Saturday, July 25, 2009

On racism and teaching moments

A couple of years ago, I almost went to jail for jaywalking. But that's not really true, I nearly went to jail because I was a smart ass to a police officer. My friend and I were late to a concert, and we crossed a busy street by weaving through traffic. I was trying to wave a car ahead of me so we could cross, but the car didn't stop. So I looked at the driver and gave her a "wtf" look before jogging across the street. It was a ghost car. Before I knew it, I was up against the wall being frisked. The cop was furious, and I'm fairly sure the initial plan was to take us to jail. But then we got very apologetic and deferential, and the cops let us go with just a citation.

I'm a 31-year-old white lawyer. And talking smack with cops is a great way to go to jail. I fully acknowledge that there is a long history, including the present, where blacks receive additional inappropriate scrutiny solely because of race. But that's not why I'm writing this. The Gates story is so big for the same reason the Duke lacrosse story was so big. It's the perfect, juicy mix of wealth, affluence, and race where we can use it to talk in broad strokes about anything and everything. I get that. We want to make it a teaching moment. The President invited the two for a beer. And when the President invites you out for a beer, it's not like you can say no.

Gates is a public figure, but Crowley is not. But now he will be famous, whether he likes it or not. And I suspect that it kinda sucks being famous if you're not rich. While Obama and others may wish to make this a teaching moment, we're turning Crowley into a Steve Bartman-like caricature. It's going to be exceedingly difficult for him to go back to his life after this fades from the public view.

Obama's decision to invite the two for a beer might be the best move for his reputation, but it's decidedly unfair for the participants involved, particularly Crowley. I have no idea what happened in Gates's house and I don't particularly care. My only strong belief is that the in civil society, the punishment should have some degree of proportionality with the crime. If Gates would like to sue for a violation of his civil liberties, he is entitled to do that. If state or federal officials would like to look into alleged impropriety, they should. But forcing people to try their case, without facts, in a public debate, with the President serving as a mediator, strikes me as cruel. But now the damage is done, and in two weeks, though Gates's and Obama's lives will be very similar to what they were before, Crowley's will be irreversibly transformed. He's been shamed, publicly, by the President. And you can't take that back. He's going to find it difficult, bordering on impossible, to do his job. This will be the first thing they write about him in his obituary. And it will affect everything he does between now and then.

You don't get worthwhile lessons when you teach about subjects where you have no unique insight or knowledge. And since We don't know what happened in that house, I just don't see what purpose it can serve as a "teaching moment." Ultimately, there's only one person for whom this should be a teaching moment, and that's Mr. Obama.

Tuesday, July 7, 2009

Are California's IOUs Unconstitutional?

In case you haven't heard, California can't pay its bills, so it's gone about issuing IOUs, or "Warrants" to Creditors it can't afford to pay just yet (if ever). They'd like us to believe that they're just as good as money. But if they're just as good as money, that may be problematic.

According to Article I, Section 10 of the Constitution:

"No
State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility."

The two phrases of concern are "coin Money" and emit "Bills of Credit." Now, the definition of money is complex and subject to great wonkiness to those of far greater pedigree than I. But, to move this post along, the main definitions according to economists (as understood by me) are "a store of value" and "a medium of exchange."

Well, the California legislature certainly wants the former to apply to its IOUs, and its recipients are hoping for the latter. Check and check.

What do courts think? I haven't found any recent cases on the subject, but I found some old ones. According to a series of cases from the 19th century, the standard appears to be whether, "the paper [is] issued by a state, upon its faith, designed to circulate as money, and to be received and used as such in the ordinary business of life." Darrington v. Bank of Alabama, 54 U.S. 13 (1851).

I would argue that California's IOUs don't violate this standard . . . yet. While there's some folks on eBay looking to arb these bad boys, you probably can't use them to buy Wheaties or a new stereo at your local Walmart, in California or anywhere else. So, they're not yet, "used as such in the ordinary business of life." But if California continued to issue them, and they became more widespread, or even developed their own exchange rate, I think you could make a solid argument that they were unconstitutional.

In sum, if this is a one-time, stop-gap measure, I think anyone looking to take their case to the Supremes would be disappointed by the result. But the longer it goes on, and the more they're used by the Californians as a convenient substitute for actual cash, the closer these IOUs would come to a Constitutional crossroads.