SCOTUS Win For Janus Capital

Janus, a Denver based mutual fund group with its headquarters across the street from the Cherry Creek Mall won a major victory in the U.S. Supreme Court today. In the group, different mutual funds are organized as separate legal entities owned by their investors, and each fund has a management and control arrangement with the master entity. The ruling was a 5-4 decision for Janus along the usual conservative-liberal lines with the conservatives prevailing.

One of the funds made a statement in a prospectus that gave rise to securities fraud liability. The issue was whether the master entity could be held legally liable for the statement made only in the name of the individual fund because it provided management services and had effective control of the entity. Continuing a trend of the U.S. Supreme Court to limit secondary liability for securities fraud (e.g. disallowing aiding and abetting liability in private securities litigation), the court ruled that only the fund was legally responsible for the mistatement made in its prospectus about its fund. As a result, the damage is confined to a single entity and since there is substantial identity between the people hurt by the misstatement and the owners of the fund, the amount of financial gain available to the people bringing the suit may be modest.

The fund might have legal recourse against the master company for a breach of duty in the management of the fund that caused the misstatement to be made and caused the fund to incur liability, but given the pervasive control of that relationship by the master company, it is unlikely that such a suit will be brought in the absence of a derviative action (i.e. a suit against a third party in the name of the company brought by the owners of the company because the company itself refuses to act) by the fund owners, and such actions rarely prevail. The U.S. Supreme Court ruling, however, means that in this and many similar arrangements, the master company will have no liability for statements made in the name of a mere fund in a prospectus.

Essentially, the U.S. Supreme Court held that involvement in ghost writing a document does not suffice to pierce the corporate veil for private securities fraud lawsuit purposes.

READ MORE - SCOTUS Win For Janus Capital

Denver Fires Bad Cops

The City of Denver has taken the encouraging move of firing two more bad cops who lied to investigators about using excessive force, despite videotape to the contrary.

Manager of Safety Charles Garcia has terminated two officers, Kevin Devine and Ricky Nixon, for lying about details in an excessive force case.

The two were accused of excessive force during an incident caught on camera outside the Denver Diner in 2009. The videotape shows an officer with a club pushing several women to the ground. A second officer is seen spraying mace into the face of a woman who is kneeling after being brought to the pavement by the first cop.

The two officers are the third and fourth terminated by Garcia, who took office last month. He fired Officers Devin Sparks and Randy Murr for "deceptive acts" in the case of Michael DeHerrera, who Sparks threw to the ground as he talked on a cell phone in LoDo.

The long overdue trend in still very welcome.

Interim Mayor Bill Vidal has also recommended the removal of a step in the process of disciplining police officers that has become redundant, delays the process and has favored unreasonably mild discipline for bad cops. Most Mayoral candidates in the current Denver Mayor's race favor the change.

READ MORE - Denver Fires Bad Cops

Metro State To Become Denver State University

Whatever. The Denver Urbanism blog has the story.

READ MORE - Metro State To Become Denver State University

Dex v. Seattle

Dex, a distributor of phone books is challenging a Seattle ordinance allowing people to put themselves on a "no phone book" list, as a violation of its First Amendment rights in a suit filed November 15.

I have about eight phone books in a cabinet in my house that almost never get used for anything. My children show no interest in learning how to use one, my wife doesn't like the small print. I use one half a dozen times a year, and don't use three-quarters of the phone books I receive at all. I'm a phone book advertiser myself, but increasingly even they are pitching the Internet component of their business, rather than the paper copy element.

Opt-out laws, in general, have been upheld against constitutional challenge in multiple cases cited in the link above to a post by Venkat Balasubramani at Eric Goldman's blog including Rowan v. United States Post Office, 39 U.S. 728 (1970)(indecent junk mail); State of Mo. v. American Blast Fax, Inc., 323 F.3d 649 (8th Cir. 2003)(junk faxes); FTC v. Mainstream Marketing Services, 345 F. 3d 850 (10th Cir. 2003) (no call list).

The main constitutional objections raised by the Yellow Book companies to the statute are that:

- the statute singles out yellow pages from all other types of unsolicited pamphlets, without reference to the harms sought to be remedied;
- the City made exceptions to satisfy local business interests, such as business associations;
- the ordinance also contains a licensing scheme which is at best highly suspect;
- the statute compels the yellow pages publishers to publish an unwanted message (in the form of opt-out notices and messaging on the cover)
- the statute charges the yellow pages companies to dispose of the books even though the unwanted or discarded books are recycled or disposed of by the recipients;
- yellow pages companies already employ opt-out mechanisms and have no interest in delivering yellow pages to recipients who do not want them (there's no indication that the opt-out system set up by the City will be more effective).

The objection to a statute that involves yellow pages being a content based restriction that favors local interests isn't particularly strong, because the content basis ties into the resident choice to be on the opt-out list, and any flaws in it could probably be easily remedied with an improved definition (e.g. printed material of 150 pages or more with commercial content not expressly requested by the resident, not distributed by an organization of which the resident is a member, and not delivered by the U.S.P.S.).

Any problem with the requirement of a $100 license fee, the reporting requirement (to list the number of yellow pages distributed), or the unwanted message also seems doubtful, particularly to the extent that any defect in the definition of yellow pages is cured. All sorts of businesses are required to make disclosures about laws that have an impact on them, the reporting requirement is no more onerous than constitutional requirements applied to every periodical distributor, and the license fee is not out of line with business privilege licenses that apply to all businesses (and could be made a part of a general business privilege license by requiring the fee and disclosure of yellow book distributions to all business license holders). Allowing licenses of regulated businesses that don't comply to have their licenses yanked also seems constitutional.

No of the prior law on opt out has ever suggested that a private opt-out option makes it constitutionally impermissible to have a legally required opt-out option, and there is good reason to think that a government administered one would work beter.

The most interesting challenged provision is that one that provides for "a 'recovery fee' designed to recoup recycling costs ($0.14 per book and $148.00 per ton of yellow pages)." Similar costs are imposed on tire companies and oil change companies, and it is hard to see how this fee is materially different from a constitutional perspective. Arguably, this makes the content discrimination claim stronger, but one alternative would be to apply the fee of $148.00 per ton to all unsolicited paper (something on the order of 40,000 to 200,000 pages) distributed (for profit or in excess of a certain number of pages or both) outside the U.S. Postal System (where federal pre-emption probably applies). While this fee would be a notable burden on yellow page companies, it would still be a modest part of their total production costs, would be very modest when applied to other door to door flier distributors.

On the whole, the Seattle law seems either constitutional or easily remedied, sensible, and worth considering duplicated in Denver once constitutional concerns are resolved in Seattle's case.

READ MORE - Dex v. Seattle

One in seven marriages is mixed race.

One in seven (14.6%) of new marriages in 2008 and 2009 is mixed race (in a method that counts a Hispanic-Anglo marriage as mixed race), according to a recent New York Times article reporting on a Pew Research Center study from June of last year. In 1960, the figure was 2.4%.

Among all newlyweds in 2008, 9% of whites, 16% of blacks, 26% of Hispanics and 31% of Asians married someone whose race or ethnicity was different from their own.

Gender patterns in intermarriage vary widely. Some 22% of all black male newlyweds in 2008 married outside their race [in 1960 the percentage was 1.3%], compared with just 9% of black female newlyweds [in 1960 the percentage was 0.9%]. Among Asians, the gender pattern runs the other way. Some 40% of Asian female newlyweds married outside their race in 2008, compared with just 20% of Asian male newlyweds. Among whites and Hispanics, by contrast, there are no gender differences in intermarriage rates.

Rates of intermarriages among newlyweds in the U.S. more than doubled between 1980 (6.7%) and 2008 (14.6%). However, different groups experienced different trends. Rates more than doubled among whites and nearly tripled among blacks. But for both Hispanics and Asians, rates were nearly identical in 2008 and 1980. . . . ["High levels of Hispanic and Asian immigration over the past several decades helped drive both seemingly contradictory trends."] . . .

Native-born Hispanics are more than three times as likely as the foreign born to marry a non-Hispanic. . . native-born Asian-Americans are nearly twice as likely as those who are foreign born to marry a non-Asian. . . Among Asian men, the native born are nearly four times as likely as the foreign born to marry out. Among Asian women, the native born are only about 50% more likely than the foreign born to marry a non-Asian.

For U.S. born people, outmarriage rates were 41.7% for Asian men, 41.3% for Hispanic men, 37.4% for Hispanic women, and 50.3% for Asian women. For foreign born people, outmarriage rates were 11.7% for Asian men, 11.3% for Hispanic men, 12.2% for Hispanic women, and 36.8% for Asian women.

Mixed race marriage is much more common among the young than the old.

There are strong regional trends. The outmarriage rate for African-Americans in the West is 38% compared to 15.5% nationally and 11.9% in the South. Whites are most likely to outmarry in the West at 15.5%, compared to 8.9% nationally and 5.5% in the Midwest. Hispanics are most likely to outmarry in the Midwest (41.0% v. 25.7% nationally), although Colorado at 35% has a higher outmarriage rate among states with statistically significant numbers of Hispanic outmarriages than any other single state. Asians are most likely to outmarry in the South (36.8% v. 30.8% nationally). Outmarriage for whites is 20% or more in Nevada, New Mexico and California. Black outmarriage rates are 36% in California, the higher percentage in single states with a statistically significant number of black outmarriages, in contrast the lowest percentage of black outmarriages where numbers are statistically significant is found in North Carolina where the percentage is 9%.

These regional trends seem to be driven by a combination of outmarriage being more common when there are more other race and fewer same race options available, and by Hispanics and Asians being more likely to be U.S. born in areas with higher outmarriage rates. Differences in regional attitudes surely do have an effect, but a less intense one than one might expect.

The more education you have, the more likely you are to outmarry.

About 41% of mixed race marriages are Hispanic-white, about 16% are both non-white, about 15% are Asian-white, about 11% of Black-white, and 17% are "other" (which includes Native American, mixed race and "some other race").

In terms of expressed views, far more religious people are uncomfortable with having a child marry an atheist than are uncomfortable with having a child marry something of another race. Whites in 2009 were considerably less likely to have a problem with a child marrying someone of another race than they were in 2001, while blacks were more concerned in 2009 than in 2001 (although still more accepting of mixed race marriages in all time periods with all other races).

Caveats

This observation comes with caveats:

[S]ome sociologists say that grouping all multiracial people together glosses over differences in circumstances between someone who is, say, black and Latino, and someone who is Asian and white. (Among interracial couples, white-Asian pairings tend to be better educated and have higher incomes, according to Reynolds Farley, a professor emeritus at the University of Michigan.)

Along those lines, it is telling that the rates of intermarriage are lowest between blacks and whites, indicative of the enduring economic and social distance between them.

Any study of marriage rates also has to be conscious of the increasing number of parents and intimate couples were are not married. For African-American women, for example, most mothers are not married. The higher rate of interracial marriage for African-American men than for African-American women, for example, could reflect non-African-American women in serious relationships with African-American women placing a greater importance on recognizing that relationship through marriage than African-American women in serious relationships with non-African-American men do.

Analysis

This is a little less than half of what one would see if marriage were entirely random relative to race and ethnicity, although a significant share of the divide between truly random and what is seen is due to neighbor effects (i.e. mixed race marriages tend only happen to the extent that there is someone of another race geographically nearby), rather than actual race or ethnicity based selection of a spouse.

Intermarriage rates are higher for the college educated, despite the fact that the ethnic diversity of college campuses is considerably lower than the ethnic diversity of society as a whole. The gap between the intermarriage percentage that you would expect by random chance if people married others with the same level of education, and what is actually observed, is quite modest among college graduates, but its quite high for high school dropouts.

Asian and Latino intermarriage seems to fit the general profile of immigrant assimilation. Second and later generation immigrants assimilate very fully into their communities linguistically and otherwise, and often outmarry. The future of Asian and Latino marriage patterns may follow that of the "Southern European" identity, which ceased to be very ethnically distinct in the United States in a way that drives marriage patterns. Yet, the WASP v. non-WASP divide, which distinguished people from Catholic and Jewish immigrant populations, from Ireland and Southern Europe in the case of most of the Catholics, and from Eastern Europe in the case of most of the Jews, from non-immigrant American whites, has faded greatly from our ethnic consciousness.

My intuition is that interracial marriage rates for African immigrant populations (e.g. recent immigrants from Ethiopia and Kenya), are probably more similar to Latino and Asian immigrant populations than to African-American populations. For example, immigrant Africans in Denver's public housing projects are much more likely to be married than African-Americans in Denver's public housing projects, and there is probably less discrimination against African immigrants than there is against African-Americans in economic and social contexts.

Razib notes that "The article ignores the elephant in the room: that Americans do not treat African ancestry like they treat Asian (or Amerindian) ancestry. Someone with a black American parent may identify as mixed race, but there is a great deal of social pressure and expectation, such that they are de facto viewed as black." But, I am not so pessimistic.

While African-American outmarriage rates are lower than for U.S. born Hispanics and Asians (a little more than half as much for African-American men, and a quarter as much for African-American women), this has changed dramatically in the last fifty years when it was almost zero, and outmarriage rates have continued to surge in the last twenty years.

Anecdotal evidence that I have encountered, at least, suggests that "one drop" rule notwithstanding, that mixed race children with a black parent and a white parent are indeed a major bridge between the two groups in social settings. A many fold increase in the number of children of black and non-black parents, probably under reported by statistics that only measure actual marriages, means that the bonds between these two ethnic communities in the United States are probably much stronger than they were a generation or two and getting stronger all the time.

Social Class Implications

This elephant in the room is also shrinking as social class divides based on race and ethnicity fades.

The increase in rates of African-American outmarriage closely mirror the growing ranks of the black middle class in the same time period against a background of very low social class mobility in the United States generally..

Despite the fact that almost every statistic you may see on African-American socio-economic success is discouraging, in the big picture in the medium to long term, the story has been one of remarkable socio-economic progress.

Indeed, the rise of the black middle class made possible by the Civil Rights Movement of the 1960s, and social gains of second generation immigrants, particularly Hispanic immigrants, who have been able to advance further socio-economically than parents who were not native English language speakers and were not assimilated into American culture, explains a great deal of all of the social mobility in the United States in the last forty years. The flip side of this optimistic fact, is that social class mobility is probably considerably lower in the United States for Anglos than the overall figures suggest.

On the other hand, some of the apparently high social class mobility seen in many European nations may be a product of immigrant assimilation patterns seen in the United States, as most of the developed countries of Europe has experienced considerable immigration in recent times. Immigration in the United States in recent years has been typical of the developed world generally.

The seeming immutability of social class boundaries among American whites is remarkable given how fiercely we deny that social class divides exist in American culture (something that our obsession with race has helped make possible), and how irrelevant the distinctions between white ethnics have become in our society.

Perhaps we truly are developing a meritocratic society and perhaps social class divisions based for a couple of generations on real merit are more stable than divisions based on proxies for merit. But, it may also be the case that the weak social welfare system in the United States makes where you start more outcome determinative than it is elsewhere.

New Tribes

Professor Rainier Spencer, who is quoted in the article notes: “The mixed-race identity is not a transcendence of race, it’s a new tribe. A new Balkanization of race.” This may be the case. Definitions of race evolve and have changed in almost every census. The Latin American experience, the French colonial era experience in North America, and the experience in places like Jamaica and South Africa during colonial eras, has been to conceptualize mixed race identities as a "new tribe" or as "new tribes."

If you run mathematical models in which some people in each ethic category have strongly endogenous attitudes and others do not, in a surprisingly small number of generations, almost everyone but those with strongly endogenous tendencies ends up as mixed race, although the smaller a group is, that more quickly this happens.

The fact that more than half of U.S. born children of immigrants still do in marry, and that anecdotal evidence suggests that preferences are similar for third and later generation individuals to those of second generation individuals, suggests that some version of this kind of model makes sense.

My sense in reading political and identity politics rhetoric has been to see a tendency to conceptualize a large "brown" category that includes Hispanics, mixed race people of all types, North Africans, South Asians, Southeast Asians, and Arabs, that has been gaining traction relative to the "People of Color" conception that includes all non-Anglos. The latter is probably easy to measure with linguistic databases like Google's new toy, but the former, because "brown" is used in so many senses, would be harder to measure.

In the same vein, I find it quite interesting that white Southerners in the United States increasingly identify as "American" in ethnicity, while whites outside the South tend to see a connection to some ancestral place of origin in Europe. This is more than a question of style. It has some authentic base in reality and history.

For example, most whites outside the American South practice a religion that has clear historical roots in Europe. Lutherans, Presbyterians, Anglicans, Jews, Orthodox Christians and Catholics, for example, all practice religions with direct European sources and often have religious denominations that remain in communication with parent denominational authorities in West Eurasia. In contrast, the Evangelical Christians of the American South have far more cryptic ties to their European forebears. Colonial era European Baptists, for example, were closer theologically and in liturgical practice to American Quakers and Anabaptists than to the Southern Baptists whose denomination is the predominant white Baptist denomination in the United States. Evangelicals in Latin America, Africa and Asia trace their roots to the United States, not the other way around.

There are multiple narratives of people from the American South touring Europe and discovering just how non-European they are culturally, despite the fact that they look similar physically. An Evangelical Christian white Southerner is more distant culturally and in values from the European norm than a Bostonian Anglican, a Lutheran from Saint Paul, or a white Catholic in Buffalo. The 18th century Scotch-Irish society that those white Southerners who do not identify as "American" identify with barely exists any more outside United Kingdom's territory of Northern Ireland, as the herding and marginal farming economy that sustained that culture has faded away. Politically, the federal election Republicans of the American South (who are overwhelmingly white and whose politics are the overwhelmingly dominant ones of white Southerners) have few parallels in Europe apart from the far right neo-fascist parties.

The American South from the 1700s to the mid-1800s is really one of the better cases in recent history of ethnogenesis. In religion, culture, politics and dialect this cauldron created an ethnicity so distinct from its antecedents that its sources aren't easily traced to a single source anywhere. Few other places in the United States have been more of a melting pot and less of a mixing bowl.

Indeed, the fusion of this new culture and worldview has been so intense that ethnically identified non-Evangelical Christians have been increasingly pressured in reaction to abandon their more specific ethnic ties in favor of a united Pan-American mainline, liturgical Christianity. First, ethnic divisions within major denominational distinctions within Christianity by fusions of ethnically divided denominations of Reformed Christians, Lutherans and Orthodox Christianity, respectively, as these ethic divisions faded in favor of purely denominational ones going back to pre-ethnic division roots. Increasingly, institutions like the National Council of Churches and ecumenical efforts between particular mainline denominations are erasing even that level of division.

Ethnically and culturally, the descendants of Northern, Midwestern and Western white ethnics have been dissolved into an ethnicity that outsiders have described a "Yankee," as inapt as that may be to describing their real roots. How long will it be before whites outside the South start to identify their ancestry as "European" rather than Italian or German or Danish or French or English, in contradistinction to the "American" of Southerners?

Will people who have roots in both Europe and Asia start to identify themselves as "Eurasians," in ancestry, as distinct from Africans or those who self-identify as "Americans"?

I also think that it is possible that we may increasingly start to see a divide in self-identification between African-Americans from the South, and those who are from outside it.

I do think that racial categorization at a social level is basically inescapable. No matter how much the educational establishment and social elite urge us to leave in Martin Luther King, Jr.'s truly color-blind society, I seriously doubt that it will happen, at least not in my lifetime or even that of my grandchildren. But, I do think that the racial and ethnic divisions of the United States will grow increasingly balkanized replacing many categories with the stark black-white dichotomy, and that as we reach a point where there is no majority race or ethnicity in the United States, that those distinctions will become less pernicious.

READ MORE - One in seven marriages is mixed race.

Friday Fragments

A few scattered half ideas for a beautiful Friday morning:

* It is highly annoying that perfectly good cell phones can't be switched from one mobile carrier to another, even though both carriers offer the essentially the same phone made by the same manufacturer to customers. Cell phone portability would be a great cause for the Fair Trade Commission, which is charged with regulating anti-competitive conduct by businesses, or the FCC, which regulates telecommunications.

* It would also be interesting to have consumer finance regulations that required cell phone, cable TV and satellite TV contracts that include phones or equipment to break out the service provision, telephone purchase, and finance charge components separately, to require that the finance charge component comply with generally applicable consumer finance laws, and for the FCC or FTC to then limit cancellation fees to the unpaid principal balance for the telephone purchase plus some statutorily limited amount for cancellation of the service contract. Landline phone companies and casualty insurance companies somehow manage in a regime where cancellation charges aren't permitted at all - surely phone companies could do something similar - indeed, loyalty discounts for long term customers at cell phone providers that don't have long term contracts and casualty insurance companies achieve a similar objective.

* Some area convenience stores have petitions in favor of allowing them to sell beer stronger than 3.2 beer. I'm all for it.

* Walker Stapleton's moonlighting job pays more than his job as state treasurer, although it doesn't appear to pose nearly as much of a conflict of interest. I'd personally favor a bill to prohibit all compensated moonlighting for "full time" state and local elected officials in the state accompanied by a substantial increase in pay for those officials. We shouldn't have to worry about any public officials being influenced by an outside source of income.

* I'd also favor a bill to make the Colorado General Assembly officially full time, to have it in session all year rather than 120 days, and provide each state legislator with 3 FTE of staff, while prohibiting all compensated moonlighting for them. Term limits play a much larger role in keeping the Colorado General Assembly a "citizen legislature" than its "part-time" status, and practically speaking, it is a full time job during the legislative session and at least a half time job outside the legislative session anyway due to interim committees, constituent service, and time spent crafting bills for the next session. The compressed session seriously compromises the ability of the general public to monitor what the state legislature is doing, to comment on bills, and to participate in legislative hearings. The lack of legislative staff is one of the main factors that gives lobbyists more power. The low pay for the legislature makes almost every state legislator beholden to a private employer or private clients for their livelihood while addressing the state's business and makes legislators more succeptible to influence from petty niceties from lobbyists that aren't prohibited by the state's gift ban.

* House Republicans want to end the Presidential public campaign financing law that costs about $600 million a year and is authorized by tax return checkoffs that are down about 75% from their peak. I have to agree. While I think that public financing is a much better way to deal with corruption in campaign finance than the existing regulatory regime, this particular version of campaign finance is delivering very little value and isn't so essential that it can't be cut. The decline in tax return checkoffs also show that it is has lost public support.

* RTD is considering asking for a 0.2 percent sales tax hike to help pay for overbudget FasTracks, a move that would bridge the gap but still require delays in finishing the project. Area majors have pushed for a 0.3 to 0.4 percent sales tax hike instead to get the project done sooner. Some of the hike would be compensated for by the expiration of an existing sales tax hike for other purposes (the stadium, I think). I believe that RTD has the better argument, as I don't think that voters have the stomach for a larger tax increase. Area mayors would be better off using their local government budgets to speed up construction in their areas than increasing sales taxes even more.

* It would be interesting to look at which countries have the best land use results and then to see what kind of land use regulation approaches they use.

*

A new democracy barometer from the University of Zurich and the Social Science Research Center Berlin (WZB) shows the development of the thirty best democracies in the world. Denmark, Finland and Belgium have the highest quality of democracy, whereas Great Britain, France, Poland, South Africa and Costa Rica the lowest.

Hello! What are these people smoking? Belgium is on the verge of disintegrating into two nations because its regions are utterly incapable of finding common cause. Deep distrust and lack of communications between the regions has reached the point where fake news stories about the other regions are taken seriously. It went months without a government because Walloons and Flemish parties couldn't agree on a governing coalition. Belgium is a basket case of democracy that is at the top of the list of countries where democracy is not working well

Right behind Belgium on the list, in fourth place, was Iceland whose national government just went bankrupt. Again, what were they thinking?

At the middle of the list, are Ireland at #15 and Spain at #17. Both have wildly unpopular regimes that are eliciting mass street protests and are fiscal basket cases that are en route to imposing unpopular austerity programs and are effectively as beholden to the bond markets as they are to their own people.

Great Britain, in contrast, ranked near the bottom of the list at #26, while it has its problems, seems to be getting along tolerably well and does not deserve such a low rating. It just successfully found a solution to a situation where no one party could command a majority in parliament with a palatable compromise. It is in the process of proposing electoral reforms to be more fair to third parties. It is tightening its fiscal belt in a manner far more sensible than either the austerity plans proposed by nations like Greece and Ireland that have been shoved down their throats by bondholders, or the ideologically driven cuts proposed by Tea Party Republicans in the United States. It has had its share of public discontent (particularly over increases in higher education charges) but has far less public discontent than many of the other countries on the list.

In short, the democracy index is profoundly and fundamentally flawed. Whatever it is measuring, it certainly isn't a sensible measure of democracy.

The press release from the source in German also provides link to a more detailed report. This explains that the index has three components: Freedom (individual liberty, rule of law, public sphere), Control (Competition, Mutual Constraints, Govern. Capability), and Equality (Transparency, Participation, Representation).

The basic problem is that it lets arbitrarily weighted components of democratic virtues overweigh things that are obvioius in the big picture, and focuses too much on process and too little on results.

READ MORE - Friday Fragments

Short Takes

* I went to the Burger King restaurant in Cherry Creek earlier this week to get a cheap breakfast sandwich while I waited for the bank to open. The location was previously famous for being the parking nazi of Cherry Creek North, aggressively booting people in its lot. This time, I had to wait several minutes for anyone who worked there to appear, even after calling out an "anybody home?" Their bathroom is also the skankiest in all of Cherry Creek.

* Radio stations in Denver are in a slump. I have twelve FM and six AM pre-sets on my car radio, which I regularly revise with the best available options on the airwaves. Yet, several times in the last week, the elevator music in retail stores around town has been fresher and more interesting than what I can hear on any of those eighteen stations.

* Science Fair is over for another year. Next up, History Day.

* What is with all of the little banks on and around 1st Avenue in Cherry Creek? There must be twenty of them in the neighborhood, most with just one or two locations. You'd think it was Bern, Switzerland, or Luxembourg, or the Cayman Islands. I almost never see anyone actually doing business there, but presumably they have enough customers to stay afloat. I presume that they are catering mostly to a high end, local market clientele making loans to businesses, real estate developers, wealthy individuals and medium sized businesses, but I'm really not entirely clear what the business model is, although it seems to be a very similar business model for all of the banks that are not retail customer oriented.

* Even though Denver was almost 20% below average in precipitation in 2010, the snow pack in all of the state's major river basins was well above average, and since that is what really matters most for both Front Range water users and for the Colorado tourism industry, it's all good.

* Justice Kagan wrote her first U.S. Supreme Court opinion on the subject of the proper way to calculate the car expense in Chapter 13 plan calculations. The ruling was 8-1 with only Scalia dissenting. I agree that her reading was the better interpretation of the statute (it disallowed the expense when there was no actual loan or lease on a vehicle that had to be paid). The court took the case because there was a circuit split on the issue.

* The Article I immigration court based in Denver has a new judge who is married to one of the ICE prosecutors in the Denver office who presses these cases. The new administrative law judge must "must recuse herself from any case directed by her husband" but I have real doubts about whether that is sufficient to remove the appearance of impropriety in this situation.

In an ordinary court, only part of the docket involves cases brought by the government. But, all of the cases before this administrative law judge will be brought by the office of which her husband is a part. The pervasive association the new immigration judge has with one side of every single case before her creates a clear appearance of impropriety. I can't imagine how I could possibly be impartial in her shoes. Immigration judges have immense discretion. Statistically, the judge a person with a case in immigration court is assigned to is the single most important factor in determining the outcome of the case. Inappropriate use of that discretion by immigration judges, mostly to the detriment of immigrants, has flooded the federal appellate courts in recent years, and has cast grave disrepute on the credibility of the immigration courts as institutions where any meaningful kind of due process exists. This development certainly doesn't help the situation. If the recusal were from all cases with ICE involvement, that would probably resolve the problem, but that isn't a viable option for an immigration court judge.

I feel for the couple, who are no doubt both very smart, competent immigration lawyers, each of whom has a good federal government jobs. Neither has personally done anything wrong. But, maintaining this kind of status quo, even with recusals from cases where the other is personally involved really doesn't cut it. In government contexts the concern is not primarily ex parte communications about particular cases or personal gain (the government lawyers don't win or lose anything as a result of the outcome of particular cases), but about bias towards one side or the other on the part of the office, which is just as strong even without personal involvement in the same cases. We are not such a parochial backwater in Denver that we have no choice but to have a conflicted immigration court system because no one else is up to the job.

* Once again, Denver cops are being sued in a police brutality case and fraudulent police report case arising from a January 2009 traffic stop. Westword has more details.

* Marginal Revolution is a superior blog that I will add to my sidebar in due course.

* The percentage of women in Colorado's General Assembly (41 out of 99) is the highest of any state in the United States. The national average is 23.4%.

* Republicans are constantly accusing liberals of inventing constitutional rights that aren't supported by the language of the constitution. But, these days, the shoe is on the other foot. John Tomasic at the Colorado Independent nails it with this headline:

King to Polis: Healthcare law infringes on right to have babies in garbage cans

He goes on to explain:

Iowa Rep. Steve King today on Capitol Hill at a Rules Committee hearing on the GOP plan to repeal the healthcare reform law. He ended up telling Colorado Rep. Jared Polis that the law is unconstitutional because, for instance, it forces uninsured women who deliver babies in garbage cans to buy health insurance. Polis, aghast, searched for words.

Isn't funny how the rights Republicans want to invent always seem to be ones you have no desire to actually exercise?

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Colorado Politics Recap

* Governor-Elect Hickenlooper is now Governor Hickenlooper. He's has the near impossible task of balancing the budget ahead of him, but at least the NY Times is writing nice stories about him and even the Republicans haven't gone into attack mode yet with our new Governor. Now we're in for an exciting four months of the legislative session including highlights like the redistricting of Congressional districts, with a partisan split between the State House and State Senate. The party line, shared with President Obama, is that Hickenlooper wants to create jobs. Despite having fewer tools at his disposal to do so, I have more faith that Hickenlooper will be successful than I do that President Obama will. We also have a new Republican State Treasurer and Secretary of State.

* We also have a new Mayor in Denver, Bill Vidal. Unfortunately, he is the guy is charge of the department that recently failed to adequately discipline two corrupt parking enforcement officers, until there was a public outcry over it. The caretaker administration will end this spring when a sucessor is elected in Denver's municipal elections. I'm starting to get calls from candidates' organizations (not personal ones) seeking my support. The last real race was in 2003, in which I supported Penfield Tate in the first round, and John Hickenlooper in the second. Hickenlooper had no serious competition in 2007. Tate is not running this time around.

* The report of a grand jury investigation into lies under oath and attempts to suborn perjury by Denver Police Officer Paul Baca that did not result in an indictment, despite denunciations of him in open court by a judge and recorded court testimony that strongly suggests he was lying, has been sealed by the Denver judge presiding over the case. The Jefferson County special prosecutor appointed to prosecute the officer has appealed the ruling but isn't allowed to comment on the grand jury report or the contents of the order closing it. It isn't that unusual for a prosecutor to ask that a grand jury report be sealed in order to permit the prosecutor to continue an investigation, perhaps with a future grand jury. But, it is quite unusual for a grand jury to write a report of its own, and even more unusual for such a report to be suppressed over the objection of the prosecutor in the case. Perhaps there are good reasons for doing so, but an appearance of impropriety results any time a high profile corruption prosecution is closed without full disclosure of what happened.

* One of the school board members in Greeley, Brett Reese, who is also a pretty difficult character in his role on the school board, is using his low power radio station to broadcast dubious and outrageous conspiracy theories about Martin Luther King, Jr. without even providing authorship for the sentiment, as we head into the holiday named after the Civil Rights leader. It is his free speech right to do so, but it also shows bad judgment on the part of someone who should be a role model for the students in the district. Respecting other people's right to say stupid things is honorable. Using your own resources to say stupid things just shows that you're stupid. Also, while the school board member's official line is that he is simply allowing people to air concerns about a cult of personality, it sure sounds like crackpot conpsiracy theory racism to me. Oh, and he's also decided that the way to respond to the controvery he has created is to carry a gun. Brett Reese looks a lot more like a nutjob who is an embarassment to the Greeley. Fortunately, as just one member of the Board, he can't do much harm by himself and still belongs in the "mostly harmless" and "do not feed the troll" category.

* What sort of jerk steals somebody's else's dead wife's ashes? As this story comes from Colorado Springs, it is hard to know.

* Daily Kos and Colorado Pols both have compelling documentation today and in the past few days of the pattern of Tea Party's incitement of violence with its campaign rhetoric. I don't have the stomache to post about it at the moment, but it is there is you are so inclined.

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Outsourcing The House

You probably don't have a cook, a butler, a live in maid, a stable boy, or a live in gardener. It isn't unlikely, however, sometimes pay someone to cook food for you and deliver it to your table, to mow your lawn, to clean your house, to plan your child's wedding, to press your shirts, or to maintain your car. The personal services industry employs many people, but today, those people are organized as independent contract small business people who provide the same service to many customers, rather than as household servants.

Suppose that you take that idea one step further. Suppose that in addition to outsourcing the work of people who work in your house, you outsource the house as well. We're already seeing this happen, and the trend is likely to continue.

Outsourcing the Workshop, Shed, Basement and Attic

One of the first instances of outsourcing household space was the safety deposit box which is a substitute for a household safe.

Many gun clubs offer safe storage of firearms intended for hunting or target shooting or as collector's items, away from your home, an increasingly relevant consideration in an area where many dorms and public housing don't permit them, and where prudence and state and local laws and ordinances require safe storage of firearms or impose liability for failure to safely store firearms. This obviously doesn't make sense for a firearm kept to defend one's home against intruders, but many firearms aren't intended for that purpose and many people have multiple firearms and don't need all of them to be in their home at once.

There is a whole industry that sells storage units to people who lack basements or sheds or attics or unused closets to hold their infrequently used stuff. These used to be limited to glorified garages (and many offer RV parking as well), but now there are climate controlled storage units and units specially designed to handle special contents like wine collections. Who hasn't seen one of the "PODS" parked in front of someone's house to be filled, taken away, and then retrieved (possible at a new and different house) later? What if there were a business that had mini-PODS that were tucked away with your out of season clothes that sent you a reminder card at a date you set when you thought you might want them again?

There are already several off site file storage companies, and "cloud computing" which stores data and computer program resources at some remote Internet accessible location is becoming commonplace, even for household users.

Down the road from my office is a place that rents workshops and studios for people who don't have their own.

Reading, Office Space and Study Space

Many new developments have community mailboxes rather than mailboxes attached to individual houses. One could imagine a neighborhood "reading room" that would be sort of a mini-library, with a full compliment of newspaper and magazine subscriptions, coffee and teapots, and a small stash of trashy reading - many campgrounds across the American West have that kind of space.

My own office, while fairly conventional, includes use of a break room, reception services, copying machines and scanners, fax machines, a lobby and conference rooms that are shared by the suite, and if I wanted to have a home office while not having real estate nice enough to meet with clients, I could arrange to have a "virtual office" with all of the services except the room devoted exclusive to me - those would be available on a reservation basis for a certain number of hours a month. Most virtual offices are oriented towards small businesses (and this also avoids some of the hassle of trying to take a home office deduction for tax purposes).

One can imagine a virtual office oriented towards students instead. More of more neighborhood library branches now have study rooms and community rooms where people might otherwise have gathered in a living room or large home office, that receive heavy use. University libraries have long had study carrels, but as studying and research become divorced from physical books, it wouldn't be too surprising to see a place that offered study carrel rentals by the semester together with a few hours a month of group study rooms time minus the library in the future. The neighborhood study rooms could have tutors on staff to help answer questions, actively encourage the formation of homework groups and writer's critique groups, have small stores that sold school supplies and snacks, and offered Internet access and affordable subscriptions to academic journal databases or virtual libraries. These kind of spaces might be particularly attractive to students in online high school or college programs, and to non-traditional students who need to get away from a chaos of a home full of children and all sorts of household activities and attention demands. Perhaps these kinds of centers could be natural outgrowths of branch college campuses, community colleges, or franchised tutoring businesses.

Entertaining

The outsourcing of the guest room and entertaining areas has probably not yet run its course.

Once upon a time, birthday party's at home were very common; now there is a whole industry built on creating usually indoor "play spaces" for children's parties complete with separate rooms for eating cake and opening presents on one hand, and racing around having fun on the other.

Coffee shops and bars aren't just places where you buy coffee and beer, they are to a great extent outsourced parlors and living rooms.

Many restaurants offer private rooms for meal gatherings.

While there have been hotels where out of town guests can be housed, and where one can rent rooms for events, this really hasn't penetrated the "house outsourcing" market yet. When I was in law school, a lived for a year in the law school dormitories called the "law club." This had, in addition to a sharing dining area, a mail room, and a shared recreation area, a suite of guest rooms where visiting friends and family could stay. This would be a natural addition to a subdivision of not so big houses, alleviating the anxiety of people who feel the need to own a house based on their peak need, rather than their usual need. For example, a senior citizen's development might be much more attractive if residents knew there were places in the complex where their children and grandchildren could stay on holiday visits. In existing neighborhoods, converting an existing property into a guest house or bed and breakfast for out of town family and household guests might offer more intimacy and walkable access to your host's home than sending guests off to a Holiday Inn or Motel 6, and thus be a more socially acceptable option for space constrained families. In fact, a number of new high rise developments combine condominiums and hotel rooms in the same building.

There is also a small but growing niche of places where one can entertain guests and hold parties that are separate from full fledged hotels oriented towards business conferences and large weddings where many guests are staying overnight, particularly as fewer people have natural and easy access to church halls, civic club halls and country clubs. Some condo complexes and apartment buildings in Denver have them. Since one of the factors that often drive people to purchase large houses is the desire to be able to hold large parties a few times a year, the availability of respectable entertaining venues, perhaps as part of a homeowner's association, perhaps as part of a "virtual office" or "time share" style subscription service, or perhaps through simple rentals, might make it more palatable for people who want to hold occasional big parties to live in smaller houses.

A Japanese style innovation that we might see is some variation on the rented karaoke room. While many American cities have karakoke bars where you can belt out your favorite tune in front of a large room full of strangers, fewer have private rooms where you and a half dozen of your friends can do that in greater privacy. And, similar sized entertainment rooms, outfitted a deluxe home theaters or multi-player deluxe videogaming rooms (with media rentals included and concession service available), for example, might also be hits.

The Yard, Workshop and Garden

Next to my children's school is a community garden where people with little or no lawn of their own can grow vegetables or flowers in a little plot down the road.

The "patio home" concept where single family homes share a communal front yard tended by a homeowner's association is also increasingly common. Some resort communities have private parks and beaches to provide residents with the benefits of a place to throw the kind of parties that one would ordinarily throw in your back yard in a single family house with a beach without the expense and waste of having one for every property when most go unused most of the time. The concept of urban residential neighborhoods like my own Washington Park is that each homeowner has a tiny lot, but in exchange the neighborhood has a premier park that everyone shares.

Rather than having a home gym, people join neighborhood health clubs or go to neighborhood recreation centers (incidentally, some even have showers that you can use when you have plumbing problems). Many homeowner's associations and condominium complexes have small community pools and exercise rooms.

What about the dog house? Lots of people in urban areas live in places that don't permit pets, but have or want pets. There are kennels, of course, but those are expensive and a lot of the cost goes into staff to provide care for the pets while their owners are absent. What if there were a kennel-like structure with a nice dog park within a short walk from a no-dogs apartment complex? Dog lovers could keep their dog there, talk their dog on daily walks, feed their dog themselves, and perhaps the structure would even have little rooms a bit like library study rooms where you could relax, watch TV, read a book, or have a coffee in the company of your dog, before or after work. It wouldn't be the same as having your dog in your own home, but it would be the next best thing. Similar arrangements already exist for people who live in the city but want to have horses.

The Sick Rooms

It isn't uncommon for someone who lives in a house without a ground floor bedroom or bathroom to experience a short term injury or illness that limits their ability to move around the house. Perhaps a broken leg, perhaps simply being very weak for a while.

Sometimes, a stay at home parent needs to recover from surgery or being sick or is pregnant and on bedrest, and doesn't need any special caretakers or hospital equipment, but does need to be genuinely relieved from the temptation to do any household chores or childcare while resting and recovering.

Sometimes, someone learns that they have an infectious disease, TB for example, and needs to stay away from a vulnerable elderly person or infant or other person with a weak immune system. Perhaps a child visiting frail grandparents comes down with the measles on Christmas vacation.

These conditions may all be ones where family members and friends and perhaps daily or less frequent nurse visits are all that one needs as caretakers, but staying at home is not a great option, and a hospital stay would be absurdly expensive for such a minor condition. It would be a shorter term alternative to an assisted living facilty or senior housing complex.

There are motels near most hospitals with a multistate draw (e.g. Mayo Clinic and National Jewish) that cater to this medically needy customers, but few closer to home that market themselves and are designed to meet this need niche.

This might be a niche for short term recovery room suites, a bit likely weekly motels but with the immobile and ill who need rooms that are accessable and antisceptic on short notice in mind. There might be room service available and a referral service for "home nursing" services.

Of course, hospices and nursing homes have already been brought into use for high intensity need cases.

Sharing Toys and Tools

The idea of outsourcing things that you need infrequently to avoid having to buy things based on "peak use" has applications in households beyond the house as well. Lots of people buy boats, ATVs, RVs, motorcycles, pickup trucks, cars with more seating capacity than most families usually need, specialty tools, snowmobiles, and the like that they may only use a few days or weeks a year. But, those things take space to store, often need to be maintained every year even if you don't use them much, and spend a lot of time sitting idle. Rental options exist, but they can be pricey because they are extracting large profit margins from people who don't regularly use those items, are in a place where their plans demand that they have them, and have only a choice between buying or renting. Rental operations also have a fairly high risk that the items will be stolen or damaged, because the renters are engaged in one time transactions and have no emotional stake in taking care of the equipment.

But, what if you were part of a "recreational toys and household tools co-op" that provided members with use of these items at cost (be offering annual rebates if there were any profits, in proportion to patronage), had a substantial deposit and credit check up front to make individual transactions for members go more quickly, trusted members a little more so that they would need less paid employee or volunteer services, and turned the relationship between the firm renting the stuff and the person renting it into a longer term, more warm and fuzzy one (what they call in the literature the "warm glow"). What if the co-op had multiple locations and you could get what you needed at one location and drop it off at another?

Denver's bike rental program is an example of the concept in practice.

Limits To The Trend

We haven't, and probably never will, go as far as some societies in this direction.

For example, public baths, while common in some parts of the world and developed at a time when many homes lacked them, are unlikely to make a comeback. The public Laundromat while still in existence is also fading away with increasing affluence and the appearance of affordable laundry machines that both wash and dry clothes further reduces the space constraints involved.

Sex hotels and capsule hotels also seem unlikely to come to a place near you anytime soon. But, the house outsourcing trend surely isn't entirely played out either.

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Employment Trends

Colorado wages fell in 2009. Mining (-18.8%), construction (-16.4%), real estate (-8.5%) and wholesale trade (-8.5) had wages that were hit hardest; farming (+15.1%), military pay (+14.2%), hospitals (+8.0%) and the fishing/forestry industry (+6.8%) boomed. Private sector compensation fell 4.5% in 2009 in Colorado, while government compensation rose 5.4% mostly due to rising military pay. Pay per job actually rose an average of 1.8% in 2009, but overall wages in the state fell because the number of jobs well.

Unemployment in November increased from 8.2% in October to 8.7% in the Denver-Aurora-Broomfield metro area, from 6.3% in 6.8% in the Boulder metro area, and from 9.3% to 10.3% in the Pueblo metro area according to the Labor Department.

Despite the gloomy news, the net migration to Colorado as shown by moves in v. moves out of Allied Van Lines showed Colorado second only to Texas.

The national news leaves a little more room for optimism, but only a little:

[N]onfarm private employment grew . . . in December, at a pace well above what is usually associated with a declining unemployment rate. . . . September’s employment gain of 29,000, October’s gain of 79,000, November’s gain of 92,000 and December’s gain of 297,000 [show a positive trend]. Strength was also evident within all major industries and every size business tracked in the ADP Report. . . Construction employment was unchanged in December, ending continuous monthly declines since June 2007. The decline in Construction employment, since its peak in January 2007, is 2,306,000.

From here and here both quoting consultancy ADP.

Note that, due to population growth, it takes about 125,000 new jobs a month to keep the unemployment rate constant.

The public sector took its job hit in September 2010. "A net total of 159,000 government jobs were lost in September. Local governments cut 76,000 jobs . . . most of them teachers. That's the largest cut by local governments in 28 years. About 77,000 temporary federal census jobs ended and state governments shed 7,000 jobs."

The move to trim public sector workforces in the face of weak state and local tax revenues and Republican claims that there are too many public employees who make too much money could easily confound all the job gains being made in the private sector.

Updated: 1-6-2011

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Corrupt Denver Parking Enforcers Fired

Denver's municipal government fired parking enforcement officers Eric Madril and John Culhane on December 9, 2010. They faked a ticket to retaliate against someone who had been reduce to one of them when given a first ticket and were caught in parking court. Denver's Public Works Department initially gave them trivial punishments, but when the news got out via 9News and the Denver Post, Denver's District attorney charged each of them with felonies and we now learn that they were fired a few days after they were charged with the felonies.

The initial decision to go easy on them was a serious lapse of judgment by municipal supervisors in the case, continuing a long history of overly lax treatment of law enforcement officials who engage in misconduct in the City, but public outrage and a nudge from the District Attorneys' office (which doesn't have the same intimate need for cooperation from parking enforcement officers that it does from the police in the city) ultimately caused the city to do the right thing.

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Denver Bike Program Ends First Season

Denver launched its B-Cycle program, a system of bike rentals kiosks, this year, in cooperation with the non-profit Denver Bike Sharing, and its first season is now over as it shuts down until March.

This season it had 500 bikes and about 50 kiosks, mostly in the vicinity of downtown Denver, Cherry Creek and the University of Denver, with some points in between. "In the seven months since it launched April 22, Denver B-cycle hit nearly 103,000 rides, selling 1,784 annual memberships and more than 32,900 short-term memberships." Short term memberships were $5 to $30 depending on length, annual memberships were $65. Rental rates, in addition to the membership costs, ranged from free to $8.80 per hour, depending on the length of use (longer rentals cost more). Next season's plans include a simpler fee structure, adjustment of kiosk locations to reflect the demand levels in different locations, and improvements to the touch screen interface of the kiosks.

Notably, no Denver taxes go towards the programs, although Denver does maintain at taxpayer expense, a bike path system in the city and has made city property available for kiosks to be set up upon. The program is funded with user fees (my back of napkin math suggests that those fees are more than $300,000, perhaps quite a bit more), donations and a $210,000 grant.

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