General Motors, Chrysler, and the $60 Billion “I Told You So”

Remember when GM was too big to fail? When “bankruptcy [was] not an option”? When President Obama “didn’t want to be in the car business”? I guess those are now the good ole days. The only two American automobile companies that allowed the government to help them are now out of private business, being taken over by the UAW and the governments of Canada and the United States. Stockholders are effectively zero’ed-out and secured bond-holders find their holdings to be very insecure, indeed.

To argue that the US government (the largest new stakeholder in GM) won’t interfere with business decisions is already fiction, as they imposed a new CAFÉ standard guaranteed to suffocate GM under any condition of ownership. To argue that the UAW (the second largest new stakeholder) will help GM regain market-share is to ignore the history of heavily unionized American industries – steel, textiles, railroads, and so on. We should not forget that the largest and fastest growing union field is that bastion of efficiency and cost-effectiveness, government itself.

Chrysler is selling itself to Fiat (with the US government and the UAW as the two largest US stakeholders). In view of Daimler’s inability to make profitable cars with the help of the UAW (both GM and Chrysler make profitable cars in Europe and Asia), I am hardly breathless over the prospects of Fiat to do so.

This leaves Ford to compete against two national governments, $60 billion in US bailout money, an offshore owner, and its own union. Everyone who thinks this is going to be a fair fight, fly around the room. Same odds.

The point of this whole exercise is that, back when it all started – back when “bankruptcy wasn’t an option” – bankruptcy was the only option. When a firm fails to meet the market, it must be allowed to fail. Creative destruction. The unproductive must be allowed to decay so that those resources – those workers and raw materials, designers and engineers, those investors and credit lines – are freed up to join productive entities in the economy.

The lessons here are not that well hidden, but will nonetheless be ignored. The primary problem with the American automotive industry is that it can’t afford to pay two workforces – the one works every day and the one that used to. That, and the fact that the world won’t pay $27 an hour plus benefits to put a bolt in a hole.

Lesson number one is that worker pensions must be made portable – they go with the worker. 401(k)’s do that, and this must be the pattern for all pension funds. Corporations simply cannot afford to pay everyone for the duration of their natural lives. Healthcare must be divorced from employers. Again, only insurers are in business for the purpose of insuring people.

Lesson number two is that, even though American workers are the most productive in the world, they aren’t allowed to be (union work rules) and, even at unrestricted levels of productivity, are over compensated. And yes, that goes all the way up to the boardroom (many of which should be cleared out with a CS grenade anyway).

There are some structural things that should be done, but most are too wonky to go into here (e.g., making stock options currently expensed; holding all executive stock holdings in escrow for five years after separation, introduce another cycle of discouraging vertical integration, etc). Mostly, American business needs to refashion itself for the 21st century reality of a globalized economy – which America should be ideally positioned to exploit. One would hope that our institutions of higher learning would be catering to this need (and … in the other hand, see which one fills up first).

Whereas the current administration sees a crisis as an opportunity to cram otherwise untenable legislation down our throats, I would prefer us to use it as a learning experience. Guess which one will fill up first.

Sonia Sotomayor: a Primer

Background

Ms Sotomayor was born in the Bronx (June 25 1954) of Puerto Rican descent, graduated with an AB, summa cum laude, from Princeton in 1976, and received her JD from Yale Law in 1979, where she was an editor at the Yale Law Journal. She worked as an Assistant District Attorney in New York for a time before entering private practice in 1984. Ms Sotomayor was nominated to the US District Court for the Southern District of New York by President George HW Bush in 1991 and was confirmed in 1992.

As is not uncommon at this judicial level, President Bush consulted with Senator Daniel Patrick Moynihan (D-NY) and Senator Charles Schumer (D-NY) as to nominees that they could both agree on, and Ms Sotomayor’s name came up through that process. During her tenure there, she ruled on two noteworthy cases. In 1995, she issued the preliminary injunction against Major League Baseball which ended the 1994 baseball strike, and in 1996 Ms Sotomayor issued a ruling allowing the Wall Street Journal to publish Vince Foster’s suicide note.

In 1997, she was nominated by President Bill Clinton to the US Court of Appeals for the Second Circuit, after more than a year, she was confirmed and joined the court in 1998. Ms Sotomayor was an Adjunct Professor at New York University School of Law from 1998 to 2007, and has been a lecturer-in-law at Columbia Law School since 1999.

Ms Sotomayor has been a perennial mention for elevation to the Supreme Court since her elevation to the Federal Court of Appeals. If confirmed, she would be the Court’s first Hispanic and third woman (the first two being now-retired Justice Sandra Day O’Connor and current Justice Ruth Bader Ginsburg).

Relevant Record

Below are listed the cases upon which Ms Sotomayor ruled that found their way to the Supreme Court of the United States.

Intellectual Property: Tasini v New York Times, et al, 972 F. Supp. 804 (1997)

As a district court judge in 1997, Ms Sotomayor heard a case brought by a group of freelance journalists who asserted that various news organizations, including the New York Times, violated copyright laws by reproducing the freelancers’ work on electronic databases and archives, such as Lexis/Nexis, without first obtaining their permission. Ms Sotomayor granted the publishers summary judgment, holding, inter alia, that the databases reproduced and distributed the authors’ works, in §201(c)’s words[1], “as part of … [a] revision of that collective work” to which the authors had first contributed.

The Second Circuit reversed, granting the authors summary judgment on the ground that the databases were not among the collective works covered by §201(c). New York Times, et al applied for a hearing before the US Supreme Court, and certiorari was granted. The case was argued on March 28 2001 and decided on June 25 2001. Justice Ginsburg, wrote the opinion of the Court, affirming the Second Circuit (i.e., upholding the reversal of Ms Sotomayor), in which Chief Justice Rehnquist, and Justices O’Connor, Scalia, Kennedy, Souter, and Thomas, joined. Justice Stevens wrote a dissent, in which Justice Breyer joined. Ms Sotomayor was reversed 7-2.

Civil Rights: Malesko v Correctional Services Corp, 299 F.3d 374 (2000)

Writing for the court (Second Circuit) in 2000, Ms Sotomayor supported the right of an individual to sue a private corporation working on behalf of the federal government for alleged violations of that individual’s constitutional rights. Reversing a lower court decision, Ms Sotomayor treated the complaint as raising claims under Bivens, which allows suits against individuals working for the federal government for constitutional rights violations[2], could be applied to the case of a former prisoner seeking to sue the private company operating the federal halfway house in which he suffered a heart attack he claims was due to policy implemented by the corporation.

Mr Malesko appealed to the Supreme Court and certiorari was granted, the case being argued on October 1 2001, and decided on November 27 2001. The Court reversed Sotomayor, saying that Bivens could not be expanded to cover private entities working on behalf of the federal government. Chief Justice Rehnquist delivered the opinion of the Court, in which Justices O’Connor, Scalia, Kennedy, and Thomas joined. Justice Scalia filed a concurring opinion, in which Justice Thomas joined. Justice Stevens wrote a dissenting opinion, in which Justices Souter, Ginsburg, and Breyer joined. Ms Sotomayor was reversed 5-4.

Health Insurance: Empire Healthchoice Assurance Inc v McVeigh, 396 F.3d 136 (2005)

In 2005, Ms Sotomayor ruled against a health insurance company that sued the estate of a deceased federal employee who received $157,000 in insurance benefits as the result of an injury. The wife of the federal employee had won $3.2 million in a separate lawsuit from those whom she claimed caused her husband’s injuries. The health insurance company sued for reimbursement of the benefits paid to the federal employee, saying that a provision in the federal insurance plan requires paid benefits to be reimbursed when the beneficiary is compensated for an injury by a third party.

Empire appealed and certiorari was granted. The case was argued on April 25 2006 and decided on June 15 2006. In an opinion written by Justice Ginsburg, and joined by Chief Justice Roberts, and Justices Stevens, Scalia, and Thomas, the Court found that the Government’s important interests in attracting able workers and assuring their health and welfare do not warrant turning into a discrete and costly “federal case” an insurer’s contract-derived claim to be reimbursed from a federal worker’s state-court-initiated tort litigation. This case cannot be squeezed into the slim category Grable[3] exemplifies. Justice Breyer filed a dissenting opinion, in which Justices Kennedy, Souter, and Alito joined. Ms Sotomayor was upheld 5-4.

Finance: Dabit v Merrill Lynch, 395 F.3d 25 (2005)

In a 2005 ruling, Ms Sotomayor overturned a lower court decision and allowed investors to bring certain types of fraud lawsuits against investment firms in state court rather than in federal court. The lower court had agreed with the defendant Merrill Lynch’s argument that the suits were invalid because the Securities Litigation Uniform Standards Act of 1998 required that such suits be brought only in federal court.

Merrill Lynch appealed and certiorari was granted. The case was argued on January 18 2006 and decided on March 21 2006. The Court found that federal, not state, law has long been the principal vehicle for asserting class-action securities fraud claims. Dabit’s holder class action is distinguishable from a typical Rule 10b-5 class action only in that it is brought by holders rather than sellers or purchasers. That distinction is irrelevant. The plaintiffs’ identity does not determine whether the complaint alleges the requisite fraud, and the alleged misconduct here – fraudulent manipulation of stock prices – unquestionably qualifies as a fraud “in connection with the purchase or sale” of securities as the phrase is defined in SEC v Zandford. The Court vacated the Second Circuit and remanded the case to the lower court, which allowed a pathway to federal court. Justice Stevens delivered the opinion of the Court, in which all other Members joined, except Justice Alito, who took no part in the consideration or decision of the case. Ms Sotomayor was reversed 8-0.

Taxes: Knight v Commissioner, 467 F.3d 149 (2006)

Under IRS Code, individuals may subtract from their taxable income certain itemized deductions, but only to the extent the deductions exceed 2% of adjusted gross income. A trust may also claim those deductions, also subject to the 2% floor, except that costs incurred in the administration of the trust, which would not have been incurred if the trust property were not held by a trust, may be deducted without regard to the floor.

Michael J Knight is the trustee of the William L Rudkin Testamentary Trust, a Connecticut Trust. In 2000, Mr Knight hired Warfield Associates Inc, to provide advice with respect to investing the Trust’s assets. On its fiduciary income tax return for 2000, the Trust reported total income of $624,816, and it deducted in full the investment advisory fees paid to Warfield. After conducting an audit, the Commissioner of Internal Revenue found that these investment advisory fees were miscellaneous itemized deductions subject to the 2% floor. The discrepancy resulted in a tax deficiency of $4,448.

The Trust appealed to the United States Court of Appeals for the Second Circuit, where Ms Sotomayor upheld the lower court. In determining whether costs such as investment advisory fees are fully deductible or subject to the 2% floor, “directs the inquiry toward the counterfactual condition of assets held individually instead of in trust,” and requires “an objective determination of whether the particular cost is one that is peculiar to trusts and one that individuals are incapable of incurring.” The court held that because investment advisory fees were “costs of a type that could be incurred if the property were held individually rather than in trust,” and therefore deduction of such fees by the Trust was subject to the 2% floor.

The Trust petitioned for, and was granted, certiorari. The case was argued November 27 2007 and decided on January 16 2008. The Court found that in applying the statute, the Court of Appeals asked whether the cost at issue could have been incurred by an individual. This approach flies in the face of the statutory language. The provision at issue asks whether the costs “would not have been incurred if the property were not held” in trust, not, as the Court of Appeals would have it, whether the costs “could not have been incurred” in such a case. “We can think of no expense that could be incurred exclusively by a trust but would nevertheless not be paid or incurred in connection with” its administration. In an unusual occurrence, the Court unanimously upheld Ms Sotomayor’s decision while unanimously rejected her logic. Chief Justice Roberts wrote for the Court. Ms Sotomayor was unanimously upheld but the reasoning she adopted was unanimously rejected.

The Environment: Riverkeeper Inc v EPA, 475 F.3d 83 (2007)

Ms Sotomayor, writing for a three-judge panel, ruled that the EPA may not engage in a cost-benefit analysis in implementing a rule that the “best technology available” must be used to limit the environmental impact of power plants on nearby aquatic life. The case involved power plants that draw water from lakes and rivers for cooling purposes, killing various fish and aquatic organisms in the process. Ms Sotomayor ruled that the “best technology” regulation did not allow the EPA to weigh the cost of implementing the technology against the overall environmental benefit when issuing its rules.

Certiorari was granted, and the case was argued on December 2 2008 and decided on April 1 2009. The Court found the Second Circuit’s interpretation of the “best technology” rule was too narrow, and reversed 6-3. Justice Scalia wrote for the majority, in which Chief Justice Roberts and Justices Kennedy, Thomas, and Alito concurred. Justice Breyer filed an opinion concurring in part and dissenting in part. Justice Stevens filed a dissenting opinion, in which Justices Souter and Ginsburg, joined. Ms Sotomayor was reversed 6-3.

Affirmative Action: Ricci v DeStefano 530 F.3d 87 (2008)

That brings us to Ms Sotomayor’s latest ruling to reach the High Court, which is to be decided during the current session. Ms Sotomayor was part of a three-judge panel that ruled in February 2008 to uphold a lower court decision supporting the City of New Haven’s decision to throw out the results of a captain’s exam to determine promotions within the city’s fire department. Only one Hispanic and no Black firefighters qualified for promotion based on the exam; New Haven subsequently decided not to certify the results and issued no promotions. In June 2008, Second Circuit decided 7-6 to deny a rehearing of the case in banc (by the full 13-member court). The Supreme Court agreed to review the case and heard oral arguments in April 2009.


[1] Referring to the 1976 Copyright Act.

[2] A Bivens Action allows for damages in remedy for constitutional violations committed by federal agents. In Bivens v 6 unknown named federal agents, the Court found that a violation of a specific constitutional amendment by a federal employee was recognized as a cause of action for monetary damages.

[3] Grable involved real property belonging to Grable & Sons Metal Products Inc, which the IRS seized to satisfy a federal tax deficiency. Grable received notice of the seizure by certified mail before the IRS sold the property to Darue Engineering & Manufacturing. Five years later, Grable sued Darue in state court, asserting that Darue’s record title was invalid because the IRS had conveyed the seizure notice improperly.

Note to Judge Sotomayor …

Title 28, Chapter I, Part 453 of the United States Code, stipulates that each Supreme Court Justice take the following oath:

I, [NAME], do solemnly swear (or affirm) that I will administer justice WITHOUT RESPECT TO PERSONS, AND DO EQUAL RIGHT TO THE POOR AND TO THE RICH, and that I will faithfully and IMPARTIALLY discharge and perform all the duties incumbent upon me as Justice of the United States Supreme Court under the CONSTITUTION AND LAWS OF THE UNITED STATES. So help me God.

the UN Leaps into Inaction Again

Pyongyang announced an underground nuclear test had occurred Monday at 0954 [local time, 0054 GMT] in northeast DPRK, estimating the blast’s yield at 10 to 20KT – comparable to the bombs that flattened Hiroshima and Nagasaki. Russia’s Defense Ministry confirmed a test had taken place[1]. Monday’s test was conducted at the same site used for its failed nuclear test in October 2006, about 50 miles (80km) northwest of the northern city of Kilju, Russian Defense Ministry spokesman Alexander Drobyshevsky said, speaking on state-run Rossiya television. DPRK is believed to have enough weaponized plutonium for at least a half-dozen fission bombs. However, experts say their scientists have not yet mastered the miniaturization needed to mount a nuclear device onto a missile.

President Barack Obama said a nuclear test would constitute an act of “blatant defiance” of the United Nations Security Council and a violation of international law, and only further isolate DPRK. A spokesman for South Korean President Lee Myung-bak said the test was “a provocation that can never be tolerated”, while Japan’s Chief Cabinet Secretary Takeo Kawamura said any nuclear test by the North would be “unacceptable”. Both said they would ask for action from the UNSC. UN Secretary General Ban Ki-moon said he was “deeply disturbed” by reports of the test – which, if confirmed, he said would violate UNSC Resolution 1718, which demands that DPRK refrain from nuclear testing [2].

Let me see if I got this right … Pyongyang breaks UNSCR 1718 for the second time (the first when they stood up their ICBM for testing), so the UN is going to retaliate by passing a firmly-worded Resolution. Did I miss anything?

The United Nations is a living example of the failure of Liberal Internationalism in the real world. It was founded on the principle of sovereign equality – one nation, one vote – thereby creating an Orwellian democracy of dictatorships. It passes resolutions that are universally ignored. It sends in peacekeepers that don’t. It passes watered-down sanctions and looks the other way when signatories defy even those. It has never, in its 63-year history, prevented an international crisis – its raison d’être.

President Obama is finding out that President Bush was right about yet another thing – in the real world, endless chatter at the UN accomplishes nothing but giving time to the offending party. There are two things that could bring results in defusing a worsening situation. If PRC were to cut off fuel and food to DPRK, it would quickly bring Pyongyang to its knees, but precisely for that reason, Beijing won’t do it. It fears floods of Korean refugees crossing the border, and a coup d’état leaving a rudderless military in control of the DPRK government. Secondly, President Obama could announce that, for whatever reason, Pyongyang seemed determined to menace its neighbors, leaving the US no choice but deploy a ballistic missile defense to protect its friends and allies in the region. Diplomacy is a bad joke if there are no consequences for non-compliance, and the UN offers no consequences for non-compliance.

People go from bondage to self-respect, to great courage, from courage to liberty to abundance, from abundance to selfishness to complacency, from complacency to apathy to dependence, and from dependence back again to bondage. If the West doesn’t rediscover its backbone, we will be hostage to tin-horns of the like of Kim Jung-Il unto irrelevance.


[1] See Jae-soon Chang [Seoul], Pamela Hess [Washington], Steve Gutterman [Moscow] and Shino Yuasa [Tokyo], North Korea declares it conducted nuclear test, Associated Press, May 25 2009.

[2] See David Loyn, Outrage over N Korea nuclear test, BBC, May 25 2009.

the Middle East and Barack Hussein Obama

In a piece to be published in The New York Review of Books on June 11, Hussein Agha and Robert Malley parrot the conventional wisdom about the Bush administration’s “reckless” activity in the Middle East.

By virtually every measure – name, race, origins, and upbringing – Barack Hussein Obama was a revolutionary presidential candidate. In Mideast policy at least, there is little reason to imagine that he will be a revolutionary president. The radical break with traditional US policy came with the Bush administration, during which the US invaded and then occupied Iraq, shunned Syria, and engaged in an effort, at once ambitious and irresponsible, to reshape the region[1].

The authors curiously omit the detail that the region has been reshaped.

The Middle East was stuck in a stultifying era of artificially sustained unpopular regimes, and we essentially created that situation[2]. Cold War necessities (all wars have them) dictated that we keep the Soviet Union out of the Middle East. We couldn’t surrender our energy source to them and we couldn’t have them establishing a blue water naval base in the Persian Gulf. This required finding (or creating) friendly regimes in geostrategically key states, and Iran and Saudi Arabia fit that bill. Iran stands astride the most reasonable route for a Soviet corridor to the Gulf, and combined with the Saudi’s oil, locked the West into overwhelmingly most of the region’s crude supply. When the Soviet Union evaporated, the regional balance of power dissolved with it, removing the negatives for acting independently of Western wishes.

The Middle East was headed for a spontaneous unraveling, and by tripping the spring early we have a better chance of influencing the process. The same holds true regarding a confrontation with terrorists at a place and time of our choosing, not theirs. Addressing either means addressing both, as the latter is a product of the former[3]. To defeat apocalyptic Islam, the region had to be transformed, and democracy was seen as the best (to us) ideal toward which to work. The toppling of the Taliban regime in Kabul and the Hussein kleptocracy in Baghdad has altered the default trajectory of regional geopolitics.

Saudi women now can not only vote, but can (and do) hold certain elective offices; within days of the invasion of Iraq, Libya took the extraordinary step of relinquishing its nuclear program – lock, stock and barrel – to British and American intelligence agencies; Syria dismantled its official intelligence apparatus in Lebanon; Egypt now allows candidates from the locally popular (if feared by government) Muslim Brotherhood onto ballots for office; Iraqi Sunnis have been peeled away from al Qaeda, breaking the back of al Qaeda-in-Iraq (AQI); the Arabian Peninsula has emerged as a natural ally of the West in the liberalization and solidification of the Arab Middle East (out of fear of Iran, but a legitimate alignment nonetheless). On and on.

Thus far, President Obama has, essentially, carried Bush’s policies forward. He has only diddled at the edges of Bush’s Iraq plans; he has had his Casey/Petraeus moment in the “good war”, replacing the strategy and ranking general in that theater; his campaign bravado regarding Pakistan has yielded to the ugly light of reality; he continues (and defends) the hated wiretaps on terror, err … human disaster causing, suspects; he has reinstated the “travesty” of military tribunals at Guantánamo (which he is having the same trouble closing that GWB did – no one wants the detainees). Again, on and on.

Two such Bush-III approaches are doomed to failure (pursuit of a “two-state solution” to the 5,769-year-old everybody-against-the-Israelites carbuncle; and the continuation of being Iran’s slap-monkey at the negotiating table), and his one attempt at Hopeychange (the closing of Guantánamo Bay on a date-certain) is an unforced error. All three have little up-side probability and profound down-sides.

Aside from the fact that the Palestinians themselves are a “two-state” proposition – Hamas-led Gaza and Fatah-led Judea and Samaria [the West Bank] – there is no detectable Palestinian constituency that desires to live side-by-side with a Jewish Israel. Under neither Hamas nor Fatah tutelage have the Palestinians exhibited the slightest hint of being able to operate a government. Israel would have to yield its defensible borders up-front while relying on the word of a serial war criminal that it would be a good neighbor. The Arab “community” vastly prefers Palestinians with a cause to Palestinians with a flag. In short, only outsiders think a “Palestinian state” is a solution to anything.

It has been obvious for years that Iran hasn’t negotiated in good faith, isn’t negotiating in good faith, and has no interest in negotiating in good faith. It has spent five years mining the process for the inevitable concessions while using the time to expand its nuclear activities. They know that PRC and Russia will abstain from any meaningful sanctions (they have business deals with Tehran, and will do almost anything to frustrate Washington). The Middle Eastern mind considers negotiations to be a sign of weakness, and therefore Iran is negotiating from a position of strength (whether or not they really are isn’t as important as them thinking they are). An intransigent, apocalyptic Iran will not negotiate away something it feels to be in its interest.

And by the way, these two situations have nothing to do with each other. Mr Obama’s veiled threat that “our talks with Iran will go much better if Israel is seen as cooperating toward a peace deal” is non sequitur. It’s asking Israel to initiate a suicide pact with Iran’s proxies so we can save them from Iran. Now we are bargaining in bad faith and Mr Netanyahu knows it.

On his second day in office, Mr Obama signed an executive order mandating the closure of the Guantánamo Bay detention facility by January 22 2010 without even considering the ramifications. He was still a candidate who hadn’t yet come to grips with governing. He is now up against the realities that frustrated the Bush administration’s attempts to do the same thing, only he has painted himself into an ideologically constructed corner with real-world consequences. Where to put them is the easy part – use the best-named prison in America: the United States Military Disciplinary Barracks at Fort Leavenworth [KS] – it’s what to do then that presents the problem. Once on American soil they are privy to Constitutional protections they quite frankly don’t deserve, and rules of evidence that can’t be met. These are wartime captives where forensics weren’t collected. A number of detainees are classical POWs – no crime involved, we just can’t release them until hostilities have ceased. And last but not least, if you think the ACLU had problems with Guantánamo, wait ‘til they get a load of American prisons.

All of this tends to confirm what I have suspected. His acquiescence in Bush’s foreign policy belies Mr Obama’s relative ignorance of the field. The degree and radicalism of Hopeychange has been concentrated in the domestic sector, where he feels compelled to remake America the dystopian vision of the paternalistic Left.


[1] Hussein Agha and Robert Malley, Obama and the Middle East, in The New York Review of Books, June 11 2009, p.1.

[2] See Russ Durham, Saddam Plus Five, April 14 2008, p. 3.

[3] See Russ Durham, A Riddle Wrapped in a Mystery Inside an Enigma, March 17 2008, pp. 1-2.

Note To Friends

I am having major keyboard issues, and am unable to access AOL (my password contains characters whose keys don’t work), so my email is, a present, out of service. Please have patients, and I’ll keep you posted.

Dastardly Practice Must Stop

It’s bad enough that we herd less-gifted children into neighborhoods and brand them (we’ve all seen the signs warning us that we are entering an area of “Slow Children”), but now I find out the government is following them through life. I recently passed a highway sign warning me that we were entering an area of “Slow Men Working”.

This is despicable and must be stopped!

the Fine Line Between Responsibility and OMG!

Word began to flow out of Mexico the weekend before last of well over 150 deaths suspected to have been caused by a new strain of Influenza-A (H1N1) commonly referred to as swine flu. Scientists who examined the flu announced that this was a new strain derived partly from swine flu, partly from human flu and partly from avian flu strains (although there is some question as to whether this remains true). The two bits of information released in succession spurred global reaction. But now, in light of its apparent mildness, people are asking if the global medical community over-reacted.

Honestly, this is a tough call. Overall, I would give the Obama administration high marks thus far (it is mostly local communities and Joe Biden that have chosen to go Chicken Little), but am withholding the final grade until this fall’s flu season. Let me explain.

Influenza is a scary thing – it is passed by casual human contact, has an incubation period longer than mean travel times, and, when occurring out of season, dredges up images of the “Spanish Flu” that ravaged the planet at the end of World War I (over 50 million fatalities). Around 36,000 Americans die annually during our plain vanilla yearly flu season.

As far as public perception goes, we look to our talking heads who have followed tradition in largely knowing nothing about the teleprompter copy they are reading. To the medical mind, the word “pandemic” denotes a disease occurring over a wide geographic area and affecting an exceptionally high proportion of the population. The term in no way addresses the underlying seriousness of the disease, its mortality or its wider impact on society. It is only a descriptive of its communicability. None of this, of course, was mentioned in the breathless coverage.

A national response is hard-wired to be behind the curve on a pandemic, as a pandemic must show itself before we know that we’re in one. This is why it’s important to have a gamed strategy in-place for when a pandemic emerges. We do, and it was employed on cue. So far, so good.

The mortality rate of this outbreak seems small (statistically, it has been milder than “normal” flus) except in Mexico. This leads me to conclude that the Mexican deaths are being falsely attributed H1N1, or that there is some exotic genetic match between Mexicans and the virus that causes increased lethality – an asymptotically small probability worthy of Oliver Stone.

We need to carefully watch the onset of “flu season” this fall to see if H1N1 re-emerges with a vengeance (the signature of 1918’s catastrophe). We need to continue to stockpile Relenza and Tamiflu, and to forward-base those stockpiles at regional hospitals for rapid distribution. To get caught flat-footed this fall, after this heads-up, will drop Mr Obama’s grade to an F.

Empathy, Ledbetter, and the Role of the Supreme Court

President Obama remarked that he was looking for a replacement for Justice Souter that exhibited “empathy”, and cited Ledbetter v Goodyear as a case where it should have been used.  He wants, in other words, a Supreme Court that legislates from the bench.

Empathy is what could be exercised during the drafting of a law, not it’s implementation from the judiciary, which is to apply the law, as written, to resolve disputes.  Trial courts are about the facts in the case, appellate courts are about the behavior of judges and lawyers, and the Supreme Court is about the constitutionality of the law in question.

An example would be Bush v Gore.  The general impression is that the Supreme Court stopped the Florida recount, thus giving George Bush the 2000 presidential election. What actually happened is quite different.  The Florida Supreme Court settled a couple of questions about the scope of the desired recount and extended to the deadline by which time the Secretary of State had to received the final counts of the various counties.  That decision was challenged in the US Supreme Court on the grounds that the Florida courts could not diddle with election law (i.e., the filing deadline), which is the constitutional purview of the legislature.  The Supreme Court agreed, saying that Florida could conduct any recount it wanted, so long as the results as of the legislated deadline were considered final[1].  Empathy would have held for Mr Gore – in fact the Boston Globe, the New York Times and the Miami Herald conducted a tireless recount in a fruitless effort to show that Mr Gore actually won – but would have produced bad law.  The supreme sub-federal law in Florida is Florida’s Constitution, and it grants the Florida legislature the privilege of setting the parameters of Florida’s elections – including when and how they end.  A judge cannot willy-nilly change any of that because it would feel good.

In Ledbetter, the petitioner had filed for what turned out to be equal pay for equal work discrimination, but filed one day after the statute of limitations had run out.  Apparently Obama feels that the Supreme Court should have ignored the law and awarded her out of “empathy”.  What’s the difference, really, in deciding that the legislature was kidding about the statute of limitations and finding that the legislature was kidding about equal pay for equal work? I f the Court found for Ledbetter, what about someone who filed one day after she did?

Neoliberal distaste for the Constitution continues to become more blatant by the day.


[1] The actual ruling remanded the case to the Florida Court, telling them to revisit their decision without usurping legislative prerogative.