Watergate and Benghazi Simplified

In 1905, George Santayana, the celebrated philosopher,  in The Life of Reason (Vol. 1, p.284 – Reason in Common Sense) concluded that “those who cannot remember the past are condemned to repeat it.”

                                              SIX  SIMPLE  FACTS

                                                                1.

  •  In 1972 the 38th President of the United States of America was running for re-election.
  • In 2012 the 44th President of the United States of America was running for re-election

                                                                 2.

  • In 1972 the Whitehouse dismissed the break-in at the headquarters of the Democratic National Committee at the Watergate complex in Washington, DC as a third-rate burglary by over-zealous political operatives, later proven to be knowingly false.
  • In 2012, the Whitehouse dismissed the terrorist attack at the diplomatic mission in Benghazi, Libya as a spontaneous demonstration in response to an anti-muslim internet video, later proven to be knowingly false.

                                                                 3.

  • In 1973, after the 38th President of the United States of America won re-election, the facts of the Watergate break-in began to emerge over repeated denials by Whitehouse officials.
  • In 2013, after the 44th President of the United States of America won re-election, the facts of the Benghazi attack began to emerge over repeated denials by Whitehouse officials.

                                                               4.

  • In 1974 Whitehouse tapes were revealed.
  • In 2014 Whitehouse emails were revealed.

                                                                5.

                                                                  6.

  • The 38th President of the United States of America resigned.
  • The 44th President of the United States of America    ???

An oversimplification?  Perhaps. Only time will tell the rest of the story!

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States Rights Trumps Affirmative Action

     Given the historical fact of racial discrimination in America, I have never understood the justification for selecting a black applicant over a better qualified white applicant for college admission solely on the basis of racial preference when the white applicant had nothing whatsoever to do with the racial discrimination that once existed. This perverse, reverse racial discrimination is the objective of many affirmative action college admissions policies.

      In 2003 the United States Supreme Court (Supreme Court) upheld the affirmative action admissions policy of the University of Michigan Law School (Grutter v. Bollinger) and struck down the undergraduate affirmative action admissions system of the University of Michigan (Gratz v. Bollinger).  In 2006 a majority of Michigan voters  approved the Michigan Civil Rights Initiative to amend the state constitution to prohibit any form of racial preference in public education, employment and contracting. Last week the Supreme Court upheld the right of Michigan voters to do so by a 6-2 margin in Schuette v. Coalition to Defend Affirmative Action. This decision is certain to take its place among the landmark decisions of the Supreme Court on States Rights.

      In a disgraceful, ranting, 58-page dissenting opinion, devoid of coherent legal analysis on the issue before the Court, Justice Sotomayor, joined by Justice Ginsberg, accused the majority of voters in Michigan of being racist in approving the constitutional amendment. The absurdity of this accusation becomes apparent when it is understood that the language of the constitutional amendment approved by Michigan voters is patterned upon language that is replete throughout the Civil Rights Act of 1964.

      As with most ill-conceived public polices, the pendulum of public opinion is whittling away at the shaky foundation of affirmative action. Commonsense tells me that it is only a matter of time until the Supreme Court declares affirmative action unconstitutional, unless enough states, following the example of Michigan, outlaw it first, which commonsense also tells me is likely to happen now that the Supreme Court has opened the door.

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The Changing Game of Golf

     The recent PGA Announcement that the Legends of Golf tournament on the senior Champions Tour was moving under new sponsorship from Savannah, Georgia to a new venue at Ridgedale, Missouri where a nine-hole par 3 course would be used in official competition made me realize that the venerable game of golf was profoundly changing. In making this historic announcement, PGA Tour Commissioner, Tim Finchem stated:

We believe the inclusion of this dramatic short course will demonstrate to a time-crunched world that par-3 golf is fun, entertaining and a worthy alternative for golfers.

     As an avid golf fan and competitive amateur golfer, I began to re-examine the game and my future role in amateur golf. What has changed since 1954, the year I began playing golf at age 11 and the year Arnold Palmer joined the PGA tour?

      The first thing I thought about was distance – the length of a golf shot. I did some research which confirmed what I had observed over the years, namely, that circa 1980 the golf ball began to travel significantly farther than it ever had before. Take the Driver, for example. Back in the 1950’s, 1960’s and 1970’s, when reliable driving statistics were not available,   230 yards was considered to be a very good drive by amateurs and professionals alike. While driving distances were increasing in the 80s, reliable statistics demonstrate that from 1980 to 1990 no tour player hit a driver more than 280 yards on average; but by 2000,  fifteen percent (15%) of  tour players hit drivers more than 280 yards on average; and by 2011,  ninety percent (90%) of tour players averaged more than 280 yards with a driver, with 21 tour players driving the golf ball more than 300 yards on average, and no tour players averaging less than 260 yards with a driver.  See PGA Driving Statistics over the Decades. PGA Driving distance statistics remain much the same in 2014 through the Heritage last week. See PGA Statistics Off the Tee. The reasons for this phenomenal increase in distance are not so important as the fact that the distance a golf ball is hit by a touring professional today is simply not relatable to the average amateur golfer, whatever handicap (man, woman or junior) and regardless of equipment used. I was reminded of this fact up close and personal last week when I walked the fairways of Harbour Town Golf Links on Hilton Head Island, South Carolina as a Shotlink Walking Scorer at the Heritage.

      The next thing I thought about was pace of play. In the early 1960s,  a foursome of  teammates on my college golf team would play 36 holes in 6-7 hours  walking the course  and carrying their golf bags. Sure we were young and strong college kids back then,  but that does not explain why, with golf carts whisking amateur golfers from shot to shot today, rarely does a foursome complete even a casual round of golf  in less than 4 hours. A 4+ to  5+ hour round is normal today for most amateur tournaments using golf carts, especially senior tournaments; and  today a twosome or threesome of young, strong, walking touring professionals with professional caddies rarely complete a round in a tour-sanctioned event in less than  about 4 1/2 hours. The reasons for slow play are not so important as the fact that slow play has generally proven impossible to eliminate in the game today.

      Finally, I thought about affordability of the game. Even with the decline of private golf clubs and the growth of quality and more affordable public and semi-private golf courses, a round of golf with the latest equipment is still a relatively expensive proposition for most people, especially for junior golfers on whose shoulders rest the future of the game.

      These factors – distance, pace of play and affordability – negatively affect the popularity of the amateur game today and the PGA and USGA have taken notice because they know that the future of the game is at stake. To understand what is changing in the game of golf and why, click on the following links to learn about the Tee It Forward and While We’re Young  initiatives of the PGA and USGA, as well as serious proposals for a 12-hole golf course,  a 15-inch Cup and Limited Distance Golf Balls.

      So what does all of the foregoing have to do with law or politics? My answer is EVERYTHING because the game of golf has been an integral part of the fabric of American life for so many years. Commonsense tells me that the game will change along with almost everything else in American life. The only question is whether the changes will be healthy for the American way of life ….but that is a subject for another day. Leave a comment and subscribe. Good Day!

High Frequency Trading and the Law

     I have been an investor for most of my adult life, so I had more than just a passing interest when Michael Lewis claimed in an interview aired March 31, 2014 on 60 Minutes that the stock market was rigged in favor of high frequency traders (HFTs). Until then I had never heard of HFTs. What I learned about HFTs from Mr. Lewis in his book, Flash Boys – A Wall Street Revolt , is fascinating and astounding! HFTs, armed with high speed computer systems, operate after an order to buy/sell a stock is submitted to a stock exchange but before the stock exchange actually fills the order, a few milliseconds. No wonder I never heard of HFTs before now; why would I care what happens in those few milliseconds? All I cared about was whether my order was filled at the best market price which I had naively assumed happened routinely as the law required. See Wikipedia for the history of high frequency trading

      HFTs spend enormous sums to configure and constantly update their computer systems with the latest high speed hardware and software and, importantly, to locate that hardware in close proximity (time-wise) to the public exchange computers that match buy and sell orders. This investment in speed enables HFTs to acquire information about market conditions milliseconds before the investing public, which is plenty of time to front run the markets to the advantage of the HFTs at the expense of the investing public. Front running generates millions of unnecessary trades and in the process diverts billions of dollars of investor funds into HFT coffers annually. Read Flash Boys for a detailed and documented explanation of front running as practiced by HFTs.

      Many Wall Street insiders understood how HFTs ripped off the investing public but went along and kept silent out of  short-sighted self-interest because they were profiting from the heightened trading activity generated by HFTs …. until one day when Mr. Brad Katsuyama, head of trading operations at Royal Bank of Canada (RBC), decided enough is enough! Mr. Katsyama quit his lucrative job at RBC to form the IEX stock exchange which opened on October 25, 2013 and is proving every day since then that public stock exchanges can run just fine without HFTs and their predatory high-speed trading practices. Read Flash Boys to understand the role Mr. Katsuyama played in jolting the world’s stock market money managers out of their historical complacency and silence.

      Front running is clearly undesirable, but is it illegal? Wikipedia says, “Front running is the illegal practice of  a stockbroker executing orders on a security for its own account while taking advantage of advance knowledge of pending orders from its customers.”  In addition to begging the question, the analogy to stockbrokers does not fit because HFTs are not stockbrokers; they have no customers or clients and they trade exclusively for their own accounts. HFTs are not investors either because they rarely hold a stock position at the end of the trading day. HFTs are simply gamers who play the stock markets in much the same way card-counters in a casino play blackjack. In the wake of Flash Boys, the U.S. Attorney General, New York Attorney General, FBI and the Securities and Exchange Commission have launched investigations into high frequency trading.

      When I was practicing corporate law, I learned something about the illegal practice of insider trading – profiting from advance information not available to the public, which is exactly what front running HFTs do. Commonsense  tells me that if it looks like a duck, quacks like a duck and walks like a duck, it is probably a duck. It seems to me that upon careful analysis any experienced practitioner or learned professor in the securities law arena would readily conclude that front running as practiced by HFTs constitutes illegal insider trading under current securities law.

     HFTs, and the Wall Street brokers and banks that support them, have created an extremely complex public stock market with increasing, unexplained volatility and “glitches” causing many American investors to simply opt out. This unhealthy trend continues today in stock markets worldwide that are patterned after the U.S. stock market. If front running is not illegal under current law, or there is some doubt, sound public policy demands that the practice be made explicitly illegal with stiff penalties for violations.

      Good Day! Please subscribe and stay tuned for Jimmy Day’s commentary on another topic on another day.

In the Name of Environmental Protection

During the period when the principal environmental laws of the nation were enacted I spent a lot of time in Washington and state capitols lobbying for reasonable environmental regulations to clean up the steel industry’s air emissions and wastewater discharges. Steel industry executives recognized then that cleanup was needed, but they also knew that it would be costly and could not be accomplished overnight, as prominent leaders of the environmental movement were then demanding. If steel industry employment and steel prices were to remain stable, which was critically important to the economic well-being of the nation, a commonsense approach to environmental regulation needed to prevail and, for the most part, it did during my days representing the steel industry (1973-1999).

In the 21st century, however, commonsense has all but disappeared as rules and regulations adopted in the name of environmental protection without congressional approval, are placing unreasonable financial burdens on what is left of American industry today.

A recent case-on-point comes from South Carolina where Palmetto Electric Cooperative, Inc., a venerable and reliable supplier of cheap electricity, is now soliciting its customers to help stop environmental regulation of the coal industry that is threatening to drive up the price of electricity to unreasonable levels and drive the coal industry out of business. Mr. G. Thomas Upshaw, chief executive officer of Palmetto stated in a recent email to customers:

“As member-owners of your electric cooperative, your help is needed in sending a message to the Environmental Protection Agency (EPA) in Washington to reconsider regulations that they are proposing to eliminate coal as a generation fuel. Coal is the most economical source of power for South Carolina and many other states. If Santee Cooper, our power supplier, were forced to close ALL of their coal fired plants and replace them with a mix of nuclear and natural gas, the average monthly cooperative electric bill would increase 54%. For the average electric bill that would mean a $79 increase.”

Mr. Upshaw further explained the situation in an open letter entitled STAND WITH US TO KEEP POWER AFFORDABLE

If this kind of  extreme regulation in the name of environmental protection continues, industrial production will continue to decline with more job loss and price increases beyond what middle class people can reasonably afford, threatening the economic strength of the nation.

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Blog or Blawg – Why the Goofy Names?

While I have long understood that a ‘blog’ or ‘blawg’ is a collection of comments written by somebody on some topic posted on a website, I did not understand why the website was called a ‘blog’ or ‘blawg’ until I read Lesson 1 in Blogging in One Hour FOR LAWYERS by Ernie Svenson, who clearly explained the derivation of these goofy names on page 1 of his book:

” The blog developed to allow posts with new information to appear at the top of a page, pushing older content down. Since a journal is a form of log (as in a ship captain’s log), the new tool was called a web log, then shortened to weblog, and finally to blog.

Denise Howell (an early law blogger with a site called Bag and Baggage at  www.BagandBaggage.com) further modified the term to blawg to connote a blog written by a lawyer, or one that covers a legal topic.”

This was welcome news to me and is perhaps newsworthy to other novices in the blawgosphere.  Any lawyer thinking about a blawg should first read Mr. Svenson’s book.

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Commonsense Commentary and Analysis on Law and Politics