In light of the decision taken last week in Brussels to impose a 50% (nominal) haircut on that portion of the Greek debt stock still left in the hands of private creditors, the post below, from April 2010, makes for interesting reading.
April 26, 2010
The Greek Bailout: War Versus Dishonor
As I noted in my last post on this topic, this week will be an important one for the European monetary union. So I asked the Lounge’s informal counsel of sovereign debt experts for their views on what sorts of questions we should be asking now that Greece has asked for aid, and the market still appears unappeased. Mitu Gulati (Duke) started us off by asking some pointed questions about the terms of the Greek bond contracts, arguing that, when times are good no one cares about the contracts. But, he says, things look bad enough now that these issues should matter to debtholders (and to Greece). Below, Lee C. Buchheit, a partner based in the New York office of Cleary Gottlieb Steen & Hamilton LLP, joins the fray:
At this point, it is worth asking how the "no debt restructuring" scenario is supposed to play out.
Is the theory that Greece will draw down on the EU/IMF bailout money to cover maturing debt obligations and budget deficits while the fiscal adjustment takes hold and, at some point in the not-too-distant future, the markets will be prepared to resume lending at moderate coupons?
If so, a couple of observations:
The bailout fund will need to be larger than EUR 45 billion. Once the country starts suckling on the bailout fund, it may be some time before it can be weaned.
The market's nostrils are visibly flaring with the whiff of debt restructuring on the air. They will not, I suspect, be easily or quickly persuaded that the crisis has passed.
The worst case scenario here is one in which the bailout money is exhausted in an effort to "brass it out" (as the English say), only to find that a debt restructuring cannot in the end be avoided. Why? Because those resources might have been used in some creative way to facilitate the debt restructuring (remember Brady Bonds?), or at the very least to backstop the local deposit insurance scheme or recapitalize local banks that are adversely affected by the restructuring. A sovereign debt restructuring with no fresh money behind it is both a harder and an uglier thing to complete.
This then is the dilemma of the moment. Should the bailout money be spent paying maturing debt obligations in full and on time until it is exhausted, or should it be husbanded and used to support a debt restructuring of some kind?
One is reminded of Winston Churchill's verdict on Neville Chamberlin's policies in 1939:
"You were given the choice between war and dishonor. You chose dishonor and now you will have war".
The ABA Journal reports here on a study that suggests that "bad apples—such as slackers, pessimists, and angry or nasty people—can have a bigger impact at work than top performers."
Negative workers can reduce enthusiasm and change the mood, according to research (PDF) by Will Felps, Terence Mitchell and Eliza Byington. In one experiment, Felps found that just one slacker or jerk in a group can bring down performance by 30 percent to 40 percent.
To be sure, a law school is not a typical employer and law faculty members (especially ones with tenure) aren't typical employees. So I wonder how the ratio of jerks/slackers to pleasant, productive faculty members might factor in the law school context.
If there are a number of faculty members who don't do their share of committee work, for example, faculty members who do lots of committee work will resent those who do not. That resentment might lead "productive" faculty members to become "slackers" with respect to committee work.
On the scholarship front, faculty members who are produtive will resent unproductive faculty members who receive the same raises and recognition. That being said, lack of scholarly output by some faculty members probably will not cause "productive" faculty members to stop publishing.
As for a school's overall faculty culture, it only takes one jerk to bring down entire the tone of faculty debate.
As I mentioned in my post on callbacks, one way to increase your ability to land a job as a law professorship is to work as a Visiting Assistant Professor (VAP) or to obtain a fellowship aimed at those who wish to transition into the academy. A number of institutions now have such programs (including my law school, Arizona State). Paul Caron (aka TaxProf) does a great job collecting the programs here.
While I have occasionally seen criticism of these programs --- not that the programs themselves aren't helpful, but that it is a big burden on aspiring law professors to take a short term job in a different city often for less pay --- as someone who benefitted greatly from the Climenko Fellowship at Harvard, I think these concerns have been overstated. Accepting a job as a law professor will almost always require a move to a different city and a loss of pay, so I guess I don't see why it is unreasonable to impose that burden for a VAP or fellowship if it is a burden that most candidates will ultimately have to bear . . .
When I heard Steve Inskeep interview Politico's Jonathan Martin on NPR's Morning Edition this morning I couldn't help but think that journalists would be in a hell of a fix if they had to provide due process to the subjects of their investigative inquiries. Steve Inskeep asks Martin, "What exactly did Herman Cain allegedly do?" Martin says he can't reveal "too much that would imperil these women, but it was behavior that made them feel uncomfortable; it was sexually suggestive behavior." You can hear the interview here; the exchange starts at the 1:37 mark. The Politico story is here. The Politico story provides a bit more detail -- "conversations allegedly filled with innuendo or personal questions of a sexually suggestive nature" as well as "physical gestures that were not overtly sexual but that made women who experienced or witnessed them uncomfortable and that they regarded as improper in a professional relationship." Notice of the charges? You did and said things that were perceived as sexually suggestive and made people uncomfortable. Opportunity to respond? Cain was asked whether he had ever been accused of sexual harassment, which is a bit like asking when he stopped beating his wife. A bit; not the same thing, of course. Maybe Herman Cain is a sexual harasser; maybe he's not, but in a courtroom he would be entitled to more specificity. Not in journalism.
Update: Here is Eugene Volokh's commentary on the New York Times take on this -- an original headline that Cain "concedes and dismisses" the charges, which Eugene thinks is a curious coupling of terms, and I suspect was a deliberate choice to make Cain look bad. At any rate the New York Times has changed its headline -- it's now "Cain Calls Harassment Issue a Witch Hunt." Appropriate for Halloween.
The terms we discuss in Lawtalk come from sources ancient (eye for an eye) and modern (CSI effect), Shakespeare (pound of flesh) and Dr. Seuss (wet foot, dry foot). Today, thinking about the Occupy Wall Street movement, I want to highlight one that was popularized by a law professor: pierce the corporate veil.
Piercing and veils have had metaphoric significance for centuries, and corporations and veils appeared together from the earliest days of the US legal system. Some of the old uses have a contemporary feel. In 1840, for example, the governor of Michigan urged the legislature to protect the public from banks that issued worthless paper money: "Take from them . . . the corporate veil, which now encourages, and at the same time, conceals and protects their frauds and villainies."
We don't know who brought piercing, veils, and corporations together for the first time, but we do know who made it a popular phrase. In 1912, Fordham law professor I. Maurice Wormser wrote a landmark law review article: "Piercing the Veil of Corporate Entity." It was jam packed with metaphors, many based on the idea of the corporation as a person and the corporate form as its clothing: garments of Little Red Riding Hood's grandmother, veils, cloaks, disguises, robes, and armor-plate. In addition to being pierced, Wormser's veil is drawn aside, torn aside, penetrated, shaken aside, brushed aside, stripped off, and lifted. The mind boggles at what the dominant phrase might have become. But the most popular turned out to be the one in the title, and after Wormser republished his article in a book fifteen years later, courts began to talk with some regularity of "piercing the corporate veil."
In 1931, Wormser published a follow-up book: Frankenstein, Inc., which vividly portrays various abuses of the corporate device. One prominent reviewer (Columbia University Finance professor James Bonbright) hoped that Wormser's account would weaken the influence on the legislature of New York law firms and their powerful clients. More to the point for readers of this blog, Bonbright pointed to law school faculties and their role in the unraveling of the economy: "The very leaders of the legal profession who have been most influential in inducing legislators to pander to the demands of their predatory promoter clients are among the most brilliant examples of the output of the law schools of Columbia, Yale, Harvard, Pennsylvania, and Cornell. . . . [Instead], the leading law schools of the country must assume a responsibility that they have hitherto neglected in the education of lawyers for decent citizenship."
This time around, business schools are taking some of the blame for the economic meltdown. Finance professionals make up about 14% of Occupy Wall Street's 1%, with business executives and managers outside of the finance area adding another 31%. Can law schools, whose graduates blessed exotic financial instruments and who now litigate both sides of the fallout, be far behind?
Here's a little trivia question on effective writing.
Who wrote the following and should we take it is good advice for ourselves and our students...
"One of the really bad things you can do to your writing is to dress up the vocabulary, looking for long words because you're maybe a little bit ashamed of your short ones. This is like dressing up a household pet in evening clothes. The pet is embarrassed and the person who committed this act of premeditated cuteness should be even more embarrassed. Make yourself a solemn promise right now that you'll never use 'emolument' when you mean 'tip'..."
The New York Times recently published an Op-Ed piece from a fellow at the Brookings Institution extolling the various social miracles that would transpire if we eliminated legal education and bar licensing as a condition to the practice of law. You can see it here (“Are Law Schools and Bar Exams Necessary?”). Three Letters to the Editor commenting on the Op-Ed are reproduced here. Each takes a distinct point of view that is as polemic as the original Op-Ed. Together they comprise a very good and admirably succinct background to a debate on whether law licensure is necessary, what its costs and benefits are, and how well our existing system takes those costs and benefits into account and appropriately balances any tradeoffs. Those among us who teach Professional Responsibility may find this a valuable resource to ground class discussion on the subject.
While in my own view there is a great deal more, and a great deal less, to each contributor's position than their statements suggest, I offer only one comment on these materials here. Conspicuously missing from any of the position pieces (except obliquely in the first Letter to the Editor) is any assessment of the significance of what is in my view the single most salient factor influencing this debate--the fact that it is extremely difficult for nonexperts to determine with any accuracy the quality, efficiency or even need for most of the professional services lawyers provide. Put slightly differently, the eventual result of and the buyer's satisfaction with professional services are exceptionally noisy quality signals. It is little short of astonishing that the "economist" from Brookings who gave us the original Op-Ed should have assumed this issue away, and instead assumed that crowd-sourced lay assessments would adequately inform the market and police for quality and competence.
Law is hardly unique in this regard, of course. Medicine is another obvious example of professional services whose quality and need are very difficult for lay buyers to judge in most instances, both before and after the services are provided. And this phenomenon is a matter of degree for any service involving skill and expertise--think of the extent to which most of us are forced to rely on the judgment of our auto mechanics, plumbers and electricians.
Which is not to suggest that our current requirements for law licensure, or our policing of licensees, are currently optimal in any particular respect. But the world rarely makes any issue of importance as simple as we all might wish.
The NALP recently made available its Buying Power Index for Class of 2010. The Buying Power Index (BPI) is a great resource for law-school graduates, but it's also a great resource for faculty candidates. To calculate the BPI for a city, the NALP takes the median reported starting salary for that city, and divides it by the salary required to get the standard of living as you would have with a salary of $160,000 in New York City. For example in Houston, a salary of $68,100 is the equivalent of $160,000 in New York City. That means that the cost-of-living in Houston is 43% (68,100/160,000) of New York City's.
Suppose that you have offers from schools in two different cities, Austin and Minneapolis. To determine the relative cost-of-living, take the NYC $160,000 equivalents--$70,600 (Austin) and $82,000 (Minneapolis). The cost-of-living in Austin is 86% (70,600/62,000) of that in Minneapolis. Of course, other factors might be relevant. For example, I don't know whether the cost-of-living index used by NALP adjusted for differences in tax rates. And, as Elie Mystal (Above the Law) pointed out, cost-of-living does not include the intangibles of living in one city or another. In the Austin/Minneapolis example, one person might treasure Austin's music scene, while another might want to watch Garrison Keilor live (though you have to cross the river into St. Paul to do that).
And there are the intangibles of the law schools: ranking; course fit; collegiality of the faculty; and such.
Speaking of which, I need to go chat with a faculty candidate.
Update: In the comments, James suggested that student loans are relevant, even for fculty candidates. In Reported Salaries by Law School, I noted a story in National Jurist that compared law school starting salaries, after adjusting for cost-of-living and student debt.
CUNY School of Law is currently conducting searches for several faculty positions. These include two (2) tenure-track faculty positions; an Associate Dean for Clinical Programs (the faculty member who heads CUNY's law clinic); and an Instructor in the International Women's Human Rights Clinic
Position descriptions and direct access to the City University of New York's position application system are here.
This summer CUNY Law is relocating to a new building close to the heart of New York's public interest legal community. More on the location here.
Paul Caron runs all the numbers to determine which blogs get the most traffic. The Faculty Lounge continues its upward trend, garnering a 34% increase in the number of visitors this year as compared to the prior year. By the way, we're about to hit 3 million page views in the next couple of weeks. It's time to get a new coffeemaker in the Lounge!
The University of Cincinnati College of Law invites applications for the Director of its Domestic Violence and Civil Protection Order Clinic, part of our new Center for Race, Gender and Social Justice. The position is a twelve-month, long-term contract position, with renewals for additional terms available.
Since 2005, students in the Clinic have represented over 500 victims of domestic violence, stalking, sexual assault, and human trafficking in civil protection order hearings. The Clinic provides students training on practicing law and the art of trial advocacy in the context of domestic violence. Taken in the third year, the semester-long program includes extensive training and gives students hands-on experience counseling and representing clients from the community. Students practice in the Hamilton County Domestic Relations Court and the Court of Common Pleas.
Qualifications: Candidates must have a distinguished academic record, including a J.D. from an accredited law school, and must be licensed to practice law in Ohio (or have the ability to become promptly licensed). Experience in public interest representation, including significant litigation experience, experience involving domestic violence and family law, and/or clinical teaching or supervisory experience is preferred. A successful applicant should have excellent lawyering, communication (oral and written), and interpersonal skills.
Salary: Competitive and commensurate with experience.
Starting Date: August 1, 2012.
Apply at www.jobsatuc.com. for position #211UC1888. Attach a resume, cover letter, and contact information for three references.
For more information, contact: Professor Tim Armstrong, Chair, Non-tenure Track Faculty Committee, University of Cincinnati College of Law, PO Box 210040. Cincinnati, OH 45221-0040.
Application Deadline: Applications will be accepted until the position is filled. Review of applications will begin on November 1, 2011.
The University of Cincinnati is an Equal Opportunity Affirmative Action employer. Applications are especially encouraged from women, persons of color, and others whose background and experience would contribute to the diversity of our faculty.
Professor Nancy Dowd at the University of Florida is one of the most important scholars doing work in the field that has come to be called law and masculinities.
I am very pleased to announce that other scholars who work in law and masculinities have convened a workshop at the University of Florida in honor of Nancy’s recently published book, The Man Question.
Professor Martha Fineman at Emory will provide that keynote address and confirmed speakers include Professors Frank Rudy Cooper, John Kang, Ann McGinley, and Valorie Vojdik.
The event is free and all are invited. Those interested may email me at johnmkang@gmail or Professor Rachel Rebouché. The formal announcement follows.
Asking “The Man Question:” A Workshop on Contemporary Masculinities
University of Florida Levin College of Law
Third Floor, Holland Hall, Room 345
Friday, November 18, 2011, 10:00 a.m.
This workshop brings together leading gender and masculinities scholars to discuss the issues raised by Professor Nancy Dowd in The Man Question. Speakers will explore questions of masculinity across diverse areas of employment discrimination, criminal law, international law, and constitutional law. In addition, participants will grapple with theoretical questions of history, identity, vulnerability, and the limitations of equality rights.
Most of us are able to keep abreast of our fields, but it is increasingly hard to know what we should be reading in related areas. It is nearly impossible to situate oneself in other fields that may be of interest but cannot be the major focus of our attention.
A small number of major law journals once served as the gatekeepers of legitimacy and, in so doing, signaled what was important * * * * Great articles [now] appear in relatively obscure places. (And odd things sometimes find their way into major journals.) Plus, legal publishing has been both fragmented and democratized: specialty journals, faculty peer reviewed journals, interdisciplinary journals, all now play important roles in the intellectual ecology. * * * *
Jotwell will help fill that gap. We will not be afraid to be laudatory, nor will we give points for scoring them. Rather, we will challenge ourselves and our colleagues to share their wisdom and be generous with their praise. We will be positive without apology.
Time flies when you're having fun! And what could be more fun than posting the annual list of dean searches? As always, I encourage folks to contact me with updates - ideally via my email, email@example.com.
Two journals—the West Virginia Law Review and the Harvard Journal of Law & Public Policy—have recently returned their first round edits to me. Both journals did a splendid job on all fronts and, I find myself indebted to, and humbled by, some highly talented and dedicated student editors.
Still, I want to harp on one issue. Both journals, like the other journals where I have published, have asked me to refrain from contractions: write “do not,” not “don’t,” and say “cannot,” not “can’t.” I know that their suggestions, earnest and sensible, are motivated by an utterly sane desire to present a finished product that appears more mature, more professional.
Yet, I tend to doubt that contractions in fact undermine their author’s credibility and seriousness.
I know that few us can write as well as this guy (how I would be gratified simply to acquire the sobriquet of The Poor Man’s Don Herzog. . . .), but doesn’t the great—nay, the one and only—Don Herzog demonstrate in grand style that amazing ideas needn’t be leaded with the patina of formalistic prose?
Can’t we make the case that the idiom of legal scholarship is already too damn stiff and formal, and, let’s be honest, often too dreary to slog through, after a long day of teaching and committee meetings and packed office hours and a nerve wracking drive on I-75 back to the suburbs of Weston at 8 pm from Miami Gardens? Can’t we have a good dollop of humor, sarcasm, and mischief—and all of it seasoned with contractions—which can help the writing, and their attendant insights, go down easier?
Anyone interested in my modest call for reform? Won't cha consider it?
And any college/university that participates in federal student-aid programs must provide on its website a net-price calculator no later than this Saturday, October 29, 2011. Additional reading here and here.
(Astute readers will notice I'm including this post under the "fear" category.)
We all know that language can be manipulated for political purposes. Recent history gave us a stunning example, as the politically unassailable "estate tax" (levied only on the richest .25% of Americans in 2009) became the reviled "death tax." But linguistic advocacy in the service of law or legal change is certainly not new.
Ken Burns's three-part documentary on Prohibition on PBS earlier this month touched on a lovely example: the contest that led to the coining of the word scofflaw to refer to those who flouted the limits on liquor sales. Burns's researchers got the heart of the story right but many of the details wrong, and a look at original sources reveals a more complex and interesting history. The contest was sponsored by a wealthy reform activist named Delcevare King. As he explained to a student newspaper, "I believe the whole atmosphere about prohibition can be changed--that lawless drinking can be made 'bad form'--just by getting into general use a word describing the present day drinker that will bite as does the word 'scab.'" And he offered $100 in gold for the best entry. Although scofflaw won, other worthy entries included boozesheviks, lawjacker, and patrinot.
Not to be outdone, anti-Prohibition forces sponsored contests of their own, including one seeking a word for those who "scoff at the God-given privileges of liberty and the pursuit of happiness." Entries included terms like killright, meddlebug, and pokenose, but the winner of the contest organized by the Harvard Advocate (submitted by a 67-year-old woman) was the wonderful spigot-bigot.
Scofflaw was initially ridiculed, then gained acceptance, then repeatedly died out and was resurrected in the years after Prohibition. The fuller story of King, his contest, and the fate of scofflaw (told and documented and even illustrated with a contemporaneous comic strip in Lawtalk), is too involved to summarize in a blog entry. But here's one way that lawyers figure into what Burns has dubbed "a nation of scofflaws." On the very day the winning word was announced, the ABA stood by its controversial choice of a British rather than an American ocean liner to transport some thousand American lawyers to meet with their British counterparts. The Association "denied that the question of liquor aboard ship had influenced the decision," prompting a Washington Post columnist to remark:
The American Bar Association . . . won't even inquire whether there's a bar on board until after the 3-mile limit has been passed, but if there shouldn't be it is surmised that the chairman of the entertainment committee will need a whale for a ferry boat.