Sneaking Suspicions

Archives--January 20-26, 2002 (Week 3)

Commentary from a practical perspective

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This page includes posts from the site's third week, January 20-26, 2002 in the usual reverse order.

January 26, 2002

Showing respect

I've enjoyed reading the comments of several bloggers on marital relationships, including Andreas, Natalie Solent, Shiloh Bucher, Moira Breen, and Joanne Jacobs. They've discussed sharing household duties and the ways in which men and women describe their marriage to others.

I'll just chip in with this short note.

One thing that's always annoyed me is when guys refer to "the wife."

That phrase really grates on my ear.

To me, it just doesn't show the proper respect for their wife or their marriage. I don't believe that saying "my wife" displays a misguided possessiveness. I consider it an appropriate measure of love and consideration.

Referring to "the wife" often seems to be an indicator of eventual difficulties, and even divorce.

Unfortunately, it's happened often enough that I think there's something to it.

January 25, 2002

Here a penny, there a billion or two

From a political perspective, fuel taxes are among the least painful ways to raise billions of dollars. Out of each $1.00 paid at the gas pump, about a third is actually state or federal tax money. Every so often the petroleum industry tries to remind us of that fact with little stickers at the pumps, but it usually goes unnoticed.

For all you gas-guzzling SUV drivers out there--thanks very much!

This user-pays system works pretty well, until there’s a recession. Although the rate of the fall in fuel tax revenues is rarely as steep as other taxes, such as sales or income taxes, it still falls. In addition, the states depend on federal fuel taxes for a sizable portion of their transportation dollars, and so they face a double whammy.

The U.S. Treasury Department issued new estimates yesterday that will hit hard:

State road-building budgets across the nation, already confronting recession-year deficits, will lose $9.1 billion in federal transportation money next year because of plummeting gas tax collections....

Note that the $9.1 billion is just in federal funds. There will likely be similar drops in state fuel taxes in the coming year or so. These revenue losses will have an immediate impact on the states’ ability to keep up with the demand for road improvements and other transportation projects.

According to the WaPo story, for example, Virginia projects a loss of $211 million in federal funds, and Maryland estimates it will take a 150 million dollar hit. My own client, DelDOT, will lose between $20 and $30 million the state planned to have available in federal money for its program for next year.

To give you a sense of proportion, DelDOT spends about $1.5 million per day on all aspects of transportation, in capital funds, debt expense, and operating costs. The loss of federal funds alone is about equal to about three weeks out of a full year’s expenses. At that level, the agency staff are staring at delays in critical projects and other painful choices.

Another way to think about this issue is to figure out how much the state gas tax would have to be raised to make up for the $9 billion loss in federal assistance. For Delaware, it’s about 5 or 6 cents per gallon. Your own state’s estimates will vary, but I’d be surprised if it didn’t equal at least 4 cents per gallon for each state.

For several years, most states have been reluctant to raise their own gas taxes. The money was rolling in with the good times, after all. In addition, in some parts of the U.S., the states don’t usually want to raise their tax rate unless they see that their neighboring states are joining them. They’d catch too much grief from the gas station owners near the borders.

That reluctance may change, for two reasons. First, there have been wide swings in gasoline prices at the pump, especially in the last two years, compared to the relatively stable prices of about 10 years ago. If this market environment continues, a tax increase of a few pennies will be harder to notice. Second, when the loss of federal funds is this large, the state legislators may discover that their brethren in the next state are having similar ideas about where to find the money.

Watch the next fifteen months or so. You can say you read it here first.

And if you're in the mood, here's this week's golf column, and my latest book review.

January 24, 2002

The Fifth Dimension shows us how it should be done*

Virginia Postrel quoted approvingly from More Than Zero's recent discussion of the derivatives market and the limited utility of some forms of financial regulation. The essay correctly points out the difficulties of successfully writing a regulation to compel either the market or its investors to act according to a widely accepted notion of financial propriety. The better option is to adopt the time-honored methods of the SEC:

[T]he answer is not to add one more vaguely described activity to the long-as-your-arm list of "no-nos", but to shine an ever brighter light on the books and let the buyer discriminate.

Full disclosure can work in other beneficial ways to help drive public policy. Because it provides easy access to information, the Internet is a great tool to bring the real results of political choices out into the open, and potentially alter the debate. Today’s story in the Washington Post concerning farm subsidies is a great example.

The Environmental Working Group (EWG) developed a database showing exactly who received how much in farm subsidy payments from 1996-2000. They published the list on their website, and they claim that to date the database has received well over 14 million hits. I took a look today at the Delaware segment of the report, and the money paid out is startling.

The EWG database is having an effect:

Embarrassed by revelations about the amount of money some farmers are reaping from federal farm programs -- information recently made available on the World Wide Web -- some lawmakers are calling for much lower limits on payments to individual recipients.

This kind of story shows that there’s no need to have "cooked the data" in order to support a political argument.

Sometimes the facts just sit there, waiting to be discovered and shared with everybody.

*I refer, of course, to one of their greatest hits, "Let the Sunshine In."
(I think I still have my copy of the 45 in the basement somewhere.)

January 23, 2002

So it’s the thought that counts? I don’t think so

Glenn Reynolds brought up the Bellesiles controversy again today, referring to a lengthy Chicago Tribune piece. Staff reporter Ron Grossman reviewed the developing story about the Emory University history professor who can’t seem to back up his claims that Colonial-era gun ownership was a rarity, as well as the separately compelling saga of a psychology professor caught faking her data.

Bill Quick’s comments on the Grossman article highlighted this quote:

Paul Finkleman, a law professor at the University of Tulsa, says Bellesiles' book remains an important contribution, despite its critics.

"In the end," Finkleman said, "I don't think it matters if he cooked the data."

I'm sometimes accused of being cynical, and often reply that I’m just being a realist. Even so, I’m having a hard time believing that a law professor would actually say that, especially when the data relate to an interpretation of a constitutional amendment. The quote is so far removed from any standard of intellectual honesty, so blatantly wrong, I’m just stunned.

In an update to his original note, Reynolds said:

Finkleman has said that he doesn't think he said that, or that if he did, it's out of context. (This isn't as weasely as you might think: his argument is that the nonquantitative parts of Bellesiles' argument might be true, even if the quantitative data don't support them). Anyway, Finkleman is making
clear that he does not
take the position (taken by some Rigoberta Menchu defenders) that the truth is less important than a good story.

Even if Finkleman was quoted out of context, and he was actually trying to make a distinction between false data and the "nonquantitative" parts of Bellesiles' argument, I still have a problem with his position.

Consider, for example, some of the rules of intellectual honesty that lawyers must obey.

Here’s a relevant and straightforward requirement, for which disbarment is a possible punishment:

A lawyer shall not … falsify evidence, [or] counsel or assist a witness to testify falsely….

That’s taken directly from Rule 3.4 of the Delaware Lawyers’ Rules of Professional Conduct, which are based on the ABA’s Model Rules.

In addition, there’s a common intellectual honesty standard in the rules of civil procedure. It’s called Rule 11 in Delaware court rules, Federal rules, and in many other jurisdictions. It’s quite a bit wordier than Rule 3.4, but it stands for the same principle:

By representing to the Court (whether by signing, filing, submitting, or later advocating) a pleading, written motion, or other paper, an attorney ... is certifying that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, ... the allegations and other factual contentions have evidentiary support or, ... are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and ... the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief.

The University of Tulsa’s student code of conduct would also seem to differ from whatever was intended by this odd little quote:

[I]t is incumbent upon each University of Tulsa student to:

  • Respect order, fairness, morality, and the rights of others.
  • Obey the laws of the land and the regulations, rules, and policies of the University.
  • Conduct his or her activities with high regard for the ideals of higher education, which include personal honor, academic honesty, and intellectual freedom.

From everything I've read about Bellesiles' book, including Reynolds' articles, it seems to me that the whole point of Bellesiles' research was to find a documented historical basis to support a particular position about gun control, by looking at the societal context in which the Second Amendment became part of the Bill of Rights.

If Bellesiles "cooked the data," how could his work possibly remain useful or "important," even for a "non-quantitative" argument about gun control? Why wouldn't the questionable data infect whatever merits may be found among the rest of the book?

Finkleman's statement, however he's explaining it, just doesn't make sense. It too easily brushes aside a fundamental requirement for intellectual honesty for both historians and lawyers.

January 22, 2002

Cohen, Roberts, and Schranck agree on taxes

It’s not often that one sees noted newspaper columnists Richard Cohen and Paul Craig Roberts agreeing with each other. It’s even more rare that I find myself in agreement with both of them.

But it can happen, and did.

The Washington Times published Roberts’ piece on Diminishing Property Security on January 21. Roberts makes the following relevant points:

[T]he percentage of voters with income tax liability is shrinking. Currently there are about 129 million taxpayers, but the top 25 percent of income earners — 32 million people — pay 83 percent of the total personal income tax collected. The remaining 75 percent of taxpayers — about 97 million people — bear only 17 percent of the income tax burden, and 70 million voters have no income tax liability whatsoever.

Forty-three percent of those who file income tax returns actually benefit from the income tax as they collect refundable credits in excess of their tax liabilities.

With 167 million voters with little or no income tax liability and 32 million burdened with 83 percent of the total, it is unlikely that successful Americans can escape their situation as an exploited minority. They are outvoted by 5-to-1 . . . .

Today’s Cohen column in the Washington Post continues in this vein, concerning our friends at Enron:

All the years I've been in business, which is to say working for a living, I have paid federal, state and local taxes -- and I resent, loathe and even hate anyone who manages not to.

I am talking Enron here. It paid no federal corporate income taxes in four of the past five years.

It is simply not right that Enron paid no taxes while, just to pick an example, its now-broke former employees did.

For so much of what Enron and Arthur Andersen did, the phrase it is not right seems apt. . . . [T]his is not a scandal about a single company, but a reflection of a society in which the rules you think apply to everyone actually don't. Most people pay taxes, but some don't -- and the ones who pay subsidize the ones who don't.

I suppose you can call that a business philosophy. I call it a rip-off.

So, Richard Cohen argues that it’s not fair that some people pay no income tax, while others must pay.

And, Paul Roberts argues that it’s not fair that some people pay no income tax, while others must pay.

Their arguments help buttress my modest proposal, appearing here on January 18, suggesting a new Alternative Minimum Tax, in which everyone pays at least 1% of Adjusted Gross Income, no matter what.

Adopting the new AMT would alleviate the fundamental fairness concerns so gracefully described by Cohen and Roberts, now wouldn’t it?

Megan McArdle, whose Live from the WTC blog is a delight to read, took off after Cohen a bit about his column, largely because she felt his ire was primarily directed at corporate income tax avoidance. Last week McArdle posted a fine rant about the corporate income tax, arguing for its total abolition.

I'm not challenging the strength of McArdle's arguments about corporate taxation. I just can't help noticing that Cohen's points are far more broadly stated than the question of whether or how to tax business entities.

I take Cohen at his word when he says he resents "anyone who manages not to" pay federal, state, or local taxes. The term "anyone" is not usually limited to corporations. I also take Cohen seriously when he says,

Most people pay taxes, but some don't -- and the ones who pay subsidize the ones who don't.

(Emphasis supplied.)

Roberts’ taxpayer/voter data more than proves Cohen’s point that the current income tax code is

a reflection of a society in which the rules you think apply to everyone actually don't.

So let’s come up with an income tax system in which everyone pays. Shall we?

January 21, 2002

Environmental Group Irresponsibly Frightens Parents

Apparently things are getting back to normal, what with the current success of the war effort making people relax a bit. That’s not necessarily a good thing.

Today’s Washington Post carries a story for an environmental group about school siting and toxic wastes.

I use that verb deliberately.

The story’s opening paragraph is instructive. It follows a model used far too often in the past:

Hundreds of thousands of children throughout the country are attending schools that were build on or near toxic waste sites, putting them at increased risk of developing asthma, cancer, learning disorders and other diseases linked to environmental pollutants, according to a new study.

Well. That ought to make mom and dad spew their morning coffee. Good job!


Lois Gibbs, who first made headlines with the Love Canal fiasco, is now part of a new environmental coalition called the Child Proofing Our Communities Campaign. The group published a study that linked school locations to Federal Superfund or state-identified contaminated sites. According to the story, they seek

guidelines to prohibit schools from being built close to contaminated sites.

I’m all for being careful about school siting decisions. I’ve worked on them a bit. A "level one" environmental evaluation is done, similar to every routine business or commercial lending requirement nowadays for land acquisition. The decision process goes on from there. The fact that there might be a contaminated site nearby is only one part of the analyis. That one fact simply shouldn’t be used as an automatic veto of any school siting decision.

In fact, the open space that’s needed for a school can be a good use for a Brownfields initiative. At some former industrial sites, what I refer to as the ones contaminated with a 19th Century chemical soup, the only effective means of dealing with the parcel is to cap it with an impervious material. Topsoil or other material can go on top of the cap, and the parcel is then restored for other purposes, such as park space or other open space needs. A school athletic field is not necessarily out of the question, because of the impervious cap, and the area’s former status as a wasteland is returned to something useful for the community.

In place of this balanced approach to land use, we now have this study, with its careful use of inflammatory language and misguided use of statistical information.

Here’s what I’m talking about.

Ms. Gibbs announced,

"Schools should be a place for learning, not a place that makes kids sick."

Fine. What’s your point? My kids brought home various ills from school all the time—usually viruses from other kids, and the occasional lice infestation. They are at far greater risk from their fellow students than any scuzzy substance 10 feet underground and a half-mile away.

Deep into the story we see this:

The study did not examine in detail the situation at any of the schools listed and offered no evidence of a direct link between the location of the schools and health or developmental problems experienced by their students.

Well, that certainly makes sense. Why bother looking at each site, carefully considering the particular situation to see if there’s any real risk? It’s so much easier to assume that each child is being sprayed with lead and mercury compounds as they walk past every Superfund site.

The group also showed a keen sense of actual risk, by its selection of a wildly inappropriate zone to establish a false area for concern:

The coalition also chose to use a half-mile radius as the cut-off for defining whether a school was "near" a contaminated site, reasoning that children who live that distance from school generally walk to class.

Interesting choice of terms, "reasoning." The group didn’t consider any of the facts about any of the sites other than their existence and location, and offered no evidence of a link between location and student health problems. So how could they use a half-mile radius with any statistical confidence that it would serve as a proxy for risk? If reality is not as important as pushing an agenda, it makes perfect sense.

The story made this stunning, unintentional concession:

[T]he study notes there has been a sharp increase in the number of children afflicted with asthma, cancer, diminished IQs and learning disabilities during the past two decades and that experts say that children exposed to harmful toxins at home, at play or at school are particularly at risk to those health and developmental problems.

Could someone please tell me where kids spend their time when they are not at home, not at play, and not at school? After I take into consideration those three locations, what’s left? Riding in the car with mom, perhaps near a Superfund site? Shouldn’t we therefore move all roads at least a half-mile from these locations, to eliminate the risk? Geez.

The Coalition made a valiant effort to create a sense of guilt:

"During a critical period of their growth and development, children spend a large part of the day at school," the report says. "To needlessly place them in settings that heighten risk of disease or hyperactivity or lower IQ is therefore irresponsible."

With all due respect, to needlessly frighten parents about alleged environmental risks to their children, by simplistically linking location to harm without any evidence of real risk, is therefore irresponsible.

January 20, 2002

The defense can't rest, at least not during the trial

The Washington Post takes a shot at the State of Texas today regarding a butt-ugly capital murder case. The editorial barks at the state’s request for U.S. Supreme Court review of a 5th Circuit decision to grant habeas corpus relief to Jerold Burdine, because his counsel, Joe Cannon, slept during portions of Burdine’s trial. As the Post put it,

Certain behavior by lawyers is so egregious that a defendant should not have to establish more than that it occurred to render a conviction fatally defective. Texas’s protestations that sleeping does not rise to that level should not prompt Supreme Court review—just angry laughter.

The facts in this brutal murder case aren’t quite so starkly favorable to the defense as the Post editorial might make one assume.

On a few occasions, Burdine sometimes nudged Cannon to stay awake during the six-day trial. Cannon managed to stay awake long enough to argue vehemently about his client’s confession, and remained active in other critical respects during the trial. Despite Cannon's efforts, the confession was admitted into evidence.

Neither the judge nor the prosecutor noticed Cannon nodding off while the prosecutor was putting on his side of the case, but the clerk of the court did, along with a few jurors. Nonetheless, Burdine complimented Cannon for the quality of his representation as the trial concluded.

Eleven years and several appeals after his original death penalty sentencing, Burdine changed his mind about how good a job Cannon did, by finally making an issue about Cannon’s sleeping. Even then, Burdine’s new counsel managed to wait until the 5th Circuit’s panel decision ruled against him before he let it slip that Burdine knew all along about Cannon’s lapses into dreamland. During the en banc argument thereafter, Burdine’s new counsel had to deal with that particular inconvenient fact.

Even so, the 5th Circuit’s en banc decision was correct, even as they hastened to limit it to the peculiar circumstances of Burdine’s case. Judge Benavides noted:

An unconscious attorney does not, indeed cannot, perform at all. . . . The unconscious attorney is in fact no different from an attorney that is physically absent from trial since both are equally unable to exercise judgment on behalf of their clients. Such absence of counsel at a critical stage of a proceeding makes the adversary process unreliable, and thus a presumption of prejudice is warranted.

Judge Higginbotham, concurring in the judgment, made a practical assessment:

Indeed, a lawyer asleep in the courtroom is more harmful than one who is physically absent. A message is sent to the jury when a defense counsel sleeps, sometimes as long as ten minutes, the prosecutor continues to present evidence, the judge does nothing (says he didn't see it)--all the officers of the court pay it no mind. This is just a "slow plea": going through the motions is the message. That is what happened. It will not do to dance away from the facts.

Judge Barksdale and three other judges argued in dissent that this was one of those "Bad facts make bad law" situations. In addition, they suggested the decision created a new requirement:

Finally, the rule imposes a new obligation on the States in our circuit. . . . If [defense] counsel closes his eyes even momentarily, the trial judge or prosecutor had best stop the trial and inquire, "Are you awake?"

Well, yes. This is a capital case, after all.

When trying to execute someone for a heinous crime, the State has to make sure the trial is fair. The Court and the prosecutors should both make sure that the defense counsel meets the obligation to provide a zealous defense.

It’s obviously annoying that Burdine could gain another chance to avoid the ultimate penalty because his own counsel nodded off the first time. Just don’t let it happen again.

If the judge and the prosecutors pay more careful attention to what’s going on in the courtroom, Mr. Burdine should eventually find himself nodding off, this time with the State’s injected assistance.

Contact Information:

Fritz Schranck
P.O. Box 88
Nassau, DE  19969

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Official small print disclaimer: This is, after all, a personal web site. Any opinions or comments I express here are my own, and don't necessarily reflect the official position of my work as a government attorney or any of my clients.

That fact may become obvious later on, but it needs to be said here anyway.

Frederick H. Schranck 2002