Our Dumb Future

In the film Idiocracy, the main character, an average Joe played by Luke Wilson, awakens in the distant future to discover that he is by far the smartest person on the planet. During an IQ test, he is asked:

If you have one bucket that holds two gallons and another bucket that holds five gallons, how many buckets do you have?

It’s a satire of a very dumb future, but I was reminded of this scene when I saw the survey questions the Federal Reserve Board of Atlanta recently asked of subprime borrowers.

The authors wanted to explore the relationship between financial illiteracy and foreclosures. Not surprisingly, those who couldn’t answer such basic questions had a much higher rate of foreclosure. The results held up when controlled for cognitive ability, ethnicity, and other variables.

See for yourself:

The Fed’s Financial Literacy Quiz

[QUIZZIN 1]

Golden State of Default

Data from CMA Sovereign Risk Monitor

* CPD – Cumulative Probability of Default over the life of a 5-year credit default swap contract. In other words, the market is estimating California’s chance of default in the next five years as one of five.

HT: Marginal Revolution

Bersin: I shouldn't have lawyered it

Now it’s clear why even the Democratic controlled U.S. Senate had problems with the nomination of Alan Bersin, President Obama’s commissioner of Customs and Border Protection:

They caught him in a lie and he wriggled a fish to get out of it.

Bersin failed to file paperwork for household employees. That alone is excusable. It’s the rare American who fills out an I-9 form for every babysitter, nanny, gardener, or maid who works for them.

What’s inexcusable is that Bersin said that he didn’t know he was required to do so.

Preposterous. Bersin is a Harvard-educated Rhodes scholar as well as a former U.S. Attorney in San Diego and his wife under Clinton. Immigration was his signature issue: he served as “border czar” in two administrations.

If that wasn’t enough his wife, Lisa Foster, is a California judge.

Bersin employed 10 household employees since 1993 — the year he became U.S. attorney in San Diego —  and didn’t fill out I-9 forms for any of them. A Senate memo wryly notes that Bersin “knew of the existence of the Form I-9” as it “came up” in his tenure as U.S. attorney.

Bersin tried to explain his screwup with Clintonian hair-splitting over the difference between employers and independent contractors.

The Senate Finance Committee, which received Bersin’s nomination in September, was clearly troubled by his explanation, or lack thereof.  It seems that it dawned on Bersin that his nomination was in jeopardy in January when he began feverishly filling out his missing paperwork.

On March 19, Bersin and his wife, Judge Foster, met with committee staff. This meeting was described as a “due diligence” meeting, but “come to Jesus meeting” is more apt.

With much hand-wringing and kow-towing, Bersin apologized and fessed up.

Asked whether his legal hair-splitting was a rationalization for his failure to file the proper paperwork, Bersin responded “That could be.” He also said that he “should not have lawyered it.”

A week later, Obama used his executive power to install Bersin in office.

The president made it seem like Republicans were stalling his nominations to score political points.

In the case of Bersin, however, the Senate was merely doing its job.

Google Slayers

I have a new story out in the May issue of The American Lawyer about Cadwalader, Wickersham & Taft, the law firm that wants to bring Google back down to size.

Click here to read it (.pdf)

There have been a few developments in the case since the story went to press:

Late last month, the Ohio Attorney General has intervened in the case, asking Judge John P. Bessey to deny Google’s motion to dismiss the antitrust case filed by Cadwalader on behalf of MyTriggers.com.

AG Richard Cordray takes exception to Google’s argument that Ohio law doesn’t apply to Google’s conduct. And Cordray also finds fault wiht the Internet search giant argument that the state’s Valentine Antitrust Act doesn’t outlaw monopolies that act unilaterally to crush competition.