ProfessorBainbridge.com

Should Law Professors for Dress for Success?

It's back--the annual start of school debate over what law professors should wear to class. (The ABA Journal has a roundup from the last go round.)

Bennett Capers began the discussion this time, noting that:

We’ve all heard the expression “clothes make the man.” But do clothes also make the professor? Especially if the professor looks young enough to be a student, or is female, or a person of color, or LGBT, or some combination of the above? And am I the only one, at the start of yet another school year, thinking about this?

One of my favorite quotes from an article I wrote about appearance and the law, Cross Dressing and the Criminal, comes from Allison Lurie. In The Language of Clothes, she wrote: “For thousands of years human beings have communicated with one another first in the language of dress. Long before I am near enough to talk to you on the street, in a meeting, or at a party, you announce your sex, age and class to me through what you are wearing—and very possibly give me important information (or misinformation) as to your occupation, origin, personality, opinions, tastes, sexual desires, and current mood. I may not be able to put what I observe into words, but I register the information unconsciously; and you simultaneously do the same for me. By the time we meet and converse we have already spoken to each other in an older and more universal tongue.”

Given the importance of this first impression, am I the only one that obsesses at the start of the school year about what to wear on the first day of class, down to what color tie to wear? And I’m curious. Given that professors who don’t naturally look professorial—I think you know what I mean—often have to do extra work to command respect and authority, is it mostly those professors who worry about clothing and first impressions?

This prompted Ashby Jones to reminisce:

We showed up at law school many years ago not really knowing what to expect. But our civil procedure professor — Richard Friedman at Michigan — showed up on the first day dressed in a suit. It made a helpful impression on us — an impression not so much about Friedman but law school generally. It made us sit up and say to ourselves, ‘oh, right. This ain’t undergrad. We’re being trained for a profession here.’ And that, in retrospect, wasn’t an entirely bad chord to strike early on, we thinks.

As  a junior professor, I always wore a suit and tie at least on the first day of the year. I did so mainly to set myself apart from the students, who back then were much closer to me in age. As Capers notes, it helps set a tone of professionalism, respect, and authority. By virtue of his/her youth, lack of teaching experience, lack of scholarsly reputation, and so on, a junior lacks gravitas. A suit can help. So I think that it makes sense for juniors to worry about choosing the right outfit and to err on the side of formality.

Like it or not, I think it also makes sense for female professors to do so. I've read a zillion student evaluations over the years in connection with tenure and promotion decisions. Female professors tend to get many more student comments about clothing, haircuts, and so on than do male professors. It's sexist and unfair, but it's a fact of life. Conservative and professional but not frumpy seems the best bet.

Geography matters too. A first year professor at a top 50 East Coast school really ought to wear a suit and tie. Out here in California, that outfit would look odd and out of place. You're a geek trying too hard.

As for me? My position is rather different than Capers, of course. For one thing, I've been in this gig over 20 years. My rep--for better or worse -- precedes me. So I don't worry too much about first impressions. Having my name on the case book spine probably helps too. For another, I teach second and third years. They're much less easy to impress with fashion and other superficialities than are first years.

I ditched ties, suits, sports coats, and all that nonsense when I moved from Illinois to UCLA. After all, while I've never seen one of my colleagues teach in flip-flops, I have seen more than one teach in Teva sandals.

Last year, I had occasion to update my formal and semi-formal wardrobe. In order to get my money out of the new suits, I started wearing them again. But I quickly concluded that it's just not me. I'm a comfort guy. I was grunge before anybody had ever heard of Kurt Cobain. If I thought I could get away with it, I would teach in sweatpants and a vintage Redskins jersey. Indeed, as I told Jonathan Adler the last time this issue came up, I only wear "ties East of the Mississippi, and even then under some amount of duress."

So I retired my new suits to the back of the closet to await a professional trip back east, a funeral, certain weddings, and the like. My golf shirts and khakis came back to the front of the closet. In sum, back to business casual.

I would like to find an occasion to wear my tux again, however.

Saturday Funnies

Top Gear Classic: Use a Corvette V-8 engine to power a blender, with the voices chipmunkized:

Plus, the V-8 powered rocking chair goes awry:

The Stop Trading on Congressional Knowledge Act

My article, The Stop Trading on Congressional Knowledge Act, now can be downloaded from SSRN.

Abstract: A 2004 study of the results of stock trading by United States Senators during the 1990s found that that senators on average beat the market by 12% a year. In sharp contrast, U.S. households on average underperformed the market by 1.4% a year and even corporate insiders on average beat the market by only about 6% a year during that period. A reasonable inference is that some Senators had access to - and were using - material nonpublic information about the companies in whose stock they trade.

Under current law, it is uncertain whether members of Congress can be held liable for insider trading. The proposed Stop Trading on Congressional Knowledge Act addresses that problem by instructing the Securities and Exchange Commission to adopt rules intended to prohibit such trading.
This article analyzes present law to determine whether members of Congress, Congressional employees, and other federal government employees can be held liable for trading on the basis of material nonpublic information. It argues that there is no public policy rationale for permitting such trading and that doing so creates perverse legislative incentives and opens the door to corruption. The article explains that the Speech and Debate Clause of the U.S. Constitution is no barrier to legislative and regulatory restrictions on Congressional insider trading. Finally, the article critiques the current version of the STOCK Act, proposing several improvements.

Keywords: insider trading, Congress

JEL Classifications: K22

I'm worried I'm becoming a moderate

After taking a ton of abuse from Sarah Palin fans in the comments to a recent post, I'm worried that the same thing that happened to Jackie and Dunlap is happening to me:

SCOTUS Takes on Exec Pay in Jones v. Harris

Dale Oesterle comments:

The Supreme Court has agreed to take a case on executive pay, Jones v Harris Associates.  In case is on manager's fees in the mutual fund industry but the holding will have profound effects on corporate governance in all industries.  The question is whether a mutual fund board of directors or mutual fund investors have adequate incentives to police executive fees, in this case the fees of the mutual fund managers.  Judge Easterbrook, writing for the majority, said yes; Judge Posner, writing alone in dissent said no.  On the facts, the mutual fund paid higher fees for managers managing its large public funds that it did for the same manager managing its private funds controlled by large institutional investors.  The Court could go with the new "behavorial economic" theorists that say small investors make predictable mistakes in both voting (incumbants always win) and in investing (holding losers too long and chasing winners) and that the boards of directors selected by small investors are not accountable in fact to them.  Or the Court could go with traditional economists that argue that investors power to sell their investments is power enough to control boards and executives that invest their funds and that other paternalistic overview systems (government oversight) would be worse, stifying innovation and competition.  This case will reaffirm or change existing practice and either result will have ripples across the governance of companies countrywide.   

I'm not sure about that ripple effect. Donald Langevoort’s article, Private Litigation to Enforce Fiduciary Duties in Mutual Funds: Derivative Suits, Disinterested Directors and the Ideology of Investor Sovereignty, 83 Wash. U. L.Q. 1017, 1019 (2005), suggests a certain need for caution drawing parallels between mutual funds and corporations. Indeed, Langevoort expressly argues that, in light of the unique features of mutual fund governance, “judges and policymakers should not even try to reason by analogy to governance in other kinds of corporations.” He highlights “the convergence of the capital and product markets that occurs when the products being sold by the mutual fund are its own securities. Here, the ideology of consumer sovereignty easily crowds out a strong norm of fiduciary responsibility.”

Langevoort further argues that “‘Disinterested’” directors see little need to measure the behavior of the fund’s advisor by reference to anything other than marketplace success—and indeed can be chosen precisely because they embrace the ideology of the markets and see the law’s assignment to them of strong fiduciary responsibilities as something of an exercise in formalism.”

Finally, he notes that:

Mutual funds are not enough like business corporations for there to be any more than a facile analogy.

Any plausible theory of effective market discipline in corporate law generally rests on some combination of the following: an efficient capital marketplace that prices both good and bad corporate governance with reasonable precision; compensation of key insiders using stock or options, so as to better align the interests of managers and investors; the emerging power of institutional investors who can actually threaten to exercise their voting rights; and a reasonably active market for corporate control. Without passing judgment on the sufficiency of any of these in the world of corporations—each is contestable there as well, as the contemporary corporate law literature points out—the simple fact is that none even arguably operates with any power in the world of mutual funds. Because mutual funds are not traded in an organized market, arbitrage opportunities cannot work to keep prices in line with rational expectations. Mutual fund prices are simply the product of net asset value at the time of purchase or redemption. Insider compensation is largely based on assets as well, which creates the conflict rather than aligns insider-shareholder interests, and directors are typically paid all or mostly in cash. Institutional shareholder voice does not exist in the fund area, and there is no external market for corporate control at all because shareholders can only sell their shares back to the fund. Thinking about mutual funds by imagining them simply as a species of “corporations” in a way that is directly informed by contemporary corporate law theory is completely misguided.

Is Say on Pay Justified?

A PDF of my paper,Is 'Say on Pay' Justified?, as published in Regulation, Vol. 32, No. 1, pp. 42-47, Spring 2009, is now available for downloading from SSRN.

Abstract:

There is growing political support for adopting a 'Say on Pay' requirement for executive compensation - that is, shareholders must sign off on executive compensation. This paper examines three premises fundamental to the 'Say on Pay; movement: that current executive compensation is unjustifiably high, that federal legislation is required to address that high compensation, and that federal legislation would be effective in this aim. The paper finds that all three claims are problematic.

Keywords: federalism, say on pay, h.r. 1257, executive compensation, corporate governance, principal-agent dilemma, director primacy, shareholder activism

Meet the Newest Bainbridge

We adopted Bella (9 month old standard poodle) this weekend. She's already settling in quite nicely:

She and Toby have really hit it off:

Ridge Geyserville (Sonoma County) 2003

Although bottled as a proprietary red wine, the 2003 Geyserville qualified for varietal labeling as a Zinfandel (albeit just barely), being a blend of 76% Zinfandel, 18% Carignane, and 6% Petite Sirah. I liked it a lot, especially with a fairly spicy fajitas dinner. Big wild berry flavors and aromas. There are some interesting spice flavors on the finish, as well. This is a balanced and harmonious wine that lacks the off flavors I found in Ridge Zins from, say, 2000 or 2002. It's not going to last much longer, so drink up. Grade: B+

Rick Perlstein's Asinine Take on the Health Care Town Yells

I kind of like what our friends at RSU call the health care town yells. They're speaking truth to power, while--unlike left-liberal protests--not blocking traffic.

They're also generating an amusing amount of asinine wailing by left-liberal elites. Take, for example, Rick Perlstein's execrable column in the WaPo:

So the birthers, the anti-tax tea-partiers, the town hall hecklers -- these are "either" the genuine grass roots or evil conspirators staging scenes for YouTube? The quiver on the lips of the man pushing the wheelchair, the crazed risk of carrying a pistol around a president -- too heartfelt to be an act. The lockstep strangeness of the mad lies on the protesters' signs -- too uniform to be spontaneous. They are both. If you don't understand that any moment of genuine political change always produces both, you can't understand America, where the crazy tree blooms in every moment of liberal ascendancy, and where elites exploit the crazy for their own narrow interests.

He concludes:

The various elements -- the liberal earnestly confused when rational dialogue won't hold sway; the anti-liberal rage at a world self-evidently out of joint; and, most of all, their mutual incomprehension -- sound as fresh as yesterday's news.

The classic liberal lie: "we lefties are rational, nice, kind people who are puzzled by conservative crazies. We've got no crazies on our side, of course. Just nice rational people like me."

Oh, yeah? How about:

1. The Weathermen: "With a charismatic[3] and articulate[4] leadership whose revolutionary positions were characterized by anti-imperialist, feminist, and Black liberationist rhetoric,[2] the group conducted a campaign of bombings through the mid-1970s, including aiding the jailbreak and escape of Timothy Leary. The "Days of Rage," their first public demonstration on October 8, 1969, was a riot in Chicago timed to coincide with the trial of the Chicago Seven. In 1970 the group issued a "Declaration of a State of War" against the United States government, under the name "Weather Underground Organization" (WUO)."
2. Act Up: "In December 1989, approximately 4,500 protestors arrived at St. Patrick's Cathedral during Mass in a demonstration directed toward the Roman Catholic Archdiocese's public stand against AIDS education and condom distribution, as well as its opposition to abortion.[12] One-hundred and eleven protesters were arrested. Camille Paglia wrote in a December 2008 Salon column that a consecrated Host was desecrated by a protester, an act considered by Catholics to be blasphemous and an outrage."
3. The SEIU: ""The violence in Michigan and the specific targeting of women labor leaders is reprehensible and should have no place in our labor movement or our country," said Rose Ann DeMoro, executive director of CNA/NNOC. "For Andy Stern to direct this attack and its cover up is abusive, immoral, and unacceptable behavior. He demonstrates why RNs across the country want no part of an organization like seiu."
4. Code Pink: Blocking Marine recruiting stations, tying up traffic, disrupting Congressional hearings, and, worst of all, protesting outside Walter Reed Army Hospital.
5. ALF and ELF: Eco-terrorism, with numerous attacks on property, including those of many of my colleagues at UCLA
6. Unions: "The National Institute for Labor Relations Research has compiled a list of incidents of union violence that average nearly 300 per year for the last 30 years."
7. The people who forged Bush's supposed National Guard records. 
8. And that's just what I came up with off the top of my head... 

  As for astroturfing, that's clearly happening:

While President Obama has focused attention on "special interests" that are mobilizing to try to defeat his health-care plan, the liberal group MoveOn.org is trying to mobilize people to attend congressional town hall meetings to push for the plan, and especially to push for a government-run “public option” insurance program.
MoveOn.org is even suggesting brief statements people can make in favor of a “public option” health care plan if they attend a town hall, and gives people the opportunity to download signs indicating their approval of the "public option" that they can print and carry into the meetings.

And so I have a word of advice for Perlstein:

You hypocrite, first take the plank out of your own eye, and then you will see clearly to remove the speck from your brother's eye.

Read before commenting: Let me remind you that the comments block clearly states: "Comments are moderated, and will not appear until the author has approved them." This means your comments will not appear instantaneously. Instead, they will be approved the next time I log on the computer, assuming there is nothing profane, obscene, racist, or libelous in the comment. If I'm walking my dogs, or cooking supper, or taking a nap, there may well be a delay. It might be an extensive delay. But, to paraphrase Ronald Reagan, I own this microphone. I work for me, not for commenters. Complaining that your precious comment wasn't posted within six minutes thus is just silly.

RSU on the Health Care Town Hall Yell Meeting

As always, Jackie and Dunlap capture the absurdity of the moment:

Smith-Madrone Spring Mountain District Cabernet Sauvignon (Napa Valley ) 2004

When first opened, this Smith-Madrone was closed and thin. But red wines at age 5 are often in a dumb stage, so I double decanted it and let it breathe for about 45 minutes. The wine now offered up a sweet bouquet of dark berries, oak, and herbs, along with a whiff of bell pepper. The attack has good forward fruit, bracing acidity, and fairly firm tannins. It needs some time in the cellar to soften and evolve, but has a lot of promise for the future. Grade: A-

Would a loving God create Tarantula Wasps?

Tom Smith (with relevant video):

These creatures sting spiders, paralyze them, carry off the still living bodies, lay an egg on them, which hatches into a larvae, which then eats the paralyzed spider alive, avoiding key body systems so as to make sure it stays alive until the last possible moment.  You really have to hope spiders have no awareness, or else that they are reincarnated Nazis or something.  As I have said before, Darwin apparently found the existence of God and parasitoid wasps incompatible.  An alternative that worries me sometimes is that God did create parasitoid wasps and thinks they're really cool.

It's not clear to me why the existence of parasites poses a novel problem. To the contrary, the questions Tom poses strike me as being wrapped up in the broader problem of theodicy. Indeed, all three of the main monotheistic religions have struggled with the paradox of a good God and an evil world.

To be sure, there's an argument that animal suffering is a particularly serious theological problem. In The Problem of Pain, C.S. Lewis contended that "The problem of animal suffering is appalling; not because the animals are so numerous. . . but because the Christian explanation of human pain cannot be extended to animal pain. So far as we know beasts are incapable either of sin or virtue: therefore they can neither deserve pain nor be improved by it." Lewis went on to develop a complex and nuanced theology of animal pain, which is well treated in this article.

At the end of the day, however, it matters not which form of evil you chose to focus on. The problem of pain is either an obstacle to faith or not. Much has been written to try to explain why one should come down on one side or the other of that fence. But if you were to read just one thing on theodicy, might I suggest The Problem of Pain?

Counterparty Liability

Interesting analysis at CFO.com of Senator Specter's effort to overturn Stoneridge and thereby massively increase the scope of securities fraud liability:

Regulators and lawmakers are trying to widen the net of securities-fraud liability. If they're successful, more companies could be ensnared in private litigation because of their business partnerships with fraudulent companies. ...
... opponents of Specter's legislation, including the U.S. Chamber of Commerce, are using the current economic downturn to blunt interest in changes to existing rules. "Specter's bill would once again throw American business to the trial lawyer wolves, weakening our competitive position, at a time when our economy needs all the help it can get," wrote Stephen Bainbridge, a law professor at the University of California, in a recent blog post. He has said that an expanded interpretation of the law could force companies to extend the monitoring of their internal controls to those of their vendors and other business partners.

"Unlike French wine, fraud cases don’t get better with age"

Peter Henning has a very nice analysis of the SEC's settlement with former AIG head honcho Hank Greenberg, in which he explains why the long running saga is now highly unlikely to result in serious penalties for Greenberg.

Under the settlement, Greenberg faces only controlling person liability. He will not be charged with personal misconduct. In light of the SEC's pending SOX Section 304 clawback case against Maynard Jenkins, about which I blogged earlier, the SEC could have gone after Greenberg's incentive compensation under 304 even though it didn't charge him with personal misconduct. One is left to wonder why they went after Jenkins and not Greenberg. (Presumably, there's a statute of limitations on 304 clawback suits, but I'm unaware of one.) Did the SEC threaten to use section 304 as a way of inducing Greenberg to settle? Or did they fear Greenberg would fight back too capably?

Does Obama have a rabbit?

Carl Sandberg once said that "A politician should have three hats. One for throwing into the ring, one for talking through, and one for pulling rabbits out of if elected." Obama's got the first two, let's see if he got's the third.

If Dorothy Rabinowitz's right, there is no rabbit:

The president has a problem. For, despite a great election victory, Mr. Obama, it becomes ever clearer, knows little about Americans. He knows the crowds—he is at home with those. He is a stranger to the country’s heart and character.

He seems unable to grasp what runs counter to its nature. That Americans don’t take well, for instance, to bullying, especially of the moralizing kind, implicit in those speeches on health care for everybody. Neither do they wish to be taken where they don’t know they want to go and being told it’s good for them.

Who would have believed that this politician celebrated, above all, for his eloquence and capacity to connect with voters would end up as president proving so profoundly tone deaf? A great many people is the answer—the same who listened to those speeches of his during the campaign, searching for their meaning.