22 April 2014

Hopes And Fears In San Bernadino

I've posted here, here, and here about a fundamental problem that faces many cities in California: out-of-control pension obligations. California law makes pension obligations sacrosanct; they cannot be modified. But what if the cost of those pensions becomes unsustainable? Tough, says CalPERS, the California Public Employees Retirement System. State laws says cities have to pay and that's all there is to it; current employees and citizens can pound sand.

Does Chapter 9 municipal bankruptcy offer an escape hatch? Applying Michigan law, Judge Rhodes overseeing the Detroit bankruptcy has said yes (which is on appeal to the Sixth Circuit Court of Appeals) and so did the bankruptcy court in the Vallejo bankruptcy applying California law. On the other hand, other cities like Stockton, California have chosen not to cut back on their payments to fund the pensions of retirees.

But what does all this mean in practical terms? Go here to read about the possibility that the city of San Bernadino might take up the challenge to fight CalPERS and so ultimately to reduce pension payments. Given that payments demanded by CalPERS have increased five-fold in the past dozen years ($5 million in 2000; $26 million in 2012), the ability of the city to pay and provide at least minimal services to current citizens are on a collision course.

And if that's not enough, go here to read an astute post about Stockton's case. All the players but one have agreed to take cuts in favor of leaving pension obligations alone. But the one who is sticking to its guns might derail the entire carefully-crafted plan. After all, the Fidelity Funds argue, to pay CalPERS a greater percentage of its claim is "unfair discrimination," and the Bankruptcy Code prohibits such treatment. (The murky difference between mere "discrimination" and forbidden "unfair" discrimination was one of the subjects of our panel discussion at last week's symposium at Widener Law School.)

Stay tuned. The fun is far from over.

21 April 2014

Bavinck on Inequality: Jean vs. Jean


Cover Art

From Herman Bavinck's essay "On Inequality" in his collected essays:
Through this confession [of God's providential ordering of all things], which only a strong generation can accept, [Jean] Calvin taught his followers first of all acceptance, submission, and contentment in times of struggle and oppression. However, few people today will thank him for this.
In contrast,
Sowing discontent and systematically goading people to be hostile toward all prevailing conditions and arrangements are held in much higher esteem by many. [Jean-Jacques] Rousseau is their great example, for he is the one who, blaming everything on society and culture, made people proud and rebellious, but he also caused them an endless series of disappointments, for revolution that runs counter to nature is a sword that always turns against the one brandishing it. 
What Bavinck observes about political life could be applied to economic life dominated by the spirit of consumer capitalism. Simply add "marketing" to "revolution" and you have the driving force of late modernity: discontent.

Ben-Hur and Noah: A Tale of Two Movies

Does it matter that I haven't seen Darren Aronofsky's Noah? I'll let my readers judge but at least I have seen Ben-Hur: A Tale of the Christ within the past few days (comments here). Other than drawing on the Bible for their themes, what could a 1925 black and white silent film have in common with a 2014 production featuring the latest in computer-generated images?

For starters, both are tales and tall ones at that. Both are fictive elaborations on the biblical text that tell stories designed to get folks from their respective eras to lay down some cold cash. Indeed, if one is looking for fidelity to the biblical text, Noah is probably the better of the two films (but more about that later). While more members of audiences in 1925 would have identified themselves as Christians than in 2014, in the case of neither movie was the primary goal other than commercial success. In his Noah, however, Aronofsky also tried for something more than commercial success, which suggests that it won't be the blockbuster that was Ben-Hur.

Jewish film insiders brought both films to fruition for non-Jewish audiences. Directors Fred Niblo and Darren Aronofsky were Jews and one shouldn't forget that it was Louis B. Mayer who was the driving force behind Ben-Hur.

Both starred leading men of their days although Ramon Novarro as Judah Ben-Hur was at the outset of his career as an "exotic" example of beefcake while Russell Crowe as Noah has been at the top of his game for some time. Crowe's straight sexual orientation is another distinction.

Each film is circumspect with regard to its portrayal of the Deity. From concerns about the Second Commandment, Ben-Hur took pains not to show any more of Jesus than his hand as it reached out to effect healing. (A concern that has long since lapsed from the consciousness of most Christians.)  Noah substituted visionary dreams for God's direct discourse as recorded in the Bible. Perhaps Aronofsky was also concerned to guard God's transcendence or maybe it was simply to avoid picking someone to do God's voiceover.

Many Christians identified as Evangelicals have strongly criticized Noah for a variety of reasons, most of which center around its elaborations on Noah's character, motivations, and actions. I wonder if Evangelicals in the 1920s were as exorcised by Ben-Hur? At least Aronofsky's variations from the Bible don't undercut the Gospel. Ben-Hur, on the other hand, ends with Jesus' crucifixion and an identification of the message of "the Christ" as one pacific forgiveness as exemplified by a really nice guy who sadly died. (But still a great example!) Early twentieth-century American theological liberalism as it best worst.

I doubt that I'll see Noah so I'd appreciate relevant comments from those who have. And, as I mentioned yesterday, I delighted to watch Ben-Hur while listening to the live performance of Stewart Copeland's wonderful score. In neither case, however, should anyone confuse a commercial cinematic production with the text of the Word of God as proclaimed by the Church. Artistic and commercial efforts need not be tethered to the message of God's word. They have their own truth to tell and audiences should not feel betrayed when the artist's vision is something other than the Holy Spirit's.

20 April 2014

A Remarkable Remake of Ben-Hur: A Tale of the Christ (Part 1)

The six of us went Saturday night to watch the silent version of the 1925 classic Ben-Hur: A Tale of the Christ. I had seen the 1959 "talkie" starring Charlton Heston on television as a child but until recently I hadn't known about the silent version, which was the greatest spectacle of its day (and for many years later).

We saw the premier of a remastered and edited version of the silent film at Norfolk's Chrysler Hall together with a live symphony performance of a score created by Stewart Copeland, drummer for the 80s rock group The Police. In a word, the production was magnificent. Fred Niblo's direction of the vastly over-budget ($200 million in today's dollars) film adaptation of Lew Wallace's best-selling 1880 novel by the same name was a box-office hit that took nearly 20 years to recoup its investment. The reality of the staged naval battle and chariot race (in which several performers died) created an emotional intensity that the CGI era of special effects, no matter how spectacular in themselves, cannot match.

Copeland's score was exceptional. It was well-adapted for the film and well-performed the Virginia Arts Festival symphony orchestra. Go here to read an interview with him about the process of composing and working with MGM to get the rights to re-edit the film and show it with a live orchestra. Copeland demonstrated his percussion virtuosity by moving from his drum set to use all sorts of chimes, blocks, and other instruments I couldn't identify. His intensity was evident and the folks in the orchestra told us they had greatly enjoyed working with him. They also were proud to have performed the premier of Copeland's work.

I don't know when or where you can next see the film and musical performance but highly encourage you to take it if you can.

(Part 2: some comparisons of Ben-Hur and Noah.)

18 April 2014

Two For One: Detroit and the Archdiocese of Milwaukee (With A Nod to Dante)

Go here to read a very good summary of how the emergency manager of the City of Detroit is working deals with each creditor constituency. One-by-one or divide-and-conquer, whatever it's called, is exactly what debtors do in a Chapter 11 and there's no reason to use anything different in Chapter 9. It's all about the money and votes (of creditors, not citizens), not some abstract notion of fairness. (Go here to download an early draft of my article on this topic; a final version will be coming any day from the American Bankruptcy Law Journal.)

I suppose it's appropriate that I finished reading Clive James' new translation of The Divine Comedy on Good Friday, the day after Judge Susan Kelly approved the disclosure statement of the Archdiocese of Milwaukee. You can read about it here.

I wonder if anyone in Judge Kelly's courtroom realized that Dante's account of his journey through hell and purgatory to heaven began the same day, the Thursday before Easter, 700 years ago?

More On An Aging Population

I've commented here, here, and here about the effects of a falling birthrate on public retirement systems. A falling birthrate is one, albeit small, reason why municipalities are finding it increasingly difficult to fund pension promises to retirees. It's only a matter of time before states suffer the same fate, and not much longer yet before the federal Social Security system finds itself broke. Social Security can be changed and thus saved by legislative action, at least once it becomes politically feasible, but state and municipal public pension may be locked in place. (For the reasons why states and cities can't modify their pension obligations go here and here.)

If you want to see 30 or so years into America's future, read this piece at the Washington Post about the increasingly dire situation in Singapore. Singaporeans aren't having children; the birthrate is 1.2, not enough to replace a population that is retiring from productive labor. Already the ratio of workers to retirees is 6:1 today (down from 17:1 30 years ago) and is expect to fall to 2:1 in only 16 years--by 2030.

If we aging folks hope to retain the good will of our children and grandchildren, we had better give some thought to saving more and expecting less from our government retirement systems.

15 April 2014

Municipal Financial Distress Resolved!

Props to Juliet Moringiello, the staff of the Widener Law Journal, and the many speakers at Monday's symposium "Solving the Problem of Municipal Financial Distress." Along with the many in attendance, I concur the symposium was a great success.

The morning saw two panels that focused on current and potential developments in Chapter 9 (municipal) bankruptcy. I was part of the second panel that looked at standards for confirmation of a Chapter 9 plan of adjustment. With pre-symposium planning by Mark Kaufman, additional panelists Guy Neal, David Skeel, and I, together with moderator Michael Hussey, managed to keep the crowd entertained and informed about the largely unlitigated "back-half" issues in Chapter 9.

Issues of a municipality's eligibility to be in Chapter 9 have gotten all the attention so far but we can expect to see some law made next month in the confirmation of the plan of Stockton and later this summer for Detroit. Among the topics of our discussion were the three-fold requirements that a plan be fair and equitable, not discriminate unfairly, and be in the best interests of creditors. There's plenty of room for disagreement about these tests because their history in Chapter 11, place in Chapter 9, and lack of reported decisions make their application to municipalities uncertain.

The afternoon sessions addressed the macro-problems of American cities, problems to which Chapter 9 offers only a small part of a solution. I plan to post on all the other panels in due course but urge folks to keep their eyes open for the fall 2014 issue of the Widener Law Journal to see the range of topics addressed at this symposium.

13 April 2014

T-1 To Solving the Problem of Municipal Finance

The Widener Law Journal's symposium "Solving the Problem of Municipal Financial Distress" begins tomorrow. Read more about it here.









 I hope to send out some tweets (@profpryor) as the program progresses. I'm confident I'll post a blog entry or two after it's over. In the meantime, I'm forced to wait in the Harrisburg Hilton.

12 April 2014

Economics ... In The Beginning

Go here to watch a fine interview of Paul Williams. Williams is Executive Director of the Marketplace Institute and Academic Dean at Regent College in Vancouver, British Columbia (not to be confused with my institution, Regent University, Virginia Beach, Virginia ), and was interviewed for Comment, a print and online magazine whose byline is "public theology for the common good."  The topic under discussion sets up matter well: "In the Beginning Was Economics."

I am especially grateful that Williams grounds economic life in the creation account. In the first chapters of Genesis, humanity as a whole through our first parents was called to work, and to work cooperatively, just as God, in whose image we were created, worked as Three in One. Likewise, humans were called to work creatively, reflecting their marvelously creative Creator God.

Favoring grounding economic life in creation shouldn't surprise those who have read what I have written. For examples, you can download my very short The Law of Contracts: A Place to Start in which I argue that two pairs of presuppositions underlie contract law: the twin virtues of love and justice as well as the sad reality of sin and its deforming effects. These presuppositions work themselves out in history but not history as a chronology of social causes and effects; rather, history as the dynamic of creation, fall, redemption and, ultimately, consummation. Those who enjoy full-length articles with accompanying "scholarly apparatus" (i.e, footnotes for the most banal of propositions) might wish to download my Principled Pluralism and Contract Remedies.

Williams then addresses a topic on which I'm afraid I may have exhausted my readers' patience: the moral justification of the modern business corporation. For some of my ideas on this topic check a few of my posts here, here, and here. Williams briefly discusses the new "social enterprise" form of corporate existence. He doesn't mention crowdfunding, something I've discussed here and here, but there's only so much he could do in a little over 12 minutes.

In conclusion, Paul Williams neatly and clearly summarizes what I think is the epitome of Christian thinking about the fundamental nature of the human vocation and some aspects of its current expression..

 

11 April 2014

Time to Download Sherlock Duane

A short while ago I posted some words here about a delightful article about a dry subject by colleague James Duane. The article can now be more efficiently downloaded by going to the SSRN website here.

10 April 2014

Checking Under Detroit's Seat Cushions

Go here and here to read two accounts of Detroit's latest offer to bondholders that puzzles me. Just where did Detroit find the extra hundreds of millions of dollars it now proposes to pay on account of its "UTGO" ("unlimited tax general-obligation") bonds? It can't be from selling the city's art collection for more money because, oddly, the city wants to take less than the latest offers on the table for the assets of the Detroit Institute of Art. (The second article linked above also addresses the art-sale issue.)

Unlike businesses in Chapter 11 that can promise more money to their creditors by proposing to operate more profitably or entering new product lines, cities are pretty much stuck with what they have on the income side: property taxes and user fees. Where did Detroit suddenly "find" the wherewithal to pay huge bucks today that it couldn't pay last week?

None of this is to suggest that Detroit shouldn't pay more to its bondholders. It's only to express the obvious concern that even current city management is making it up as it goes along. Which begs the question: Should anyone believe what Detroit is saying?

(For more municipal bankruptcy thoughts go here to download an early draft of an article that will soon be coming out in the American Bankruptcy Law Journal.)

09 April 2014

Dale Coulter and The (Mis)Place Of The Humanities In Higher Education

Go here to read a piece at the First Things blog by Regent School of Divinity colleague Dale Coulter titled "Humanities and the Shaping of Life." Coulter applies to contemporary higher education a critique similar to the one I have made of contemporary neo-classical contract theory and libertarian political theory. (Check here for some of my comments about contracts and here for some thoughts on political theory.)

On to the place of the humanities in contemporary higher education. In the classical past, in Coulter's words, the goal or end of  of "the humanities" was that they they "should lead to human flourishing." For Christians, the purpose of study of the biblical texts ("salutary teaching") was, "in the words of Paul," to produce "piety or godliness, which gives rise to a moral life grounded upon the intrinsic social nature of human existence." In other words, the purpose of humane studies on either the Classical or Christian account was to assist one in becoming a better person.

All has changed in modern times as we can see in Harvard's recent apologia for the humanities. No longer is the purpose of the study of the great (and not-so-great) texts of a culture to promote human flourishing much less piety or godliness. Of course not; how could any modern person think such antiquated thoughts? After all, we now know that there is no end or goal of life that is particularly human. Instead--and here I'll let Coulter himself summarize Harvard's explanation of the value of the humanities--
There are three traditions derived from the humanities that inculcate this capacity, according to the report. The first is a tradition of criticizing errors in texts and approaches to historical periods commensurate with Renaissance humanism. Like their forebears, classicists must practice a “suspicious hermeneutic.”
The second is a tradition of “disinterested, artistic enjoyment” that moves beyond the ideological content conveyed by any work of art to an appreciation of the beauty and form of the piece. Art can be re-appropriated for its aesthetic value once freed from the ideology it conveys. The third is a tradition that seeks to re-appropriate the past in the service of identity politics. Through the lens of gender, race, and sexual orientation, the past can be re-read in a way that creates “communities of resistance,” which can become “liberating, transformative social movements.”
In short, we moderns should study the work of the Western tradition with an attitude simultaneously of suspicion and haughty disinterest all the while in the service of identity politics. Heaven help us. If that's the how and why of the humanities we should stop reading literature, listening to great music, and observing serious art right now! No wonder folks want STEM degrees. At least science, technology, engineering, and math are premised and practiced on a foundational belief that there is truth out there and that we can come to know it.

Harvard's report entirely misconceives the place of the humanities in education. Instead of giving us tools of deconstruction and reconstruction of sexual identity groups, the humanities can serve as pieces of the puzzle by which we come to understand what it means to be human beings, created in the image of God, horribly fallen into sin, but destined to glorify our Creator and Redeemer.