor gets an average score of 54 (or whatever, I don't understand the scoring scale anymore) from all the judges. An individual judge who gave that competitor a score of 54 would get a perfect rating for that competitor. A judge would gave a 53 or a 55 would get a very good rating. A judge who gave a 51 or a 57 wouldn't do quite so well, and so on, until a judge who gave an outlier score like 46 or 62 would get a really bad rating.

Then it's just a matter of cumulating the judges' ratings over time and rewarding them accordingly. Either their pay could be adjusted, or, perhaps even more important, only the top-rated judges could advance to judging higher levels of competition, particularly the Olympics. And bad judging ratings at the Olympics would mean those judges wouldn't get to judge in future Olympics.

The beauty of this scheme is that, without the need for some ultimate official to determine the ideal, "correct" score for any competitor, it will give figure skating judges a strong incentive to try to score each competitor the way they think the competitor really ought to be scored, because their goal will be to give a score that all the other judges will give too. It's a beautifully simple, self-correcting system that could, I think, really work to solve the problem of subjectivity in figure skating judging.

Monday, February 15, 2010

In the Post

Law Prof on the Loose had a letter in the Post yesterday -- you can see it here.

Sunday, February 14, 2010

Knit One, Curl Two

I think I could handle curling if it weren't for the brooms. If people want to play slow-motion shuffleboard on ice, that's fine. But the brooms have to go. They're what transform this so-called sport from something only slightly silly into an international punch line.

As I've remarked before, the Olympics are strangely compelling. They make us care deeply about sports we'd never even watch any other time -- track and field, swimming, speed skating, cross-country skiing. OK, maybe not cross-country skiing. Even during the Olympics, it's hard to care deeply about that. But at least we don't laugh at it. It looks like a tough, gritty, challenging sport, even if it's not exactly exciting to watch.

But curling is the synchronized swimming of the winter games. I'm sure there's all kinds of skill and subtlety to it that viewers can't appreciate. I'd probably fall down if I tried it. But that doesn't stop me from laughing when I see it presented as a medal sport in the Olympic games.

And the real killer is the brooms. Look, just launch the stones at the target. Then at least the game would be dignified. You could compare it to archery or riflery. It still wouldn't get big ratings, but at least it wouldn't be the butt of so many jokes. But with those brooms in there, you might as well have people blowing on the stones as they go down the ice. While wearing tutus. Lose the brooms, and you'd have something resembling a sport.

Thursday, February 11, 2010

More Snow Economics

It's a beautiful day outside and I would say we definitely could have held school today, no big deal. Maybe we would have needed a delayed start, but canceling classes altogether was a mistake. We're going to have to work harder down the road to make it up.

What about other businesses? Are they really hard hit by this week's snow? I would say some yes, some no. The key is whether customers will do extra business later to make up for this week's loss.

The little luncheonette in my school building will definitely suffer. It's lost a week's sales and people aren't going to be buying extra lunch next week to make up for it. On the other hand, grocery stores did extra business ahead of the storm and will do extra business afterwards. In fact, probably groceries get a net plus because more people stayed home and cooked instead of eating in restaurants. And I would think durable goods sales would hardly be affected at all. If you were in the market for a couch, you didn't buy one this week, but you're not any less in the market for it as a result.

So sellers of something that you either use immediately or go without are hurt. But sellers of lots of kinds of goods and services will be fine, I would imagine -- they'll have a slack week but get extra business next week.

Wednesday, February 10, 2010

Big Media v. Big Auto

Enough with the snow posts, I'm tired of it.

I was at the gym yesterday (today the gym closed at 10:00 am, of course, even though the Rite-Aid on the same block is open), and while there, I saw a CNN report on the Toyota recall. The thrust of it was that experts consulted by CNN question whether Toyota really understands what is causing the unwanted acceleration problem with its vehicles. CNN suggests that the problem stems from electronic devices causing interference with the engines' electronic controls. Toyota insists that the problem is mechanical and that they know how to fix it.

Watching the report, I got a sad sense of overhyping by CNN (the print version linked above is slightly more guarded than the video version I saw). It's difficult to know whom to trust. Toyota has an obvious incentive to say that it has solved the problem. So I appreciate that its statements have to be regarded with some suspicion, as CNN copiously pointed out. But what CNN didn't point out is that CNN itself also has distorting incentives. The story "Toyota doesn't really know what's wrong with its cars and is lying about it" attracts a lot more viewers than the story "Toyota has everything fixed -- just take your car in as per the recall and everything will be fine." So CNN has an incentive to promote those experts it can find who will say bad things about Toyota.

Watching the report, I got the sense that while the experts portrayed are skeptical of Toyota's statements, CNN was positively goading them into saying more than they really believed based on their expertise. It would have been more balanced if CNN had commented on its own incentives as well as Toyota's. It would have been nice if CNN made a statement about how many experts it consulted and whether their views were conflicting. Did every expert consulted by CNN think the electronic interefence theory was more probable than the mechanical pedal problem theory? Or did CNN cherry pick and only show those experts who had that view, ignoring those who thought Toyota had things right?

It's hard to know whom to believe, but I can't say for sure that I would trust CNN more than Toyota. CNN could have helped its own credibility with some added perspective on the trust issue.

Tuesday, February 9, 2010

After the Fall

A snow day is fun, a snow week is a pain in the ass. Snowmaggedon very considerately came on the weekend, which minimized disruption, but with that much snow it wasn't surprising that most workplaces (including GW and the federal government) were closed on Monday. It was enjoyable to get an extra day to putter about and work at home in a relaxed way.

But now it's Tuesday, and schools and the government are still closed (a lot of private workplaces seem to be open), and with another big storm arriving today, there's no telling when we might be able to hold classes again. We've endured about two feet already, and the forecast calls for another ten to twenty inches today and tomorrow. Is there no limit to this? Doesn't the snow get used up?

One day of canceled classes can be made up without much trouble, but a week of canceled classes, which now seems all too likely, is a real disruption in the schedule. We have a couple of snow days built into the schedule, but not five. I don't think we can cancel spring break, and the exam schedule is pretty sacred. There'll be a lot of doubling up and we might have to eliminate reading period. It's going to be tough on both students and faculty.

What would be interesting would be if we got, say, four inches of snow. Around here, four inches is usually regarded as a major calamity, something that brings life to a standstill. But have Snowpocalypse and Snowmaggedon toughened up even the weather wimps of DC? Would we shrug off four inches and get ourselves to work? Unfortunately it looks like we won't find out. Snoverkill is on the way.

Sunday, February 7, 2010

Snow Economics

NPR had a weather economist on the other day. Here's a bit of weather economics for you: have you ever noticed that the first business to shut down in a snowstorm is your gym?

Economics explains why. Other businesses make money by staying open. They have an economic incentive to tough it out if they can.

But your gym? It's got your money already. Staying open just costs the gym money. I don't know if the gym actually saves on salaries by shutting down -- perhaps not -- but it must save on heat, electricity, and wear and tear on the machines by keeping the place shuttered.

I know my gym is the wimpiest business in the neighborhood. Sure, they say it's a matter of safety when they close early in the snow. But I'm guessing there's a big dose of economics in there too.

Saturday, February 6, 2010

What is it?

As we conetemplate the 12 to 21 inches of the stuff under which we are buried, there's only one thing on the minds of Washingtonians this morning: snow. But what exactly is snow?

According to unimpeachable sources, snow is just water. That's right, it's made up of "crystals of frozen water, i.e., ice."

It seems a little incredible at first. Sure, water can take on surprisingly different forms -- it can be a gas, a liquid, or a solid. But snow? Snow sure doesn't look like water.

Still, so many sources agree on this point, that I guess I believe it. Probably you do too. But all the same, join me for this little thought experiment:

If I gave you a cup of water and said, "turn this into steam," you'd know what to do.

If I gave you a cup of water and said, "turn this into ice," you'd know what to do.

Now suppose I gave you a cup of water and said, "turn this into snow." Would you even know how to start?

I don't know about you, but asking me to turn water into snow would be like asking me to turn straw into gold. I could fool around with water all day and you'd never see a single snowflake.

A couple feet of the stuff is pretty. But it sure doesn't look like water to me.

Friday, February 5, 2010

Hold On

If reports are to be believed, Senator Richard Shelby has placed holds on all of President Obama's currently pending nominees, apparently because he didn't get a couple of earmarks for Alabama.

This kind of behavior is an example of how absurd things are getting in the Senate. It's bad enough that any 41 Senators can block the other 59 from doing just about anything. But a hold allows one Senator to wreak havoc with the Senate's schedule.

One might ask, why doesn't the majority leader simply stop allowing holds? Unlike the 41-Senator filibuster, which at least has a firm basis in the Senate's rules, the "hold" practice is an informal custom. Originally, holds were designed as a courtesy to Senators who had a scheduling conflict with an important vote, but they've metastasized into a constant stalling tactic. So why not stop recognizing them?

The problem is that the Senate does almost everything by unanimous consent. A hold, while not formally recognized in the rules, amounts to a threat to conduct a filibuster, which is recognized. It particularly amounts to a threat not to consent to a unanimous consent request.

So when the majority leader seeks unanimous consent that the Senate vote on a nomination at a particular time, the "holder" can object. Then the majority leader would have to move that the Senate take up the nomination, and that motion could be filibustered. And while the majority leader might easily have the votes to invoke cloture, cloture doesn't result in a vote; it just starts the clock on thirty hours of debate. Then there's a vote. And that's just the vote on the motion to take up the matter. Then another cloture vote is needed to bring debate to a close, following which debate takes another thirty hours. So the "holder" is threatening that if he or she is not appeased, the matter will eat up nearly a whole week of precious Senate calendar time.

So as usual, what is really needed is a fundamental reform of the Senate's rules. The House of Representatives is famous for allowing individual members and the minority party as a whole too little influence on what happens. But the Senate allows too much. One member can tie the whole body up in knots. The result is too much appeasement of minority interests.


D.C. is bracing for a potentially "historic" snowstorm, so last night I thought I'd pop over to the grocery store and pick up food for a couple of days.

So did everybody else. I tried my little neighborhood store, and it was picked clean. No milk, no beef, no chicken. So, I went to the big store, and it was practically the same thing! And lines of 10 or 15 people at every register, each with a cart filled to overflowing. So I tried again this morning. A bit better: but no quarts of milk, no half gallons. I had to pick up a gallon -- and there weren't many of those left. There was some beef and chicken. I took what I could find and counted myself lucky.

Washington can barely deal with two inches of snow, and we're expecting up to two feet. People are skittish like its Y2K all over again.

Wednesday, February 3, 2010

More Smart People Being Stupid

The Consumer Product Safety Commission is thinking of fining Toyota for reacting too slowly to complaints of accelerator problems, but the maximum fine it can impose is $15 million. Former administrator Joan Claybrook would like to see that amount increased to $100 million.

Even that amount would hardly make a difference. Toyota is likely to spend about $900 million on its recall, its lost sales are costing it $155 million per week, and the damage to the company's reputation will surely add billions more over the coming years. If those kinds of numbers weren't already a sufficient incentive to avoid this mess, I don't think the prospect of an extra $100 million fine would really have made much difference, although it would always be nice for the U.S. government to get the revenue.

The problem is cultural. I'm sure Toyota saved a few million here and there by not being careful enough in its design and testing phases to avoid the problem it's now having, and no one listened to the people who said wait a minute, we're saving a million now but we're running a risk that could cost us billions. It's the same business spirit that encouraged making money through mortgage-backed securities, which looked great until the risks almost destroyed the entire economy, or that encourages newspapers to rush stories into print to make a quick splash without sufficiently considering the tremendous harm that can be caused by reputational damage, or that encourages development that makes money now by not caring about wetlands erosion but risks disasters like Katrina.

There's a place for bold risk-taking in the world of business, but there's also a place for caution. The smart people who run these companies need to create incentives that don't just measure how much money the company made this year, but how much risk it took on too.

Tuesday, February 2, 2010

Weather Wimps

Schools are closed in several DC area counties today because of snow.

Today is Tuesday. It snowed on Saturday. That was more than two full days ago.

Where I come from, if it stopped snowing in the late hours of Sunday (say, at 11:30 pm Sunday), there would be some head-shaking if schools were closed on Monday. If it stopped snowing at 11:30 pm Saturday and schools were closed on Monday, there would be outrage. And if it stopped snowing at 11:30 pm Saturday and schools were still closed on Tuesday, people would get fired.