Although Sonia Sotomayor will be taking Justice Souter’s place as a liberal judge on the Supreme Court, Judge Sotomayor is much more extreme.

In 2006, Judge Sotomayor ruled that it was proper for the City of New Haven, Connecticut to throw out firefighter exams that were the criteria for promotion.  The reason?  There were no black firemen eligible for promotion based on the test results.  White and Hispanic firemen who passed the exam sued to reinstate the exam as the promotion criteria.

While I do not doubt that affirmative action has been and can continue to be an effective vehicle for justice, its rationale and implementation require constant monitoring.  At a time when the nation is re-examining and tempering the use of affirmative action, Judge Sotomayor favors expanding affirmative action in two extreme ways:

• (1) Judge Sotomayor favors hiring the lesser qualified applicant when lives depend directly on the knowledge and capability of the applicant.

Expert witness Vincent Lewis noted that the test included questions about proper use of fire equipment and that examiners should know that information.  Ricci v. DeStefano 554 F.Supp.2d 142, 149(2006). However, Judge Sotomayor prefers that skin color, rather than competency be the test in life or death situations like firefighting.  Her affirmative action ideology runs so deep that she favors risking property damage and deaths in the community in order to implement affirmative action. 

• (2) Judge Sotomayor believes in retro-active Affirmative Action

It is unconscionable that an organization hold out a test as the criteria for selection and then retract that test after the results are determined to be undesirable.  The facts of the Ricci show that the candidates invested significant time and money into preparing for the test.  In fact reasonable people would be justified in basing their career path on their chances of being promoted on the basis of their test score.  Destroying a person’s reasonable expectation does not comport with American values of fair play and substantial justice.  By contrast, traditional affirmative action in universities is known and expected before the investment is made.

The time has come for reform in executive pay, but what would the ideal solution look like?

The ideal solution for executive pay would be a self – regulating system that maintains a healthy tension between shareholder’s interest and an executive’s motivation for padding their own pockets.  The ideal model for this is the Solomonic pie cutting test solution:

(1)There is one piece of pie left and two kids who want it, (2) Mom says that one kid cuts the pie and the other kid picks the piece and (3) the kid slicing the pie is incentivized to cut the pie as fairly as possible.

Another intriguing model is the baseball arbitration model:

When baseball players are arbitration eligible, (1) the player and the team each submit a salary figure to an arbitrator (2) the arbitrator picks either the player’s number or the team’s number.  The player is therefore motivated to submit a reasonable number to the arbitrator in hopes that the arbitrator sides with him.

The pie cutting model is more elegant because it doesn’t require an independent third party.   Ideally, the model would not cap executive pay, but simply put the executive’s pay clearly between his own desires and shareholder’s interest.  And when I say clearly, I mean that there is no buffer (like a board of directors) between the two interests.

SOLUTION:

Each publicly traded company should have a $5M or 1% earnings cap, whichever is greater, on the base salary and benefit package that any employee would receive.  However, in addition to the cap on base pay, each executive would also get a bonus.  The executive would submit a bonus figure to the stockholders and they would vote on whether to give it to him or not.  If they vote YES, he gets the requested bonus, if they vote NO, he gets no bonus.

This puts pressure on the executive to request a reasonable bonus based on his actual performance from the previous year.  This would eliminate the AIG bonus situation because the executives would not have the courage to even ask for a bonus when they ran the company into the ground.  This solution would eliminate executives who get overpaid when their company takes a loss.

However, this solution may not incentivize executives to meet long-term shareholder goals.  As an option though, the bonus that the executives would receive, could also come in the form of 3 or 5 year vesting stock options.

Ideally, the solution would involve no government intervention or regulations.  But implementing a uniform solution would require a new law, although the law would require very little active regulation.  

Do you have a different solution?

Do you have a modification of the proposed solution?

What kind of behavior would the proposed solution cause?  Critiques?

I love Ken Griffey Jr.  He was an amazing talent and he is the reason why MLB is still in Seattle – he built Safeco Field.  Because of this, I overlook the fact that he demanded a trade with the Reds in which the M’s got no talent back because Griffey wouldn’t approve a trade that “crippled” the Reds.

I went to the first game Griffey was back in Seattle when he came back in 2007 as a Red.  I bought tickets in right field, made a sign that said “Safeco, the House that Griffey Built.”  It was an amazing dose of nostalgia.  I’ll be there in Cooperstown when Griffey is elected into the HOF.

However, if Griffey signs, the M’s will have to make some very hard decisions.  Griffey isn’t half the player he used to be and having him back for a full season will be like watching your parents get old.  The Mariners will compromise their decision making because they will be bound to play Griffey over younger players that deserve playing time.  Benching Griffey would be like taking the car keys away from your elderly parent.  The Mariners must keep a good relationship with Griffey in order to have him wear their hat in Cooperstown.

Instead, the Mariners should just let Griffey sign with Atlanta.  If both teams are out of the playoff chase in August, the Mariners should trade for Griffey and give him a 6-week victory lap.  This will avoid the complications of orchestrating Griffey’s playing time among the youger players for a full year, and still let the Seattle fans see him one more time.

Hello.

My old blog is no longer with us.  It was being hosted on one of my friend’s servers until he changed servers and left my blog to die on the old server.  Losing all that wonderful political, economic and personal content really sucks.  I feel somewhere in between my dog dying and getting my car broken into.

I bought my own web hosting so hopefully that will not happen again.  It may take a while for me to get all the blog links back up and running, but when I do, I will write some more posts.

Until then.

*This post was taken salvaged from the blog before the database was lost.  However, there are no comments.*

I have to admit, when I read Obama’s tax policies, the fiscal conservative in me hurts inside.  Why would we give people who aren’t paying taxes a refundable tax credit?  Normal tax credits only apply as a discount to your taxes.  Refundable tax credits are esentially checks from the government – the redistribution of wealth.  See the Wall Street Journal for further information.

http://online.wsj.com/article/SB121910303529751345.html?mod=most_emailed_day

So you know what I hate about the plan – people who pay zero taxes will now get a welfare check to take home.  Additionally, Republicans and capitalist cry out that taxing the rich just impedes growth and true growth is achieved by trickle-down, Reagonomics.  Really?

I think it is time we recogonize that the world has changed since 1980.  Consider that 2/3rds of the American economy is now consumer based.  It make sense to stimulate the economy by giving tax breaks to the poor and the middle class.  They will all buy their ipods and other consumer goods, which will boost our consumer driven economy.  What good does it do to give corporations tax breaks so that they can produce products that no one has money to buy?

For you trickle-down/Reagonomics fans, consider that Obama’s 20% capital gains tax is lower than the capital gain tax in the Reagan administration. Obama’s plan taxes the income of the rich, not the investment of the rich.  If anything, raising the income tax forces rich people to invest their money in order to be taxed on the lower capital gains tax.

Most people who discern the “redistribution” element of Obama’s plan feel that it isn’t fair.  Well it’s also not fair that a CEO works for 17 days and then gets a $28M parachute the same day the company goes to zero at the expense of my grandpa’s retirement.  See WaMu, 2008.  I’ve been trying to come up with a fair “capitalist principled” plan to limit pay for CEOs who unethically drive their company into the ground.  Well, one way to put the money they wasted back into our retirement accounts is to increase taxes on their unconscionable compensation.

It’s not fair that Warren Buffet’s secretary pays a bigger percentatge (33%) of her income in taxes than Warren (18%).  Rich people have accountants, attorneys and advisors to manage their wealth.  They shelter, level-load, invest and shift their money in order to pay the least tax on it.  The result is that most rich people have an effective tax rate of 8 – 15%.  Even after Obama’s raises their taxes, they’ll still be paying less than you!

Lastly, we need to raise taxes in this country.  We are $10T in debt and that debt is not going to go down without raising taxes.  (Spending is another issue altogether) Obama is taking advantage of the fact that rich people pay most of the taxes in this country and he is leveraging their ability to pay off the debt.  The taxpayer bailout, economic policy and foreign policy that have promoted corporate and personal wealth are responsible for the nation’s debt.  Obama is handing them the check – do not obstruct!

There was once a little boy named Jack who was very poor and had a family who barely got by even though his parents worked very, very hard.  To help out, Jack got a job helping out on the neighbor’s farm.  With all of the hard work, the boy’s family did a little better each year and they were happy.

When he was eighteen, Jack signed up to be in the armed forces.  In the military, he became an incredible swimmer, a deadly marksman and was trained in the art of hand to hand combat.  He had superior training, equipment and weapons and was lethally proficient in air, sky and ground missions.

After the military, Jack went to Stanford to become a doctor.   After residency, he opened up his own practice.  Jack was an amazing physician and people came from far away to see him.  He even gave his services for free to people who couldn’t afford it.  In order to manage his practice, Jack went to Harvard to get his MBA.

One day, after Jack had finished his MBA, the river in Jack’s town overflowed its banks.  Everyone looked to Jack for leadership.  Jack devised a plan to patch the dike.  Jack financed the emergency measures himself because he didn’t want his business to be flooded.  The community recognized him with a big article in the paper.

Soon after that, there was a domestic dispute two doors down in Jack’s neighborhood.  None of the neighbors knew what to do, but they knew Jack was proficient in all forms of fighting.  His neighbors said, “Jack, please break up the fight.  We’ll be right behind you.”  Because of his superior skills and equipment, Jack was able to successfully break up the fight.  Again the community was glad they had Jack.

Jack was also a philanthropist.  He donated his time and money so that a boy in his neighborhood could have a special surgery to help remove some scarring on his leg.

Jack was very proud of all he accomplished.  He held an MBA from Harvard, was a Stanford trained physician and was trained and equipped by the best military minds. His access to the best medical supplies gave him great personal satisfaction and his business and investment generated obscene amounts of wealth.  Jack also had a beautiful family with his lovely wife Jennifer, his little boy, Jeffrey and his little girl, Brianne.

Jack become known around the community as the “go to” guy for intervening in disputes, paying for projects or paying for medical procedures for needy individuals.   Jack felt a certain expectation to do everything in the community even though there were plenty of other capable individuals who could do the job.  However, Jack’s pride wouldn’t let him defer to anyone else.  After all, he was the number one economic producer in town.

In one particular crisis, Jack was called upon to provide expensive medical supplies to an outbreak of a deadly disease.  He couldn’t actually afford it, but he didn’t want to hurt his pride so he just borrowed some money from his daughter’s college fund to finance the supplies.

One night, there was a particularly violent domestic dispute in the neighborhood.  Per their custom, the neighbors got Jack out of bed to diffuse the dispute.  Jack broke down the door to the dispute and found himself in a bad position - a man had a gun pointed at Jack’s head.  He was in a bit of a quagmire, but he knew that he could simply buy his way out of the mistake.  He gave the man a large sum as a ransom for coming into the man’s house with no exit strategy.

In order to pay the ransom, Jack sent Jennifer to work full time.  It would only be temporary that he would run at a deficit in order to pay for the ransom.  Even after sending Jennifer to work and stealing from his daughter’s college fun, Jack kept taking on responsibilities he couldn’t afford.  All the responsibilities he took on were detrimental to his family, but he had to maintain his image and be consistent with his rhetoric that he was the strongest person in the community.

*This post was taken salvaged from the blog before the database was lost.  However, there are no comments.*

In the age of instant reporting in television and internet media, the Republicans have failed to realize that it is impossible to fight a ground war.  Every civilian casualty, every soldier killed and every mistake made in a war is well documented and garners incredible sympathy from Americans and erodes general support.  The Democrats, on the other hand, have a brilliant and shrewd foreign/energy policy…

Instead of trying to increase the supply of oil (very expensive to fight wars and everyone hates you), they strive to restrict oil demand (very cheap and you get Nobel Peace Prize).

Deploying their otherwise worthless minion via business jet and S class Mercedes, the Democrats laid the foundation for an what I call Neo Imperialism.  Al Gore convinced the world that they should reduce their carbon footprint.  So instead of fighting wars for oil, the democrats simply pressure nations (especially developing ones) to commit to the status quo in carbon emissions and as a result oil demand is reduced.

See?  The strategy is 10 times more effective and the only costs are pen/paper and a diplomat’s plane ticket.  Instead of spending $10B on a war every month, we simply send ambassadors to world summits and conventions getting signatures and commitments for developing nations to stay “developing.”  I’m mocking the Democrats while simultaneously realizing  the genius of a modern solution to our oil demand problems.

Under the cloak of global welfare, the gap between the rich United States and the rest of the world is maintained.  Of course Americans hate this idea, but they are in love with the cheap consumer electronics, bargain clothes and cheap energy that this reality affords.  I’m not saying this is right, but it’s America’s #1 demand in regard to new leadership.

One thing I found completely disturbing about the recent RNC, is the chanting of the mantra, “Drill Baby Drill.”  This view represents the ignorance, arrogance and outmoded outlook that has shaped the image of the Republican party, and by extension the United States in the last 8 years.  It has been said that “image is everything” and in this next election, it is impossible to ignore this truth.

I recently read an article that interviewed Egyptians on the streets of Cairo.  The Egyptians were very interested in the possibility of a black US president.  All of the people interviewed expressed a willingness to reconsider how they viewed America if Barack Obama was our next president.  This is precisely the image we need if we hope to have a successful foreign policy going forward.  This “willingness to reconsider” could be the difference between peace or conflict.

What most people have come to understand is that our foreign policy and our energy policy are very closely tied.  Employing superior policies is where the democrats may provide a net gain regardless of their expensive, idealistic, social entitlement programs.  If we didn’t have a war in Iraq to pay for (or start more wars in the future), the Democrats could spend another $5B a month on their social programs and we would still save $5B a month: Hence my current leaning to vote for Obama.

*This post was taken salvaged from the blog before the database was lost.  However, there are no comments.*

These days, I find that I am absolutely not a Republican.  However, I am absolutely not a Democrat.  I want to create a set of ideals for myself that I can use to find who best represents my views, because compromise is inevitable.

The first ideal I have for America was articulated by Michelle Obama in the recent DNC convention when she said, “The only limit to the height of your achievements is the reach of your dreams and your willingness to work for them.”

I want it to be possible for any American who makes it their singular focus to achieve middle class status, to be able to achieve that goal.  I don’t think it needs to be easy because I don’t think it’s the goverment’s duty to make it easy, I simply want it to be possible.

In my mind, we already have an America where anyone who “reaches for their dreams” is able to achieve their dreams.  Michelle and her husband would probably disagree with me on this issue.  They would probably advocate spending more money for a “safety net” and other social programs that I feel are unneeded.

In law school, I have been hearing that upward mobility is almost impossible for certain socioeconomic segments because they are plagued by multiple “vectors” of hardship.  Of course, everyone is dealt a different hand in life, but I am still searching for the hand that makes it impossible to achieve middle class status with the aforementioned dreams and willingness to work for them.

I want to hear your thoughts or hypotheticals regarding an impossible situation where someone could not achieve middle class status.  Make your case for increased government spending for social programs.  I want to be proved wrong.  Help me understand.