Wednesday, April 29, 2009

Selective Free Market Economics and the Decline of Freedom

I double majored in economics and mathematics in college, the mention of which causes my wife to roll her eyes and make that finger-in-the-throat gagging gesture. Nevertheless, I'm glad I did the two majors together, as I have used them many times in my law practice. I am also finding them invaluable now, as I watch our society unravel.

One interesting phenomenon that characterizes today's modern Democrats is the way they use free market economics to accomplish certain goals that will inevitably deprive us of more of our freedoms and the way, when it benefits their own pet projects, they successfully use the supply side economics they deride in all other cases.

A couple examples:

Our governor, Tinkerbell, refuses to cut taxes (or spending, for that matter) to make Michigan a more business-friendly state generally. But, when it comes to liberals' most cherished industry -- entertainment -- she had no problem pushing through tax cuts and trumpeting their success in turning Michigan into a Midwest Hollywood. These tax cuts produced an entirely rational and self-serving response from the movie industry -- they moved to where their costs were lower! This must have shocked our governor into paralysis, because she hasn't tried this since, and she shows no inclination to do the same thing for the rest of Michigan's economy.

Meanwhile, in Washington, the One is pushing his cap-and-trade plan for carbon dioxide emissions that he even says will "necessarily cause electricity prices to skyrocket." Gee, thanks a lot. That's just what we need right now. Why is he doing this? Apart from the darkest possible explanations (he wants to cripple our manufacturing base), he obviously wants to drive prices of coal-power generated electricity up so that we will look to other sources of electricity, such as those wonderful windmills and the sun. This is another example of market interference that relies for its success on rational behavior by consumers -- searching for lower cost and hence lower priced power.

While decrying the market, both Tinkerbell and the One use market economics and classical supply and demand theory to manipulate events for their own purposes. Film production tax credits and cap-and-trade depend for their success on the very thing that both of them deplore -- people acting in their own self-interest. When they don't like it, they call it greed.

In the same year our nation was founded, Adam Smith published his magnificent The Wealth of Nations, in which he described the phenomenon of the "Invisible Hand," which holds that if consumers are allowed to choose freely what to buy and producers are allowed to choose freely what to sell and how to produce it, such a free market will result in prices and a distribution of goods and services that benefit all members of a community, and hence the community as a whole.

People are driven by self-interest and the desire to increase their own income and utility (a word economists use instead of satisfaction or happiness, to be measured in utils. Not kidding.). Since the income and happiness of society is the sum of individual incomes and happiness, all benefit from the individual pursuits motivated by the Invisible Hand.

When it pleases them, the Democrats employ the mechanisms of the free market in a twisted and horrific way, but they absolutely refuse to allow the market to work generally, believing instead that they, individually, can make better decisions than the collective result of millions of decisions made by consumers and producers every day. This is arrogance, pure and simple.

Beyond arrogant, though, the behavior is dangerous. Raising the cost of electricity astronomically is the only way to make "alternative" energy sources competitive, but all energy sources will be at much higher prices than they are now, which means consumers and businesses will use less energy, which means less economic activity, which means fewer and fewer jobs and lower incomes for those who are fortunate enough to work. This will, of course, translate into demand for government assistance, intervention, and, like we are seeing now, ownership of what we used to call private enterprise.

Freedom? In the future, it will be a luxury the government won't let us afford.

By picking winners (movies and windmills), the Democrats impose higher costs on everyone else who must pay the added burden. Thus, those who are not winners are, instead, losers. What has our governor done to pick up the auto industry? All we hear is that we are too dependent on the auto industry and we need to diversify. That's fine, but in the meantime, they could use a little help. They're not getting it from Lansing, so they're gradually disappearing, first in Michigan, then it will be the rest of the country, until we don't have a domestic auto industry any more. About that time, Tinkerbell will probably want tax cuts for drive-in movie theaters. Driven by windmills, of course.

Why Judges Matter, Part 3

U.S. Supreme Court decisions are issued throughout the year, from October to June, so rarely are two decisions issued on the same day that so clearly illustrate the vast judicial philosophy gulf separating conservative from liberal judges. This rare event occurred today, however, with the Court's decisions in Kansas v Ventris and Dean v U.S. Fortunately, the majority opinions were authored by Justice Scalia and Chief Justice Roberts. Both were 7-2 decisions, with Justice Stevens in dissent in both cases.

In the Ventris case, Donnie Ray Ventris and his girlfriend, Rhonda Theel, shot and killed one Ernest Hicks with a .38-caliber revolver, and then drove off in Hicks’s truck with approximately $300 of his money and his cell phone. On a tip from the "friends" who drove Ventris and Theel to Hicks’s home, officers arrested Ventris and Theel and charged them with various crimes, chief among them murder and aggravated robbery. The State dropped the murder charge against Theel in exchange for her guilty plea to the robbery charge and her testimony identifying Ventris as the shooter. Prior to trial, officers planted an informant in Ventris’s holding cell, instructing him to “keep [his] ear open and listen” for incriminating statements. According to the informant, in response to his statement that Ventris appeared to have “something more serious weighing in on his mind,” Ventris divulged that “[h]e’d shot this man in his head and in his chest” and taken “his keys, his wallet, about $350.00, and … a vehicle.”

At trial, Ventris took the stand and blamed everything on Theel (who says chivalry is dead?). The prosecutor then asked to call the jail cell informant to impeach Ventris's testimony. The trial court let the testimony in and Ventris was convicted. The Kansas Supreme Court reversed the conviction, holding that allowing the informant to testify violated Ventris's Sixth Amendment right to counsel during all custodial interrogation. The US Supreme Court then reversed and reinstated the conviction, finding that the Sixth Amendment would prohibit the prosecution from using the informant's testimony as part of its case in chief, but once Ventris testified, the informant could be used to impeach him. As the prosecution put it at trial, the Sixth Amendment “doesn’t give the Defendant … a license to just get on the stand and lie.”

In the Dean case, Christopher Michael Dean, wearing a mask, entered a bank, waved a gun, and yelled at everyone to get down. He then walked behind the teller counter and started removing money from the teller stations. He grabbed bills with his left hand, holding the gun in his right. At one point, he reached over a teller to remove money from her drawer. As he was collecting the money, the gun discharged, leaving a bullet hole in the partition between two stations. The robber cursed and dashed out of the bank. Witnesses later testified that he seemed surprised that the gun had gone off. Fortunately, no one was hurt. At trial, Dean admitted the robbery and was convicted.

Federal law imposes additional, mandatory sentences on defendants for using firearms during crimes -- 5 years for carrying one, 7 years “if the firearm is brandished” and 10 years “if the firearm is discharged.” Dean appealed the additional 10-year sentence he got because the gun went off, claiming that it was an accident. The Supreme Court affirmed the added sentence, finding no requirement that the defendant intend for the gun to discharge. In part of his opinion, Chief Justice Roberts quoted from one of history's greatest legal writers, on whom much of our common law relies:

“[I]f any accidental mischief happens to follow from the performance of a lawful act, the party stands excused from all guilt: but if a man be doing any thing unlawful, and a consequence ensues which he did not foresee or intend, as the death of a man or the like, his want of foresight shall be no excuse; for, being guilty of one offence, in doing antecedently what is in itself unlawful, he is criminally guilty of whatever consequence may follow the first misbehaviour.” 4 W. Blackstone, Commentaries on the Laws of England 26–27 (1769).

Justice Stevens dissented in both cases, finding on behalf of the criminal each time, despite the fact that there was no doubt about guilt in either case. He described the Ventris decision as "another occasion in which the Court has privileged the prosecution at the expense of the Constitution," despite the fact that, as Justice Scalia observed, "we have multiple times rejected the argument that this “speculative possibility” [that police will use informants solely to gain impeachment material for the unlikely event that the defendant will testify] can trump the costs of allowing perjurious statements to go unchallenged. *** We have held in every other context that tainted evidence—evidence whose very introduction does not constitute the constitutional violation, but whose obtaining was constitutionally invalid—is admissible for impeachment."

In Dean, Justice Stevens found that an intent to discharge the weapon must be found, despite the absence of any statutory requirement for intent. This conclusion is so obviously inconsistent with his decision in Ventris that the only way it can be reconciled is to observe that, in both cases, Stevens would have ruled for the guilty defendant instead of the prosecution.

Stevens would exclude the informant's testimony in Ventris, despite the fact that it was being used to impeach perjury by the defendant, and regardless of the intention of law enforcement. On the other hand, in Dean, Stevens would protect a criminal who takes a loaded gun to a bank robbery by requiring that the prosecution prove that, if the gun went off, the criminal intended for the gun to go off.

Thus, in Dean, where the criminal is concerned, intent is everything, while in Ventris, where the focus is on the prosecution's conduct, intent is irrelevant.

We expect this kind of flip-flopping inconsistency from our politicians. Are we now relegated to getting it from our judges also? And, what's worse, we're getting it from our Supreme Court justices, who have the highest responsibility of all -- defining, defending, and applying our magnificent Constitution.

Thursday, April 9, 2009

Protecting Incompetence in the DPS

It is one thing to be incompetent. It is quite another to circle the wagons and fend off any attempts to solve the incompetence. And yet, if Michigan's House Democrats get their way, that is exactly what will happen, as exemplified by HB 4047, passed April 2 by the House and sent on to the Senate.

HB 4047, sponsored by Bettie Scott and co-sponsored by 21 other Democrats, is deceptively simple. The entire substance of the bill is as follows:

A school district that was a first class school district as of September 1, 2008 shall continue to be considered to be a first class school district until July 1, 2010 regardless of its pupil membership.

"First class" school districts are defined as those having at least 100,000 students. Of course, the only "first class" school district in the state is the Detroit Public School District (the next largest is Utica with 29,000). With its declining student base, however, DPS is threatening to fall into the category of "general powers" districts. According to the Senate Fiscal Agency, Detroit has lost more than 72,000 students since 2000. That's 43 percent of previous enrollment. Enrollment in the current year is expected to be about 96,000, down from over 168,000 in 2000. So, the effect of this bill, if it becomes law, is to prolong DPS's "first class" status, without regard to enrollment.

Why does this matter? Here's what the House Legislative Analysis says:

In Michigan law "first class" districts operate under a different set of state regulations from "general powers" districts. The sections of the Revised School Code dealing with "first class" districts address school board composition, school board officers, school board meeting locations, board member personal interest in contacts, required annual audits, voting procedures, public communication, condemnation proceedings, bond sales, contracts, and public safety. The law also limits the creation of charter schools in such a district. And, there are also references in many other statutes to "first class" school districts.

There's the rub -- the bill would protect the present school board and, most importantly, limit the creation of charter schools in Detroit. There are four groups that can legally "charter" a school: universities, community colleges, intermediate school districts, or K-12 districts. Universities have reached their limit, and no intermediate or K-12 districts will charter schools in Detroit, leaving only community colleges who could do so. But, current Michigan law prohibits community colleges from chartering schools in "first class" districts.

The effect of this bill, therefore, is to prevent educational competition in Detroit, protecting one of the most incompetent and most poorly run educational enterprises in the entire country.

Not surprisingly, the entire educational establishment has lined up in favor of this bill, including the American Federation of Teachers, the Michigan Education Association, several members of the Detroit Board of Education, and the acting Detroit superintendent.

I hestitate to ask this, but has anyone asked how this bill might affect Detroit's students? Granted, there are fewer of them every year, but perhaps running DPS could be a little more about education and a little less about protecting petty fiefdoms and defending incompetence.

Wednesday, April 8, 2009

Why Judges Matter, Part 2

As a lawyer, I read new court decisions every day, some of which relate to my practice and others that just make me cringe. Another cringe-worthy decision was just published, courtesy of the U.S. Court of Appeals for the Sixth Circuit, covering Michigan, Ohio, Kentucky, and Tennessee. The case is Moses v Providence Hospital, and the author is the same judge who gave us the tortured opinion in Gass v Marriott Hotels, about which I posted previously.

In this latest mess, the court reinstated a lawsuit against Providence Hospital, filed by the personal representative of a woman murdered by her husband. The wife took her husband to the emergency room at Providence as he was experiencing headaches, high blood pressure, and vomiting, as well as slurred speech, disorientation, hallucinations, and delusions. The hospital admitted him. Initially, he was going to be placed in the psychiatric unit, but he never was. A week after his admission, the hospital released him, with one doctor noting that he "wants to go home. His affect is brighter. No physical symptoms now." Ten days later, the husband murdered his wife. He was subsequently convicted of first degree murder and is spending the rest of his miserable life in prison.

Two years later, the wife's personal representative sued, alleging that the hospital was negligent and also violated the Emergency Medical Treatment and Active Labor Act (EMTALA). The trial court dismissed the case, but the Sixth Circuit reinstated it.

The entire gist of the Sixth Circuit's opinion can be summarized thusly: the hospital thought the husband was psychotic and a danger when it admitted him; the hospital released him mistakenly or prematurely; and he then murdered his wife. Therefore, the hospital is liable.

Here's the problem with the court's reasoning -- the husband was convicted of first degree murder. Under Michigan law, first degree murder is defined as "murder perpetrated by means of poison, lying in wait, or any other willful, deliberate, and premeditated killing." The court's ruling assumes that the husband's alleged psychosis had something to do with the fact that he murdered his wife, but the conviction is for a willful, deliberate, premeditated killing, not for a killing resulting from a psychosis or psychological disorder.

To analogize, this case is like finding a hospital liable because someone commits a fraud after being discharged following misdiagnosis of a cracked rib. The diagnosis and the crime have nothing to do with one another and, in the Moses case, are mutually exclusive. The fact that the husband had hallucinations or delusions is irrelevant to a conviction for a willful, deliberate, and premeditated killing.

What is the effect of this ruling? Hospitals will now be less inclined to release patients, even if they believe the patients pose no threat or have improved sufficiently. This will, of course, drive up health care costs and insurance rates, squeeze hospital bed availability, and ultimately promote to some extent the conditions that energize advocates for nationalized health care.

Through the EMTALA and decisions like this, Congress and the courts are telling hospitals whom they must treat and, now, whom they must keep and for how long. It is a small step to specify the treatment to be given, at which point government control will be complete.

I don't know about you, but I prefer to make decisions about my treatment with my doctor, rather than having to obey the pronouncements of a judge from Cincinnati.

Thursday, April 2, 2009

Saving the Great American Burger

I posted last week about the new, 4-pound hamburger available -- finally! -- this summer at West Michigan Whitecaps games. The post was promoted by the tireless Nick at RightMichigan and, in comments following, the idea of a burger-eating challenge rose like a groundswell. (Those who know The Wiz personally will confirm that if he enters, the battle is for second place).

The great BlogProf now reports that the Fifth Third Burger may be in jeopardy due to a busybody dietitian ("dietitian" is actually Latin for "buzz killer"). Quoting the Detroit News, the Prof blogged:

Susan Levin of the Washington-based Physicians Committee for Responsible Medicine sent a letter to the Grand Rapids minor-league team on Tuesday. She's asking that the 4,800-calorie burger be labeled a "dietary disaster" that increases the risk of cancer and heart disease.

Now wait just a minute. This burger has FIVE hamburger patties, a CUP of chili, FIVE slices of American cheese, salsa, nacho cheese, and corn chips, along with lettuce, tomato and sour cream. It contains 4,800 CALORIES! Does it really need a warning label?

In Michigan law, there is a concept, usually applied in slip and fall cases, known as the "open and obvious doctrine." Under this doctrine, where the dangers are known or are so obvious that a person might reasonably be expected to discover them, there is no duty to protect or warn the person. Determining if a condition is open and obvious requires considering whether an average user with ordinary intelligence would have been able to discover the danger and the risk presented upon casual inspection.

Casual inspection? The dangers (and delights!) of the Fifth Third Burger are visible from the international space station! Those of us who are willing to assume the risk of consuming what may be the greatest burger ever are well aware of what those risks are and do not require assistance from the meddlesome Susan Levin or the PCRM.

As an aside, the persistence of lawyers and the questionable judgment of many of their clients result in lawsuits that end when judges make rulings like this one from the Court of Appeals:

"[W]e hold as a matter of law that, by its very nature, a snow-covered surface presents an open and obvious danger because of the high probability that it may be slippery."

Duh, really? Unfortunately, that's what our courts are reduced to deciding these days.

So, burgermeisters, take heart! We need to start training at the Shamrock Pub in Utica, Miller's Bar in Dearborn, or Nemo's in Detroit. All grills point to Fifth Third Park!