27 May 2020

It's Back! The Municipal Bankruptcy Bug Has Bitten

The sales tax is one of the most important sources of revenue for American municipalities. So what happens when the floor falls from under retail sales due to Covid-19? First, there's the Coronavirus Aid, Relief, and Economic Security (CARES Act). Congress appropriated $150 billion for State, local, and tribal governments to cover necessary expenditures due to the ongoing public health emergency. Sounds like more than a good start but, strange as it may seem, almost none of this appropriation has found its way to local municipalities.

There are several reasons for this state of affairs. First, only a municipality with more than 500,000 residents may receive any direct funding under the CARES Act. A number of US States have no municipalities with a half-million residents. Alabama and both Dakotas come to mind. Even so, each State can get funds for the same purposes and then remit funds to their municipalities. But some States that have received money, say, West Virginia, haven't spent a cent. One wouldn't go broke underestimating the level of dysfunction in State governments generally.

Well, if federal money isn't finding its way to them, what can cash-strapped municipalities do? Why, file a Chapter 9 municipal bankruptcy, that's what. And first to take the plunge is Fairfield, Alabama. Quoting from the Bloomberg Law article of May 20
The city of Fairfield's filing Tuesday ... listed assets and liabilities between $1 and $10 million. A resolution signed by Mayor Eddie J. Penny included with the filing said Fairfield has "exhausted its options" after years of financial stress. It was unclear whether the shutdowns intended to mitigate the spread of the coronavirus in the U.S. worsened the city's problems.
Fairfield's problem predate Covid-19 but it seems clear that more municipal bankruptcies are on the horizon.

26 May 2020

Transplanting the Law of Secured Transactions

For many years I regularly taught Secured Transactions, a course devoted to Article 9 of America's Uniform Commercial Code. And it looks like this Fall I'll be drilling down again on attachment, perfection, priority, and rights on default.

There's little question that Article 9, adopted in all fifty of the United States, has been an incredible success. Success in what, you ask? Success in permitting creditors to lend and borrowers to borrow on the security of virtually all forms of personal property. Secured lending reduces lender risk and, hence, the argument goes, borrower cost. Of course, reducing lender risk does reduce risk as such, it simply shifts the risk of borrower nonpayment from the secured lender to the borrower's unsecured creditors.

(The efficient market hypothesis claims this doesn't matter because unsecured creditors can adjust their prices to take account of the greater share of risk they bear. I discussed the implausibility of this claim with respect to certain unsecured creditors--wage earners-- a number of years ago in The Missing Piece of the Puzzle: Perspectives on the Wage Priority in Bankruptcy (download here or here).)

When it comes to discussing the transplantation of America's efficient system of secured transactions to other nations, Professor Charles Mooney utilizes the work of scholar of comparative law, Alan Watson. In Lost in Transplantation: Modern Principles of Secured Transactions Law as Legal Transplants (download here) Mooney first identifies UCC Article 9 and the UNCITRAL Model Law on Secured Transaction as exemplars of "Modern Principles",and then considers how, when, and under what circumstances they have been transplanted. Cribbing from his abstract:
[Considering] the role of legal elites and legal culture, governmental and regulatory influences, opposition of entrenched interests, the role of insolvency law and proceedings, registration in public registries, descriptions of collateral in the context of registration and creation of security interests, and the market for business credit. In particular, it addresses various impediments to the adoption .... Finally, the chapter explains that the Modern Principles offer potential benefits beyond the more obvious goals of expanding access to credit and lowering the cost of credit. They harbor potential for coherence, certainty, and ease of application and use — considerations that generally have been overlooked or underappreciated.

Mooney does not take up the question of whether adoption of the Modern Principles raises systemic distributive concerns. Nonetheless, Lost in Transplantation does a fine job of looking at the work of expanding the neo-liberal economic order through the lens of comparative law.

05 May 2020

The Market, Progressivism and the Hebrew Republic

While I haven't the time to read it closely, Joshua Cutler's A Hebrew Republic in the Gilded Age? Henry George's Single Tax and the Hebrew Bible (download here) recalled to mind what I wrote here, here, and here about the history of capitalisms in the United States. Cribbing Cutler's abstract:
Henry George sparked a vast popular movement following the publication of his classic work Progress and Poverty. Seeking to explain why poverty always seemed to increase along with progress, George proposed that, as societies advanced, land owners were able to capture an increasing share of wealth. To remedy this, George proposed a “Single Tax” on the unimproved value of land, which would prevent land speculation and hoarding and make land available for all who desired to work it. While George was ostensibly an economist, he is best understood as an ethical-religious figure, and his most devoted followers were a diverse array of religious leaders and reformers. However, the actual religious substance of George’s ideas has been largely unexplored. I propose that George’s program was inspired by Jewish ideas and institutions originating from the Hebrew Bible. In Hebraic thought, by virtue of creating the earth, God is the only rightful owner of land. This principle was embodied in the Hebrew Bible’s land laws that ordained an equal distribution of land along with institutions to maintain this distribution over time. Centuries before George, I discuss how medieval Jewish rabbis had already derived a taxing power from the Hebraic land laws. These biblical land laws would also come to have a strong influence on European political thought through an intellectual tradition known as the “Hebrew Republic.” I attempt to understand Henry George’s thought as an unwitting revival of this tradition, with his Single Tax as an innovative adaption of the Hebraic institutions. The Hebraic understanding of land ownership continues to offer potential inspiration for alternative systems of taxation and economic regulation.
The notion of the Hebrew Republic has made something of a comeback in academic and popular circles. For example, Eric Nelson, The Hebrew Republic: Jewish Sources and the Transformation of European Political Thought. Nelson's book, in turn, had a significant impact on Yoram Hazony's The Virtue of Nationalism (relevant observations here and here).

In any event, I'm posting about Cutler's article for the benefit of certain, typically Boomer Evangelical Christians as well as their SJW Millennial (grand)children, who identify "Christian" economics in terms of either Milton Friedman or Thomas Piketty.

Two take-aways. First, the tradition of serious Christian economic thought began long before the 21st (or even the 20th) century, and it behooves those who want to be taken seriously to know something about it. And second, there's a whole lotta space between atomistic market liberalism and collective state socialism.

28 April 2020

State Insolvency: Why State Bankruptcy Is The Best Alternative (Updated)

For a thoughtful discussion of State bankruptcy, listen to this podcast in which economists Kate Waldock and Luigi Zingales interview David Skeel. Without question, Skeel is the foremost expert on the subject. I was very pleased to listen to how Skeel manages to convince two progressives that State bankruptcy might actually be (part of) a grand bargain.

A week ago I mused here on why the US Congress might afford individual States the power to restructure their debt in bankruptcy. (You can find some forgotten posts on the topic from nearly a decade ago here and here.)

As matters currently stand, if permitted by their State, municipalities can seek to restructure their obligations under Chapter 9 of the US Bankruptcy Code.To this point, however, the States themselves have no federal forum in which to restructure their current debts and future obligations. This gap is significant in several respects. First, while an insolvent State can always negotiate with their creditors, unless the bond provides otherwise, the State and consenting bondholders cannot force a recalcitrant creditor to go along. For example, even if 999 of one thousand holders of a particular issue of State bonds agree to restructure the underlying debt, a single holdout is not bound. That holdout can seek whatever relief it may under the terms of the bond and State law. The potential for strategic players to hold out makes it less likely that any other creditor will agree to take anything less than timely payment in full.

Second, what of creditors who cannot negotiate? In particular, what about retirees who are entitled to pensions and health benefits? It is not clear that even willing retirees can agree to take anything less than what was promised. (I discuss this problem as it exists in California in When Doing Less Is Doing Best (here)). And negotiating with multitudes of retirees would be especially difficult. Renegotiating deals with hundreds of thousands of retirees would challenging not only because of natural sympathy for the plights of some of them, but also because, unlike tranches of municipal bonds, there is no single indenture trustee with whom to begin negotiations. 

And third, what about non-creditor stakeholders like residents and taxpayers? Perhaps the political process is enough for them (but see my discussion of the need for taxpayer standing in Who Pays the Price: The Necessity of Taxpayer Participation in Chapter 9 (here)). In any event, State constitutional protections as well as the Contracts Clause may effectively take modification of future statutory obligations off the restructuring table.

In any event, the fissiparous process of State-level politics makes it unlikely that any creditors will take seriously the promises of the current State government of fiscal reform made in exchange for debt relief when they know that those promises may be undone after the next election. Out-of-court bargaining to deal with State insolvency is unlikely to be effective.

On the other hand, why should a State care if it cannot restructure its debts? States enjoy sovereign immunity in their own courts (except as waived by their own statutes). And States generally enjoy immunity from suits by citizens of other states in federal courts by virtue of the Eleventh Amendment. Yet, while sovereign immunity is a powerful shield, it's not a sword. Sovereign immunity can't help if a State wants to restructure its debts. And a State might very much like to restructure its debts because it wants to avoid default so it can access the bond market in the future.

Well, if a State faces insolvency, some sort of federal bankruptcy-like system of jurisdiction over the State and its creditors offers a solution to the problems identified above. But might there be another fix, less intrusive and less disruptive? In short, could the federal government, with its seemingly unlimited ability to incur debt, bail out insolvent States as it has (and is) bailing out certain insolvent firms and individuals? The answer is obviously no with the current politically divided federal government. And "no" is still the better answer even if we see a regime change in November.

Several reasons not to provide direct federal funding for insolvent States come to mind. First is the problems with bailouts generally: they distort incentives. States (and yes, their voters) that have borrowed inordinately (or promised unaffordable benefits) should pay a price for their profligacy. Lessons can be learned. So should businesses, of course, which is why federal money for corporations should be limited to those that are systemically significant to the national economy. And even then, the money should come as loans so that the federal claim for repayment is ahead of the interests of shareholders. (In other words, give the lie to the charge against the 2008 bailouts: that they privatized gains but socialized losses.)

Such "strings attached" loans to the States, however, are politically unfeasible and may even be unconstitutional. The "strings" would also be unenforceable: the federal government would be remedy-less were the State later to renege on promises made when it was asking for the money. 

A second issue with federal bailouts for States is found in the nature of federalism. States are so-called laboratories of policies with respect to mixes of taxes, expenditures, compensation for public employees, and economic policies (and yes, subsidies for relocating businesses). It is fundamentally inconsistent with any notion of federalism to tax the citizens of some States to paper-over the long-term unsustainability of other high-expenditure States. Think what we will of the moral probity and wisdom of low-tax, low public-expenditure, high business-subsidy States, it is fundamentally unjust to incur yet more federal debt to cover the pernicious duplicity of a State like, say, Illinois. In short, two wrongs don't make a right.

When all is said and done, State-level bankruptcy is the best solution to State-level insolvency. Bankruptcy restructuring forces players at the State level--elected government and its many creditors (bondholders, employees, retirees, and residents)--to deal with the problem of unsustainable debt. State-level bankruptcy is consonant with principles of federalism and subsidiarity. And whatever its weaknesses (and there would be many), State-level bankruptcy is better than the alternative currently on the table.

23 April 2020

If Cities, Why Not States?

For over five years I frequently blogged about municipal bankruptcy (from Stockton to Detroit, from here to here). Municipal (Chapter 9) bankruptcy permits municipalities, as commonly understood, and also any other State-created subdivision (counties, tollways, sewerage districts, etc.), to restructure their debts under the auspices of the bankruptcy court. But only if specifically permitted by the State.

Placing an insolvent municipality under the jurisdiction of the bankruptcy court forces all parties (the municipality and its creditors (trade creditors, lessors, bondholders, employees, retirees, etc.)) to come together and reach a "consensus" on what should be done; in other words, how much of a haircut each sort of creditor will get. And then this consensus--the plan--is approved by the court and binds everyone. Of course, not all creditors sit around the campfire and sing kumbaya. A few object to the plan and the court will rule one way or the other but eventually a deal is done.

For more than you want to know about some of the ins and outs of municipal bankruptcy you can read my Chapter 9 trilogy of:
Municipal Bankruptcy: When Doing Less Is Doing Best (here);
Who Pays the Price: The Necessity of Taxpayer Participation in Chapter 9 (here); and 
Who Bears the Burden? The Place for Participation of Municipal Residents in Chapter 9 (here)

But what about the States themselves? Can an insolvent State itself seek to restructure its debts under Chapter 9? In short, no. Congress limited Chapter 9 to municipalities, broadly understood, which does not includes the States.

While there has always been some academic debate about expanding Chapter 9 to include States (David Skeel here), and some arguments that States do not need Chapter 9 (Stephen Lubben here), Senate majority leader Mitch McConnell brought the question to public notice here  In short, as everyone knows, the U.S. economy has suffered greatly due to the effects of the corona virus and efforts to slow its spread. The Congress passed the CARES Act, which authorized the expenditure of many billions of dollars in direct and indirect support to taxpayers and businesses. Funds available to the States, however, were limited to reimbursement for costs incurred directly in connection with the virus, and not for the economic effects of the virus and responses to it.

The virus-related economic effects on the States are huge. Tax revenues are plummeting and a host of state and local expenditures are rising. Not surprisingly, the States (at least some of them) have asked for a share of the next round of federal money. And equally unsurprisingly, congressional responses have split along party lines. Thus, Senator McConnell's comments should be seen as proposing an alternative to handing federal money to the states; let them file bankruptcy instead.

As I suggested to David Skeel, I think the odds of Congress amending the bankruptcy code to permit state bankruptcy shot from zero to 2%. In other words, it ain't gonna happen. But I have been wrong before.

For what it's worth, I believe that permitting States to restructure their debts (past, present, and--perhaps most important--future) in something like Chapter 9 is a good idea. This is especially true if the alternative is bailing out States with federal money. But I'll save to another day more about why I believe State-level bankruptcy could be a good thing.

16 April 2020

Craig Stern on Blackstone's Via Media

In barely forty pages former colleague Craig Stern accomplishes two goals. First, he effectively defends William Blackstone from his "cultured" (but largely ignorant) despisers. In other words, he rebuts those who assert either that Blackstone believed in natural law but didn't follow it in his "Commentaries on the Laws of England". Alternatively, that he didn't believe in natural law and wrote of it only in pretense. And second, Stern convincingly places Blackstone in the broad Anglican tradition of historically-informed legal analysis. You can download A Mistake of Natural Law: Sir William Blackstone and the Anglican Way here. I urge you to do so.

Over the years William Blackstone has been pilloried for his assertion that the results of human lawmaking must conform to God's will and this will "is called the law of nature." Blackstone's critics have largely identified his "law of nature" with one configuration of natural law, one characterized by a system of deduction from self-evident first principles. Since nothing that follows in his "Commentaries" remotely corresponds to a set of deductions (for it is, after all, a commentary on the laws of England, not an exercise in abstract moral philosophy), his critics conclude that Blackstone was either stupid or a prevaricator. Either he didn't know he wasn't "doing" natural law, or he was only making a pretense of doing it.

Both conclusions seem improbable but Stern shows why they are flatly wrong. Blackstone was operating with a substantially different notion of natural law than his critics imagine. Nor was Blackstone's version of natural law idiosyncratic. Indeed, it had a venerable pedigree extending back to the "father" of Anglicanism, Richard Hooker.

Hooker (and likely others before him) and Blackstone (and other between them) took discovery of the law of nature to be both a matter of deduction and a matter of empirical observation, with an emphasis on the latter (at least when it came historical practices like law).Taking faith in the God of Providence meant that the best resource for discovering God's will for the law is the law.

Of course, thinkers from Hooker to Coke to Selden to Hale to Blackstone equally believed in human sinfulness and thus resisted making historical practices identical with God's will. God's will was most clearly expressed in Scripture (and as necessarily deduced therefrom), which could trump long-standing practices. Yet each of these Anglicans also understood that the parts of Scripture in which law most clearly featured were directed to a particular people in a particular place at a particular time and thus only occasionally of direct counter-authority to England's legal tradition. Perhaps Blackstone was too deferential to the tradition of the common law but he willingly countered the weight of English tradition with an eye toward comparative law. Blackstone believed that observing how other legal traditions--the ius gentium--framed the law of their societies provided insight into what was perennial and what was merely circumstantial in England's law. In any event, re-understanding natural law in Blackstone's terms undercuts the simple objections of most of his critics.

Stern's turn to Anglican theology provides the foundation for Blackstone's law-of-nature jurisprudence. Stern draws on Richard Hooker's debates with the Puritans like Thomas Cartwright in which the former expanded the scope of prudence over against the Puritan's overly-fastidious doctrine of conscience. For Hooker (and Anglicans ever since), most of life (including law) is made of up of matters, decisions, and rules that could have been otherwise. Someone should decide on what side of the road we are to drive but the choice should be grounded in relevant experience, neither deduced from higher principles nor exegeted from Scripture. Indeed, who that "someone is" is likewise a matter of a people's tradition of civil government.

Even the most puritanical would agree with this example yet, as Brad Littlejohn explains in "The Peril and Promise of Christian Liberty", Richard Hooker greatly expanded the scope of religious and legal adiaphora. Finding sufficient "natural" warrant for English law in the ongoing tradition of the common law was for Blackstone consistent with the breadth of prudential moderation that characterized Anglicanism.

Reframing Blackstone's understanding of the law of nature helps us make sense of the "Commentaries". Grounding his understanding in Anglican theology solidifies our confidence in the internal rationality of Blackstone's project. Yet these advances leaves us (= me) with a concern: is there a meaningful distinction between Blackstone's immanent natural law and simple historicism? Can Blackstone be charged (as some have charged the late Roger Scruton) with being content with holding to a philosophia perennis? I believe the answer is no but Stern's article does not fully substantiate my belief.That Stern doesn't address my concern is no surprise; few of Blackstone's critics take my tack and it was to them that Stern was writing.

In any event, I found Stern's piece eminently readable and clearly argued. There's much more of value than I have described in this brief post so I commend A Mistake of Natural Law: Sir William Blackstone and the Anglican Way to your attention.

09 April 2020

"Christianity and Bankruptcy"

You can go here to read a fine piece by David Skeel. Skeel is always a clear writer, which makes this short essay a worthwhile read for non-academics. He begins by providing an overview biblical view of lending, debt, collection, and forgiveness. Skeel gives the reader more than a series of texts; he places the texts in their historical and "utilitarian" contexts. Skeel next takes us to Daniel DeFoe's proposals for reform of the English law of debt in his 1697 tract, An Essay upon Projects. (The relationship between Defore's proposal and his status as a dissenter from the Church of England was interesting.) Next Skeel moves to the heart of his essay, Christianity and U.S. bankruptcy law. More on that below. He continues with a critique of moralists of two stripes, the "anti-bankruptcy" and the "anti-lending/anti-borrowing" crowds, theonomists (of a sort) and integralists. I have a little to add to Skeel's critique of the second group. He concludes with observations on sovereign bankruptcy where I also have an addition. And all of this in 28 pages!

I won't summarize Skeel's arguments. They are solid and generally persuasive. Folks can read them for themselves. I will, however, make a few comments in the nature of criticisms. More in the sense of what Skeel omits than in the conclusions that he draws. 

The Biblical Context
Unlike anyone else I can recall, Skeel takes the Bible to valorize debt. The set of biblical restrictions on debt and its collection "necessarily implies that debt is beneficial, despite its risks. ... If debt were undesirable, the Mosaic law could simply have banished it." Like divorce? In other words, the same texts could be understood as the regulation of a necessary evil. I do not believe that conclusion would be correct because humans, even apart from sin, are physically-needy, time-bound creatures. We would have used debt to further the development of creation even apart from sin. Skeel spends some time dealing with the biblical restrictions on collateral, which I addressed at more length in a four-part series at IIIM Magazine Online (here, here, here, and here).

Christianity and U.S. Bankruptcy Law
Skeel struggles to articulate a causal relationship between American Christianity and the "fresh start" principle of U.S. personal bankruptcy law. The idea that debtors could chose bankruptcy, surrender non-exempt assets for the benefit of their creditors, and receive a discharge first appeared in the Bankruptcy Act of 1841. But what, apart from the idea of forgiveness does this ground-breaking piece of legislation, owe to Christianity? Skeel bemoans that "explicit appeals to Christianity largely disappeared from the legislative debates over bankruptcy" at this time. Nonetheless, he concludes that "Christianity seems to have played an indirect role", citing the alleged influence of Southern(!) and Western(!!) Evangelicals in the election of 1898.

There is much wrong with this account. First, as I wrote in The Missing Piece of the Puzzle: Perspectives on the Wage Priority in Bankruptcy (download here or here), there is evidence that Northern Evangelicals (the foundation of the Whig party) played a strong supporting role in fostering the enactment of the Bankruptcy Act of 1841 with its fresh-start provision. Second, citing the votes of Southern and Western states for William Jennings Bryan in 1898 does little to advance the argument that the fresh start has distinctively Christian roots. Christians in the late nineteenth-century South, unlike their descendants a century later, were not "Evangelicals." Evangelicalism--if there was/is such a "thing" (see my comments here and here)--was then still largely a Northern and Midwestern phenomenon.

Delayed Bankruptcy Relief
Here I want only to observe Skeel's criticism (in a footnote) of the position of Jonathan Burnside. I have found a great deal of value in Burnside's 500-page "God, Justice, and Society: Aspects of Law and Legality in the Bible" (OUP 2011). Yet, like Skeel, I found unpersuasive Burnside's argument in favor of direct investment over against illicit debt financing. So too Brian McCall's argument in "To Build the City of God". Both of these anti-lending/anti-borrowing approaches have a scent of the nostalgic about them.

Sovereign Debt Crisis
Briefly, I agree with Skeel's surprising argument that nation-states have more in common with individuals than with corporate debtors. States are (or should be, if they're not empires) the authoritative civil representative of a people. Unlike corporate entities, states are not creations to serve utilitarian purposes. Like individuals, there is a plausible argument that states should be able to seek something like a discharge of indebtedness. (What I wrote in Who Pays the Price? The Necessity of Taxpayer Participation in Chapter 9 (here or here) would be consistent with this conclusion.)

In short, read Skeel's essay. It's short and to the point, and should give folks plenty of food for thought.

30 March 2020

Student Loan News

I haven't posted on student loans for a long time. (A convenient index of earlier posts here.) 

And this post is merely to send folks who are or who want to participate in the Public Service Loan Forgiveness Program here to learn how the ‘‘Coronavirus Aid, Relief, and Economic Security Act’’ (the so-called CARES Act, a/k/a the stimulus (or helicopter money)) will affect this program.

23 March 2020

Grief, Lament and Hope

Since mid-way through Campbell University's Spring Break--with the realization that the effects of spreading cononavirus would be felt worldwide, and the declaration that all law school classes would move to online--I felt a disquieting sense of unease. Some of it had to do with the large number of deaths reported from Italy, some with concerns about our children's work and childcare situations, but otherwise the source and nature of my melancholy remained unfocused. 

Unfocused, that is, until I watched this brief (nine-minute) commentary by the pastor of our previous church home, Ruffin Alphin. Since then I have seen others also pinpoint the nature of my mood: grief. Grief for things I have lost, like embodied Sunday worship with our current communion of saints, and grief at the loss of face-to-face contact with my students. And too, grief for the losses of many others whether to death of loved ones, losses of a job or business, or the sense of anomie that comes with "sheltering in place".

But why now? After all, the continuous stream of life in this world provides ample opportunity for grief. Why do I feel grief more now than usual? Of course, usually my losses are run-of-the mill; I've become used to the effects of aging and the imponderable what-ifs of life. And while the world's current losses appear greater than usual, I'm not sure that's the case. After all, death, terrorism, pestilence, famine, and unemployment afflict many millions every day.

Whatever the occasion for grief, what response is appropriate? Drawing from the biblical text, lamentation seems most fitting. Which caused me to recall the conference taught by Michael Card, Recovering the Lost Language of Lament. You can read a brief post with a few of my observations about the conference here. Something I wrote then seems especially apropos now:
Card began by noting that lament exemplified in the Bible is a communal activity; thus, individualized American Christians don't handle grief/sorrow/lament well. Coupled with a religious culture of unrelenting extroverted positivity, lamenting is virtually unknown in White evangelicalism. The Black church in American never lost an appropriate place for lament for obvious reasons.
Grief should be acknowledged but should not become a slough of despond. Grief should be turned outward but not weaponized. (Or, need I mention, politicized.) Grief should instead be turned into lamentation. Following the path of Job (and David and Jeremiah and Jesus), we should direct our lamentations to God. Indeed, we should feel the freedom to ask two questions of complaint: God, where are you? God, if you love me, why? We like Job may eventually get answers. Or we may not. Nonetheless, we can live in the hope that all will be made right and our laments will end:
"Behold, I make all things new." (Revelation 21:5) In that moment, we will realize to our great joy that, all along, this journey of lament has been a journey toward the New Jerusalem. ... [Ultimately] we leave our laments and forget once and for all the vocabulary of their pain and the syntax of their sorrows! Lament will become the faithful companion with who we part ways when the journey comes to an end.
But wait. This remains a future destination. It gives reason for hope ... This hope is meant to shape and give meaning to us in the twists and turns of the journey. But the future hope does not cancel out our need to lament now in fact it accentuates our deep need to lament what remains. The promised hope makes the pain of the present journey bearable.*
The present practice of our future hope can take many forms, service, thanksgiving(!), and ... even humor(!!). (For some observations about the place of the latter go here for the words of Melissa Baartman Mork.) None will be complete. None will eliminate the grief over which we lament. But all three can help bring us into the presence of our faithful, loving God.

Michael Card, A Sacred Sorrow: Reaching Out to God in the Lost Language of Lament 142 (NavPress 2005). (Emphasis added.) 

17 March 2020

Courage, Grace, and Delight: Three Good Films

Not sure any of these films can yet be streamed but regardless whether you can see them now or will have to wait until (much) later, I can recommend all three.

1917. A story of two young British soldiers in WWI sent on a high-risk mission. One appreciates the risks; the other doesn't. One dies; the other lives. Determination, courage, and brotherly love in the face of great adversity. Reminded me of Dunkirk. A good review here.

A Beautiful Day in the Neighborhood. Not so much the story of Fred Rogers but of the effect that Rogers had on Lloyd Vogel, an investigative reporter sent to do a puff piece on Rogers. Looking for cracks in Rogers's facade, Vogel comes to see Rogers for the kind, unassuming man he is and sees his life turned around under Rogers's "ministry". As others have noted, the film downplays Rogers's Christian faith in favor of a heartfelt humanism yet a movie well worth watching. For the first ten minutes I observed how well Tom Hanks was playing Fred Rogers. Thereafter Hanks was Rogers.

Emma. In a word, a delight. An exceptionally well-crafted cinematic version of Jane Austen's eponymous novel. Over the course of the film Emma, beautifully played by Anya Taylor-Joy, grows from a mischievous manipulator of the affections of others into one whose personal affections are redirected from herself to others. The scenery, costumes, manners, and dialog were true to the lives of the landed gentry in Georgian England. Every bit as good--although not as out-loud funny--as Love & Friendship.

In short, three outward-facing opportunities with wisdom for life in disquieting times.

10 March 2020

Liberalism and Nationalism: The Other Half of Yoram Hazony's "The Virtue of Nationalism"

I posted about one half of Yoram Hazony's critique of contemporary liberalism in Liberalism's Latest Critic (And Why It's Not Quite Enough). The other half of Hazony's agenda is the restoration of a legitimate place to nationalism, rightly understood. Unlike the editorial boards of The Economist and The New York Times, nationalism is not a dirty word. In simplest terms a nation is a family writ large. A nation is that group of people with whom we identify as a result of the intersection of a series of factors such as geography, ancestry, language, religion, and culture. Humanity, the largest of all human groupings, is certainly real but "humanity" represents such an abstraction from the felt experience of our lives that appeals to it cannot carry the same affective weight as "our nation". And those who give short shrift to the nation in favor of humanity (or, more likely, internationalist organizations like the EU or the UN) often do so in service of an ideology of individual sexual autonomy or free-flow financial capitalism. (For more about the former read Not So Fast: The Right Side of History Might Be Wrong and about the latter, "The Third Pillar".)

As I observed in Liberalism's Latest Critic, Hazony responds to anti-nationalism by observing that, practically, the warrant for a polity's continued existence comes from within its lived experience, not from an abstract ideology. And that "within" is fully human, not a deracinated brain on a stick. Hazony goes on to frame the virtues of the nation in terms of its opposite, the empire.

Rather than commenting on Hazony's contrast between nations and empires I'll direct my readers' attention to an excellent piece by Jake Meador, Nations and Nation-States: A Question for National Conservatives. A couple of quotes. On the one hand,
Hazony seems to envision ’empires’ as being a set mode of organizing political society and ‘nations’ as being another fixed mode such that any given polity can be either an empire or a nation, but never both. Yet the distinction between the two in practice seems to be one of policy rather than administration, such that a polity can behave like a nation at times and like an empire at other times. ... He conflates the naturally occurring communities following from humanity’s natural sociability with ‘nations’ and the coercive tyrannies that follow from humanity’s greed and lust for power with ’empires.’
The nation-state is not a universal good. Rather, to succeed nation-states must arise organically from the life of people bound together by mutual loyalties and mutual loves. Yet globally speaking this refers to a relative minority of the world’s nation-states. The majority of nation-states, it seems, are synthetic forms imposed upon peoples by outsiders.
It is difficult for American to perceive the truth of Meador's observation. After all, America as a nation is the beneficiary of the long, organic growth of European nations. Much of the rest of the world is not. Nation-states in many parts of the formerly colonized world are concatenations of multiple nations. In other words, they are empires writ small.

As did I, Meador does not dismiss Hazony's work. Jake agrees that there is much good in it and that Hazony has done all of us well by resuscitating the idea of the nation and a discussion of the virtues of nationalism. More remains to be done but for one I am thankful that Hazony has helped begin the process.

(For my earlier, pre-Hazony comments on nationalism you can read Religion and Nationalism.)

05 March 2020

Don't Cite This Case!

(Warning: Inside Secured Transactions baseball.)

Notwithstanding the best efforts of the very good drafters of Article 9 of the Uniform Commercial Code, the Wisconsin Court of Appeals managed to get it wrong in Northside Elevator, Inc. v. Ossmann, 2019 WI App 33 (Court of Appeals 2019).

The year 2000 and subsequent revisions to Article 9 (read about many of them in my 2001 article here) aimed to achieve several goals. One of them was the clean up the confusion of how to identify the name of a debtor when perfecting (registering) a security interest. In short, should subsequent searchers have to look under all potential names, or should original filers be required to get it "right" the first time on pains of being unperfected? The drafters unequivocally chose option number 2: it's up to the original filer to file under the correct name of the debtor and to amend the filing if the name of the debtor changes.

It's easy to get the name of a corporation or other registered entity right, after all, a filer can simply look to the corporation's registration with the appropriate state authority. But what about individuals? Do filers need to get their birth certificates? No, it's much simpler. A secured creditor filer need only use the name of an individual as it appears on her drivers license. Easy, right? Not so fast.

What if the drivers license of, say, Jeffrey A. Ossmann, expires, and he gets a new one with the name Jeffrey Alan Ossmann? Here too the rule is simple: the original filer has to keep track of its borrowers and file an amendment within four months of the change. A change in name on a drivers license is not common but it regularly happens when women marry. In any event, banks should have systems in place to monitor this sort of thing. But Bremer Bank didn't.

Enter Northside Elevator. It also wanted to extend credit to Jeffrey so it searched under the name on his new drivers license. Did Bremer Bank's filing, still under Jeffrey's old name, appear on Northside's search under his new name? No, it did not. With a clear search Northside went ahead, extended credit to Jeffrey, and filed under his now-correct name. When Jeffrey couldn't pay, Northside went to seize its collateral only to be met by Bremer Bank that claimed its earlier filing meant it had priority. But Bremer hadn't amended its filing to reflect Jeffrey's "new" name. Which meant it should be subordinate.

Bremer Bank certainly should have been subordinate to Northside but that's not what the Wisconsin Court of Appeals decided. In an obtuse opinion it concluded that Northside(!) should have searched under variations of Jeffrey's name, even though Article 9 states that the name of the drivers license is an individual's correct name, and even though Bremer Bank had four months after Jeffrey's name change to protect itself. 

Perhaps this case should encourage students who struggle with their course in Secured Transactions. Even their "betters" can get it wrong. Better yet, the opinion states that it "may not be cited in any court of this state as precedent or authority." At least the court got that right.