Wednesday, July 28, 2010

A Correction

The second paragraph of the last post on the destruction of the Constitution, starting with “In places, content dominates...” was missing; since when I know not. Perhaps since Monday when I began writing the epilogue to the Goldman Case and somehow inadvertently deleted it. Or maybe it had been missing since the time of the posting. In any event, it is now corrected. My apologies for the omission which you no doubt noticed.

Monday, July 5, 2010

The Destruction of the U.S. Constitution: An Essay on the Commemoration of the 4th of July, 2010

The relation between form and content is a complex one. It lies at the core of man’s recognition of himself and his environment. It is the central question of all artistic activities, indeed all human communications: what to say and how to say it. It is a critical link in Hegel’s dialectics and the key to understanding Marx’s Capital.

In places, content dominates form, as in a rock, where the form is but the extension of the content, what the rock is. At times, the form dominates by virtue of the content’s absence, as in the Senate hearings surrounding the confirmation of Elena Kagan to the Supreme Court.

Pity the media which must hype up the event as a sign of the citizenry’s vibrant democracy in action. Hence the live coverage of the embarrassing exchanges on TV and over-the-top reporting in the press: CONSERVATIVES ATTACK KAGAN!!! MISSISSIPPI SENATOR ACCUSES KAGAN OF BEING A LEFT WING!!! CONFIRM KAGAN!!!

The citizenry, alas, refuses to bite. Call it apathy or passive resistance. But Joe Sixpack is just not going to care. And why should he, with the event being so removed from his daily concerns that it might as well be taking place in another planet?

So a calculating self promoter with little knowledge of the law and deep superficiality – she calls herself “famously excellent teacher” – is finally within her goal of becoming a Supreme Court judge. She would be “impartial”, she told the committee.


As if that word had any meaning in the context of interpreting the U.S. Constitution. As if she were going to be a referee in some ball game. Then again, misunderstanding their role seems to be a requirement for the Supreme Court judges.

I thought of all this because this past Wednesday, an NYU law professor by the name of Noah Feldman wrote a commentary in the New York Times in which he noted that after the confirmation of Kagan, the Supreme Court would have three Jews and six Catholics and no white, Anglo-Saxon Protestants, the so-called WASPs.

From this fact, he went on to conclude that the WASPs’ graceful, voluntary exit from the corridors of power, and especially the universities, had allowed other races and minorities to shine. Harvard is richer by the presence of Alan Dershowitz.

When Noah Feldman was not even 30, the Bush administration dispatched him to Iraq to write a constitution for the occupied country. He accepted the assignment with eagerness, never allowing a complete lack of familiarity with the country and its language, culture and history to stand in his way. On the strength of that “experience” he was made the commentator in matters of law, U.S. foreign policy, international relations, and please don’t mention Iraq.

An egregious fool like Feldman is programmed to get everything wrong; misreading things is probably in his DNA. But his statistics cannot be argued with. Three Jews and 6 Catholics and no WASPs on the Supreme Court. Does this make-up signify anything?

The answer is, Yes. It signifies the rise of speculative capital and its destruction of the “system” – including the legal system – about which I have repeatedly written on this blog and elsewhere.

For the proof of this assertion, we need to go no further than the front page of the same paper on the same day, which ran an article on the “evolution” of Chief Justice Roberts, how “The Roberts Court” had come of age.

The article began by quoting an ex-solicitor general that “more than in any other year since he became chief justice, this has truly become the Roberts court.” He was in the majority 92 percent of the time, more than any other justice.

Also quoted was one Tom Goldstein, a snapper up of trifles, who said that Chief Justice Roberts “cares about the position of the court in the American life. He is not pressing every ideological question but is willing to cross over.” Roberts, the readers were informed, “is not wedded to a single judicial methodology like the originalism and textualism that are the touchstones for Justices Scalia and Thomas.”

Let us see now.

Chief Justice Roberts dominates the Supreme Court and its decision-making process. He was in the majority an astonishing 92 percent of the time, which is another way of saying that in 92 percent of the time, the Supreme Court’s ruling followed his way of thinking.

There is nothing wrong per se with that. But the article goes further. It presents the Chief Justice as a man free from the constraints of a judicial philosophies and thus, a more flexible jurist. The message meant to register in the reader’s mind is this: Chief Justice Roberts who cares about the position of the court in American life is not wedded to a single judicial methodology and is willing to cross over ideological lines.

Yet, how does one interpret the U.S. Constitution without a judicial philosophy?

When you are asked to read and interpret a text, you must either focus on the words – what they actually mean to you as a reader – or go beyond the words to what you think the writer intended to say but for whatever reason did not, or could not, say.

The circumstances and context determine the approach. If you are reading an operating manual for a machinery, you should stick to the plain meaning of the words. If you are reading poetry, you must go beyond the words to find deeper meanings and truths, leading readers to such discoveries being the purpose and the very point of poetry.

The U.S. Constitution is but one document with a set language. In reading it, there is no equivalent of going back and forth between a technical manual and poetry. So, when you are asked to read and interpret it, you must decide on the approach. You have to go either with the plain meaning of the words or the intent of the Framers. What the actual case is all about does not matter; the entire point of taking a case to the Supreme Court is to determine which side’s arguments and facts are (more) in line with the Constitution. If you decide to decide the case on its own merits, you would probably have to tweak the interpretation of the Constitution to support your decision. That would be “judicial activistism”, a cardinal sin to conservatists who insisted on being faithful to the Constitution at all times.

Of course, reasonable men could disagree on what the Framers meant in each instance. So, there are various arguments and counter-arguments in interpreting the Constitution. But the point here is the consistency of the approach to the text and the role that such consistency plays in forming the judgment. The Times article highlighted that role:
Justices Scalia and Thomas, who voted together 92 percent of the time — the highest of any pair of justices — often take positions based on jurisprudential principles without regard to the outcome in a particular case. [According to a former solicitor general]: “It’s striking how often if the court gets to a pro-defendant result the majority includes Justice Scalia.”
Scalia is neither a thinker nor a legal scholar. He is more of a thug than a judge, what with his pugnacious and in-your-face way of expressing nonsensical ideas. At times almost child-like, he is a man who cites the performance of a fictional TV character to defend and justify torture. Yet, because he follows judicial principles, his rulings tend to favor the defendants. That is precisely the point and the philosophy of the law: to protect the accused (even though the accused in the Supreme Court cases are generally the defendant in the lower courts.) That was the purpose of Magna Carta, which formed the foundation of the Anglo-Saxon jurisprudence.

The judicial principles, then, are the tools of legal standardization. But they work in a different way from the “sentencing guidelines” that are usually written by a vengeful and bigoted legislature. The judicial principles are the result of collective, i.e., social, delibrations and, as such, transcend the individual tastes and preferences. They logically enforce judicial consistency by compelling judges to subjugate their personal views and tastes to more universal principles of humanity.

Chief Justice Roberts follows no principles:
Chief Justice Roberts and Justice Alito, by contrast, can appear more pragmatic.
What does it mean for the Chief Justice of the U.S. to be “pragmatic”? I commented on this adjective when it was being used to flatter Bernanke. I wrote:
The most outstanding characteristic of the “pragmatic man” is lack of conviction. He believes in no ideology, honors no conventions, adheres to no principles, follows no set rules, finds nothing per se wrong and rules out nothing categorically.

In the case of a central banker, though, it was at least possible to discern a meaning for pragmatism. It meant ignoring and breaking the rules to flood the system with money. Of course, the “system” was made up of large institutions which benefited from the policy. But we understood that.

What does the word mean when applied to the chief judge of the U.S. Supreme Court? What is the pragmatic way of reading and interpreting the Constitution?

The Times article had the the answer, only it was scattered throughout the article. I have put the pieces together for your ease of reading:
The centerpiece of the last term was, of course, the 5-to-4 decision in Citizens United, allowing unlimited corporate spending in elections. The ruling generated waves of criticism, including comments from President Obama … The outcry did not chasten the court. “I don’t think it made the least bit of difference to the five justices in the majority,” said Paul D. Clement, who also served as solicitor general in the second Bush administration
The Citizens United decision contained not a trace of minimalism, and it showed great solicitude to the interests of corporations. “They’re fearless,” said Lisa S. Blatt [a former solicitor general]: “This is a business court. Now it’s the era of the corporation and the interests of business.”

That trend, lawyers and legal scholars said, may well threaten recent legislation overhauling financial regulation and the health care system when challenges to them reach the court.
Let us take the points one at a time.

First, contrary to what the sycophant Bernstein said about Roberts “caring about the position of the court in the American life”, Chief Justice Roberts decides the cases the way he pleases, with the court following him 92 percent of the times. He doesn’t give a hoot to what “we, the people” think.

And he votes for the business interests, which is why he cannot follow any judicial principles. Such principles act as legal/philosophical straightjackets for the judges. A doctrinaire judge with a set agenda must, or necessity, ignore them. The results could at times be contradictory and embarrassing, but so what?
The court acted quickly – and, some critics said, rashly – in intervening in cases without full briefing and argument. In January, it halted the broadcast of the trial over the same-sex marriage in San Francisco partly on a rationale it seemed to disavow five months later. This month, it sent elections in Arizona into disarray by barring the use of a 12-year old campaign finance law.
It is this court that Elena Kagan will be joining.

What is her judicial philosophy, beside the famous impartiality?

One of the tidbits that came out in the hearing was that one of Kagan’s judicial heroes is the retired president of the Supreme Court of Israel.

Why would someone nominated to uphold the principles of the Anglo-Saxon jurisprudence have a hero in Talmudic law?

What would you say of a cardinal – or even a pope – whose spiritual hero was a mullah in Qum?

Wouldn’t that be strange? In fact, how could it possibly be?

The answer is that it could be because there is little left of the Anglo-Saxon jurisprudence, which is why there aren’t any Protestants in the Supreme Court.

Protestants created the system that governed much of the word throught the 20th century, and especially, after the WWII in the West. The “system” had many parts. There was the legal system, the economic and financial system, the individual government system and the cultural and artistic system. These aspects of social life naturally took local forms in individual countries. But it is impossible to look at any of these aspects in any country in the past century and not immediately see the handiwork of the WASPs.

WASPs were not magnanimous benefactors. Only the most ignorant fool would think of them that way. What they did they did for their own self-interests. The list of their failures and crimes is a legion, which is another way of saying that they were no different from other rulers. The system they created was was discriminatory and unfair and could be oppressive, but, as system, it was consistent. A vile usurer could invoke its rules to demand his pound of flesh.

When the system came under the attack by the rise of speculative capital, the WASPs who had the pride of ownerhsip, refused to take part in dismantling it. And they prevented other from dismantling it. Remember “the Arabists” in the State Department?

But the other side was more powerful and pushed the WASPs aside. In their place it put Catholics and Jews, Gonzaleses and Yoos. They were brought in to wreck the system – not directly and in plain sight, as that could not be done, but to hollow it from the inside like termites do.

That’s “meritocracy” for you.

And that’s the story behind the makeup of the Supreme Court.

But, Nasser, how does all this relate to speculative capital? So Elena Kagan is superficial. So Chief Justice Roberts is a doctrinaire. What is the relation of these people and their character with finance?

Marx famously remarked that people make their own history but not in circumstances of their own choosing. Everyone has to play the hand they are given.

But there is more to this observation. The circumstances into which people are born also play a role in shaping their character. Circumstances could make the man.

Weak men succumb to circumstances and are shaped by them. Heroes rise above the circumstances and shape the events.

In general, though, it is not easy to be a hero and men, who must earn a living, yield to the economic circumstances. In the age of the dominance of speculative capital, they take the characteristics of speculative capital as their own, which is how they become functionaries.

Speculative capital, you recall, is capital engaged in arbitrage. Arbitrage is generating short-term profits from the price difference between any two “targets”: buying one low, selling the other high. The larger the difference, the bigger the profit.

If there is no abitrageable price difference, speculative capital will create it. That is volatility. Speculative capital generates profit from volatility, which is why it “crosses the boundaries” and is not “wedded” to one particular strategy.

What speculative capital abhors is any mechanism, regulation, for example, that might stabilize the market and reduce the volatility. That would be interfering with the lifeline of speculative capital. From Vol. 1:
Such capital is, by definition, “opportunistic” . it is constantly on the lookout for “inefficiencies” across markets which it can exploit. The opportunities arise suddenly and at random points in time, so the capital that hopes to exploit them must always be available; it cannot afford to be locked into long-term commitments and investments. The requirement to be opportunistic translates into the need to be mobile, to be nomadic and interested in short-term ventures.
Short-term, profit maximizing speculative capital then creates men of the kind we have met in this blog as mountaineers, philosophers, intellectuals and businessmen. John Roberts is speculative capital in robes.

But speculative capital is self-destructive. It eliminates the opportunities that give rise to it. Which is how we know John Roberts is speculative capital in robes: judging with no judicial principles, no attention to the public opinion and no consideration of the lower courts rulings or the case law, doing, in short, his work inside the crumbling apparatus of the Anglo-Saxon jurisprudence in particular and the overall “system” in general.

Sunday, July 4, 2010

21st century trick ...

Once upon a time, there was a gasoline called 97. The cost of this item was $1.80. One day, the governing body wanted to increase the price to $2.10. However, the governing body knows that if they simply increase price, that will affect their popularity. Which in turn affect their eligibility to continue to be governing body in next election.

Hence they come up with a perfect idea. They first introduce another brand called 95. Actually this is a much lower quality product than 97. In short, 97 simply means there is at least 97% of pure petrol in the gasoline. On the other hand, 95 only has 95% purity. However, they push out 95 as if it is a better quality product. They even add some 'addictive' into 95 to justify their claim its a better product. It was presented in a way that 95 will replace 97, and stay at the same price at $1.80

More than 90% of the consumer fall for it. Hence the transition of 97 to 95 went through smoothly. Majority of the consumers pay the same price for a lower quality gasoline while thinking they enjoy a great quality petrol. This is the power of marketing ...

A few more months pass by, its about time to gain even more profit. Hence 97 is released to the market again. It was released silently and the price of 97 is $2.10. Now this time they leave it to individual vendor to tell consumer how 97 is better than 95.

16.7% of profit has been gained without a single complain from the public. You have to admit this is a fantastic marketing gimme. Even if you see it coming like I did, even if you wrote letter into the authority request for action taken .... but the majority of the consumers were falling for it, hence there is really nothing you can do about it, like I was, no matter how hard I tried. We just have to admit ... it was a gimme well played.

I waited more than 6 months to release this article. What do you think ? Do you still think this governing body has taken good care of your interest ? Or do you believe this article has some truth ?