Terra Extraneus

Not one — but two! — blog sightings of Rod Heggy, right here at TerraX. Rod was away on a two-week vacation, and then, immediately after his return from vacation, back out of state on business. At least that’s the official story. I was beginning to wonder if he had actually been taken hostage. But I discern by his posts earlier today that he is back home and back in the blogosphere. Very glad for that — I would hate to have to start passing the hat to raise a ransom. Good to have you back, brother.

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Recent commentators, including my own erstwhile colleague, have noted President Bush’s appendage to bills signed into law, recently called “signing statements,” some of which written by President Bush are critical of the scope or reach of the law. Terry noted the ABA’s report on it. Terry’s comment was picked up by a prestigious national commentator.

However, regarding the whole controversy, I’m still searching for the materiality of the dispute. Can anyone cite a single instance in which the President or the Executive Branch violated a law based on a “bill signing statement?” Can anyone point to a single court that accepted the “bill signing statement” as part of the legislative history? Can anyone point to a single court that accepted the “bill signing statement” as the lawful basis for interpretation of the statute so passed, much less a constitutional challenge?

A “bill signing statement” is no more than a historical artifact in most instances, and it has never been used, successfully or otherwise, as determinative of policy insofar as I have ever heard or been made aware. They are printed in the Federal Register so they are publicly available for all eternity and can be debated by anyone that wants to do so.

This is hardly different than when Congressmen, regardless of partisan disposition, include criticisms of proposed statutes in the legislative history during hearings held on the statute, as part of floor debate, or simply as a unilateral insertion by a congressman in the Congressional Record. Lastly, at the most, it is a forum used by a President under the protection of the First Amendment, and has no more weight than a press release from the White House.

The practice has expanded under the present Bush presidency but it was not invented in this administration. Thus, why didn’t the American Bar Association leap onto the practice before now, or when it was used in prior administrations? I resigned from the American Bar Association for exactly this sort of nonsense, coupled with its then express advocacy of abortion upon demand and other forms of murder, without real consultation with the paying ABA membership. The ABA is once again wasting its resources and everyone’s time. In this instance, there is simply no issue.

There have been a number of “reservations” expressed by the nations chief executives to new laws. President Nixon used “impoundments” to try and control the spending of what he viewed was a runaway Congress. Congress would pass a law and a budget and Nixon simply refused to spend some or all of the money Congress allocated. It gave him a form of line item veto he used in an effort to control federal deficits. Also, because it was not an actual “veto,” it avoided Congressional overrides. My recollection is that Arthur Schlesinger’s book, The Imperial Presidency, had an excellent summary of “impoundments, but I no longer seem to have a copy of it at hand, and would hope to be corrected if I have erred in this citation, but my recollections of “impoundments” is, I am sure, correct. What the present Presidency is doing is a far cry from that and impoundments actually did raise a real spectre regarding separation of powers that the mere talk included in a “signing statement” simply does not. It would be interesting to compare the ABA’s “report” on impoundments, if there was one, to its report on “signing statements,” and see which contains the most lurid language. A political fingerprint might have been left behind, and for the ABA, that would not be surprising or beneath them.

Moreover, federal agencies of the Executive Branch are given deference by courts in the interpretation of the statutes of which they are responsible for enforcement. However, deference does not mean abdication, and courts are not hesitant about overriding federal agency statutory interpretation that is wrong or twisted. A presidential “signing statement” is no more important than a federal agency interpretation and would not cause any greater furor during enforcement of a statute.

Any academician responsibly reviewing the impact of “signing statements” would have to compare them to “impoundments,” federal agency statutory interpretation, and White House press releases to determine if there is in the differences any difference.

The ABA is angry because the Bush Administration gives little credence to ABA certifications of the qualifications of presidential federal judicial appointments. The ABA is a private lobbying organization and an inferior one, in my view, to others, such as the American Center for Law & Justice. If the ACLJ, or a similar organization, were to develop a “membership” of attorneys in addition to its donative supporters, it would one day, I am sure, rival the ABA as spokesman for the nations attorneys. Thus, the ABA has no special right to be acknowledged on judicial appointments or anything.

The ABA has a large paying membership, 410,000 according to the AP’s Gina Holland, largely because law firms and corporations pay the dues for employed attorneys. Although, 410,000 is not much more than 10% of the nations attorneys and indicates the ABA’s slipping influence in the legal community. The membership would shrivel if attorneys had to pay the dues themselves, much less if attorneys took a hard look at the advocacy of the organization. I resigned from the ABA while I was an employee attorney and had a law firm paying the dues for me, simply because the ABA’s stance on moral issues, in my view, was inconsistent and in too many cases, contrary to my moral beliefs. It is unlikely the report noted by Terry was any more representative of the feelings of the paying ABA membership.

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The NASD, according to the magazine On Wall Street, has brought 280 disciplinary actions in the last five years. Recently, an NASD arbitration panel awarded $22 million to 32 chemical plant workers employed by ExxonMobil. Thus, it seems that variable annuities have been the tool of fraud in a small number of cases. Because there are over a trillion dollars in variable annuities, I truthfully conclude abuses are limited.

Oddly enough, one of the better critiques of consumer investment vehicles I’ve seen is in a magazine distributed solely to financial industry professionals, On Wall Street. But, the article is freely available on line. Every non-professional investor, and maybe a few registered representatives, should read this article. The National Association of Securities Dealers, Inc. also has lots of investor advice for free regarding annuities and it should be consulted for updated warnings before any purchase.

So, what is this all about? In the last decade or so, the alliance of insurance products and securities has added some tools to the array available to financial planners and financial products salesmen. One of these is the old family of products known as the annuity, but the updated versions of this product include the variable annuity and the index annuity. An annuity was an insurance product by which an investor deposited a lump sum or series of lump sums with an insurance company. The insurance company then promised to pay, regardless of future economics, on a monthly, quarterly or some other basis a stream of income, typically for the life of the investor and/or the investor’s spouse. It was a great thrift vehicle and a great guaranteed return. But, the explosion of wealth in the US, and its parallel explosion of value in the equity (stocks and bonds) markets out stripped the return on investment offered in annuities.

The variable annuity updated the concept by relying on equity market performance rather than insurance company performance. The money invested is, mostly, invested in mutual funds that in turn invest in stocks, bonds, and other financial products. The variable annuity holds the underlying investments on a tax deferred basis, and can even wrap the investment in life insurance that prevents heirs from inheriting less than invested even if market losses reduce the value of the annuity investments.

But, there are abuses, and investors should know about them so that intelligent investment decisions can be made, and so that a valuable tool, like variable annuities, need not be over regulated or abandoned.

The problem with insurance products generally, and variable annuities specifically, is that the expenses, fees and hidden costs (hidden to consumers, at least) are sometimes too high to allow the annuity to earn enough over time to compete with other products. A few financial advisors are too tempted by the high commissions these products pay to use the products only when the costs are justified. Also, these products suffer from historical insurance industry baggage, such as the refusal of the insurance company to spend the money to supervise the sales forces that sell these products, and that lack of oversight is expressed in lengthy and high surrender charges which deter customers from waking up, exiting the product and leaving the insurance carrier to recover the commissions paid to the salesman.

The worst problem is that the insurance industry and the securities industry, which are both by law charged with the duty to supervise the salesmen, do not always monitor the underlying investments in the variable annuities. So, there is too little account rebalancing, risk monitoring, or review of the performance to identify mutual funds that are no longer suitable for the portfolio. Also, many investors think the salesman that sold them the annuity has some special expertise, some do and some do not, and that the salesman is monitoring the underlying investments. Unfortunately, while most do monitor their clients’ investments, too many do not, and the losses arising from that small percentage of salesmen, that group that are not really financial advisors, is large enough to create regulatory concern and media interest. It has employed a few lawyers, too.

Indeed, the article in On Wall Street recites that the arbitration award in favor of the chemical workers, noted above, was largely based on the finding that the broker –dealer did not have in place a system to monitor the securities trading in the underlying accounts within the variable annuities. Given that many of the customers are elderly, retirees and nearly all of them are unsophisticated investors, the absence of monitoring of the securities investments in the underlying accounts within the variable annuities is unforgivable. The lack of transparency in costs is regrettable, too. Long surrender periods should not be imposed on anyone already aged more than 55 or 60 years, and commissions on products sold to older persons should be adjusted accordingly. The insurance industry will no doubt adopt a bunch of form admissions for the hapless consumer to sign but that is not enough protection, and they know it. Sadly, because the tort system has been largely gutted, the insurance industry and the securities industry will only address these problems if forced to do so by regulatory agencies.

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Several months ago I launched a project to survey the 300+ blogs listed on the Blog Oklahoma blogroll. I set out alphabetically, and so far I have reviewed Sooner blogs from A to D. (Click the “Blogs: Oklahoma” category button for those reviews). At this rate, I won’t finish this project until well into the next decade.

One blog that has an obvious Sooner state connection that I see mentioned frequently on other blogs is Okiedoke. I decided to skip a few letters to find out what Okiedoke is all about.

Okiedoke (not Okiedokie) is written by Mike Hermes of Little Axe, Oklahoma. From its name, I was guessing Little Axe was deep in the Kiamichis of southeast Oklahoma. Actually, Little Axe is just 20 miles east of Norman on the eastern bank of Lake Thunderbird, out on the farthest fringe of the OKC metro area.

Like his friend over at Dustbury, Hermes is a prolific writer, cranking out about 70 posts a month. Archives go back to Dec 2003, although Hermes says Okiedoke began in July 2003. I read the last three months’ worth (that’s a lot of reading!).

Unlike Terra Extraneus and most other Oklahoma blogs, Okiedoke is actually primarily about Oklahoma, especially Oklahoma politics. In addition to his blog posts, Hermes throws in several bells and whistles which elevate his blog a few cuts above the rest:
• He maintains a helpful list of links to other Oklahoma-related sites.
• He provides an updated list of 2006 Oklahoma political candidates.
• He offers the “Oklahoma Election Propaganda Collection 2006,” featuring recent political TV ads and flyers.

In addition to writing his own Oklahoma blog, Hermes has volunteered himself to promote Sooner State blogging in other ways:
• He is the founder of the Okie Blog Awards, which named its first roll of best blogs in 2005 and is set for another round on Sep. 23, 2006.
• He is the ramrod behind the Okie Blogger Roundup, which will occur for the first time this year in Bricktown on the same September date.
• Hermes publishes his own weekly review of Oklahoma blogs, the “Okie Roundup,” every Saturday.

Politically, Hermes is a registered independent. His politics lean a bit to the left (something I’ve also been accused of), although Hermes denies it. (more…)

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Traffic to TerraX is way up today. What’s the occasion? Slate, the online magazine owned by the Washington Post, quoted me in an article about President Bush’s bill-signing statements. Here’s the Slate article, “Attorneys Against Bush”; TerraX is mentioned in the fourth paragraph. The article references my post yesterday: “Bar Association Slams Bush for Disregard of Law.”

Funny that Slate references the “liberal-leaning Terra Extraneus.” A glance at our featured articles at the top of the homepage shows we may lean left on immigration and government assistance programs, but are right as rain on abortion, for example. A more thorough reading of our blog would confirm what we say on our “About” page: “Don’t be too quick to pigeonhole our politics.”

However, in the modern political discussion, there are only two categories, red and blue, conservative and liberal, and doggonit, we’re going to shove you into one category or the other, whether you like it or not. See: “Which Political Category Should We Shove You Into?” See also, “Confessions of a Liberal, err, Left-of-Center Idealist.”

Oh well, as they say, all publicity is good publicity. And they spelled my name right. I’d be much more cool and much less honest if didn’t admit that being quoted in a national publication made my day.

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World Trade Center, a movie about the 9/11 attack, opens Wednesday, Aug. 9. Directed by controversial filmmaker Oliver Stone, the movie is already getting rave reviews and Oscar buzz, more than two weeks before opening night.

Stone loves to make movies which address modern history: from the Vietnam war (Platoon, 1986, and Born on the Fourth of July, 1989) to JFK (1991) and Nixon (1995). Stone has won three Oscars: two for best director (Platoon and Fourth of July) and one for best screenplay (Midnight Express). His last film, Alexander (2004), was his biggest flop, grossing just $34 million despite the all-star cast of Colin Farrell, Anthony Hopkins and Angelina Jolie.

Many people have expressed concern about trusting the controversial Stone with the delicate subject of 9/11. The filmmaker has made no secret of his ultra-liberal views. He has lauded Fidel Castro as being “one of the Earth’s wisest people,” and he has credited LSD and peyote as fueling his creative process.

Nevertheless, surprisingly, the film is getting raves from some uexpected corners. Cal Thomas, the conservative Christian columnist, after an advance screening, wrote:

It is one of the greatest pro-American, pro-family, pro-faith, pro-male, flag-waving, God Bless America films you will ever see.

Nicholas Cage leads the cast of World Trade Center. The movie tells the true story of Port Authority police officers who go to the rescue of Trade Center victims and become trapped in the rubble themselves. The movie’s official website is here.

We haven’t had any truly great movies so far in 2006, and quite a few disappointments (e.g., The Da Vinci Code, Superman Returns). I don’t know anything about Cal Thomas’ taste in films – but I hope WTC is at least half as good as Thomas says it is.

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Some good tips here on how to get your MIT (most important tasks) done each day, how to keep email from dominating your work schedule, and how to get out of the office on time at the end of the day. (Hat Tip to Law Practice Tips).

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My preceding post (“Bush Criticized for Disregard of Law”) mentions a report issued yesterday by a 10-member task force of the American Bar Association. One member of that panel is former Congressman Mickey Edwards.

Edwards is a familiar name to Oklahomans. Edwards, a Republican, served as U.S. representative of the 5th District (OKC area) from 1977-1993 and now is a professor at Princeton University. Edwards has served as president of the American Conservative Union and is a founding trustee of the Heritage Foundation. Edwards has been a frequent critic of the Bush administration. When even people with his conservative credentials say the president has gone too far in defying our democratic system, it’s time for the American people to start listening.

Here is an opinion piece from Edwards, published last week on The Huffington Post (a left-wing and usually snide blog headed by Ariana Huffington, which I do not mean to endorse by referencing here). Edwards’ piece is titled, “The Erosion of American Constitutional Principle.” Edwards writes:

The presidential signing statement [is] a relatively innocuous tradition which has, in this President’s hands, been transformed into a dagger ripping at the heart of America’s central governing principle: separated (and thus constrained) power.

In his essay, Edwards’ primary concern is worth pondering long and hard. He warns that the power President Bush usurps for the executive branch today is the same power some future president will use in ways we cannot foresee.

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The American Bar Association issued a report yesterday criticizing President Bush for attaching bill-signing statements to more than 750 laws during his presidency. Presidents attach such statements to bills when they sign them into law to declare that the president questions the law on constitutional or national security grounds. Bill-signing statements are nothing new, but President Bush has attached more such statements than all 42 previous presidents combined, and has operated as if such statements give him a pass to disregard the very laws he signs.

Says ABA president Michael Greco:

This report raises serious concerns crucial to the survival of our democracy. If left unchecked, the president’s practice does grave harm to the (doctrine of the) separation of powers and the system of checks and balances that have sustained our democracy for more than two centuries.

The president’s spokesman has responded to such criticism by defending the practice of signing statements. But the practice is not what is at question, but Bush’s prolific and manipulative use of it. Lawmakers have pointed out the obvious connection between the President’s little use of his veto power and his broad use of signing statements. The president’s recent veto of the embryonic stem cell research bill was the first veto of his presidency.

When the president vetoes a bill, with sufficient votes the Congress can override his veto. By signing bills into law but stating upfront that he has no intention of obeying them, the president avoids confrontation and political embarrassment, and then just does whatever he chooses. In other words, this president, more than any other in our history, believes that he is above the law.

Sen Arlen Specter (R-Penn.) says he will introduce a bill by the end of this week which would empower Congress to sue the president in federal court to challenge bill-signing statments.

The ABA report was prepared by a 10-member task force which includes former FBI director William Sessions and former Congressman Mickey Edwards. The ABA report is available here.

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Thanks to Dustbury for referencing this post at Outside the Beltway: “Getting Your Blog Noticed.” OTB editor-writer James Joyner says to have a successful blog, you must put up a minimum of 40 posts a week:

The key is content, content, content. Unless you’re doing Lileks- or Wretchard length essays, it’s almost impossible to get steady traffic without posting 40-50 items a week at minimum. There are just too many sites competing for eyeballs for large numbers of people to make your site a daily stop unless you’re giving them something to read when they get there. People who write quickly, prolifically, and about interesting things at least have a chance of breaking out of the pack. It’s not coincidental that most of the top bloggers are college professors, journalists, or self-employed. Unless you have the ability to blog during the day (or the discipline to get up early crank out several posts before going to work a la Ed Morrissey) you’re at a distinct disadvantage.

Joyner has the credentials to make such a pontification. His blog, written by him and eight others, has more than 20,000 visitors a day.

Jon Swift is a notable exception to the rule. He gets more than 1,000 visitors daily, writing no more than three or four posts a week. (See our review of Jon Swift).

Charles at Dustbury says he’s hitting close to the 40 posts/week mark, and he has more than 800 visitors a day to show for it. Few bloggers, however, have the time to crank out that much material and maintain any level of quality. If Joyner is right, the real truth behind his observation is that it requires a team of talented writers to create a successful blog. Terra Extraneus is currently a two-person operation. If the right person were to come along, we might add a third writer to the mix. But it would have to be the right person.

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