Reining In Excessive Fines

Yesterday the Supreme Court ruled that the Eighth Amendment to the U.S. Constitution — which states that “[e]xcessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted” — imposes limits on the abilities of state and local governments to seize assets and property and impose financial penalties.  And the Court’s ruling applying the “excessive fines” clause of the amendment to state and local governments was a unanimous one, which is a welcome development in our era of increasingly divided politics.

gettyimages-1066751830The case involved an Indiana man who was arrested for selling several hundred dollars’ worth of heroin, had his $42,000 Range Rover seized as part of the process — even though the maximum fine for his crime was $10,000 — and sued to get his car back.  The Indiana Supreme Court ruled that the “excessive fines” clause of the Eighth Amendment did not apply to the states, even though the “excessive bail” and “cruel and unusual punishment” clauses have long been applied to the states.  The Supreme Court, in an opinion written by Justice Ruth Bader Ginsburg, disagreed.

The decision yesterday addresses a significant real world issue — namely, how far can states and local governments go in imposing monetary penalties and seizing property from people who violate the law . . . or, in some cases, are only accused of violating the law.  Because raising taxes isn’t popular with voters, state and local governments have increasingly looked to aggressive forfeiture practices to fund part of their operations.  Briefs filed in the Supreme Court noted that more than half of municipal and county agencies who participated in a survey said reliance on forfeiture profits was a “necessary” part of their budgets, and that, in 2017, 10 million people owed more than $50 billion in criminal fines, fees and forfeitures. And the aggressive penalties aren’t limited to drug offenses.  One brief in the Supreme Court, for example, described how a $100 ticket for a red-light violation in California results in another $390 in fees.

In holding that the excessive fines clause applies to the states and local governments, Justice Ginsberg noted that “[e]xorbitant tolls undermine other constitutional liberties,” and added:  “Excessive fines can be used, for example, to retaliate against or chill the speech of political enemies. . . . Even absent a political motive, fines may be employed in a measure out of accord with the penal goals of retribution and deterrence.”

Now that the states know that they can’t impose excessive fines, it will be up to the courts to determine whether the aggressive property forfeiture and fining practices, like the seizure of the Range Rover, are “excessive” or not.  We’ll have to see how that works out, but for now it’s nice to know that Americans have another constitutional protection against potentially overreaching governmental actions.

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Cannabusiness

Cannabis sativa — the name of the plant species that includes marijuana and industrial hemp — seems to have gone mainstream in modern America.

When I was walking through LaGuardia Airport last week for my flight back to Columbus, I passed a shop that featured the above advertisement for cannabis sativa seed oil, as an “herbal fix for problem skin” with “100% naturally derived ingredients.”  And Kish and I have been to parties where people our age have knowledgeably and seriously discussed the claimed health benefits of cannabis-infused oils and creams for conditions like sore shoulders and aching backs.  For years, people who have pushed for legalization have claimed that the plant could produce many different types of useful products — and now it seems those claims are being realized.

If cannabis products are being accepted by the masses for skin care and health care purposes, it’s a pretty good indicator that cannabis has become big business.  In America, there aren’t many product areas that are bigger than skin care and health care.

The Last Cookie Code

Yesterday someone left a deli tray of several dozen cookies by the coffee station on our floor. Within a few minutes the first cookie locusts had descended, the office grapevine communications network had sent out word far and wide that cookies were on the fifth floor, and after an hour or so all but one cookie was gone.

But that one cookie was a holdout. It sat, alone, on the black plastic tray for hours. It made it past lunchtime and endured well into the afternoon. Finally, as the end of the workday neared, some ravenous soul who could bear it no longer gobbled it down, and the last cookie vanished from our sight.

There’s a curious code of honor that prevails when cookies, brownies, or other baked goods or sweets are left near an office coffee station.  When the plate of goodies is full, workers have no hesitation about taking one, or two, or even three of the items — hopefully, without anyone else seeing that they are doing so.  But when the plate gets down to the last cookie, a different rule prevails.  There is tremendous hesitation about taking the last cookie and leaving an empty plate behind.  Perhaps it is the pain of a possible guilty conscience, or a feeling of goodwill toward co-workers who might not have had a cookie already and might want one in the future.  But the last cookie code acts to restrain the final act of gluttony.  In some cases, people who can’t resist will actually break the last cookie in half, or into quarters, and only take a piece so that there is at least some fraction still on the plate.  By leaving the remains of a broken cookie, their conscience is clear.

The code of the last cookie is strongest early in the day, when it first becomes apparent that there is only one cookie left.  As the workday wears on, rationalizations erode the force of the last cookie code.  After all, it’s 3 p.m., and nobody else has taken it.  If someone had wanted it, they would have eaten it by now.  It would be unfortunate to let perfectly good food go to waste, too.  And why should the cleaning crew get stuck with more work?

So the last cookie gets taken, the plastic deli tray gets quickly pitched, and the coffee station counter is once again clean.  Although the last cookie code has had its impact, the last cookie is now gone, and all’s right with the world.

Realtors And Guns

The next time you go to an open house for a house for sale, bear this in mind:  that chatty, hyper-friendly realtor who encourages you to take an information sheet about the home might just be packing a sidearm under their blazer.

Woman Pulls A Gun From Her Swanky Purse. Conceal Carry Weapon FoA recent survey by the National Association of Realtors found that 1 in 6 realtors state that they carry a gun on the job.  Why?  Because being a realtor has become an increasingly dangerous job in our increasingly dangerous world.  Non-realtors like me don’t focus on the risks, but they’re pretty apparent when you think about what realtors do.  They typically work alone.  They make appointments and meet with potential clients who are total strangers that might potentially want to rob them or otherwise do them harm.  And they regularly go into darkened, empty houses where an unknown home invader might be lurking.  In short, being a realtor doesn’t just require a gift of gab and sales skills, it also requires a considerable bit of intestinal fortitude, too.  Not many of us have jobs that require us to regularly go alone into strange houses where we might encounter unknown people with unknown intentions.

The statistics bear out the risks that realtors face.  A 2018 NAR study found that 33 percent of the realtors surveyed had experienced a situation that made them fear for their safety, and five percent responded that they had been the victim of a crime a work.  And, as the article linked above shows, in some cases realtors have been the victims of assaults, armed robberies, and even abduction, kidnapping, and murder.  That’s one reason why the NAR has stepped up education and training efforts to try to help realtors deal with the risks.  And it’s why an increasing number of realtors have decided that, for their own safety, it makes sense to bring along a weapon when they are going on the job.

I think being a realtor would be a tough gig for a lot of reasons.  You’re going to be dealing with a lot of people who really aren’t serious buyers and ultimately are just wasting your time, and you’ve got to be enthusiastic and pleasant whenever you’re with a client, which must be exhausting.  The personal safety risk just makes the realtor role more difficult.  If I had a job where I thought I needed to cary a gun to be safe, I think I’d look for another job.  But I also think this:  I’ll never again wonder about whether realtors really earn that commission when a house is bought and sold.

Encouraging Airplane Creepiness

Airplanes are, by definition, strange places.  You’re placed in a metal tube, sitting cheek by jowl with a bunch of unknown people, and the only thing you’ve got in common with them is that, at that particular time on that particular day, you’re taking that flight to get from point A to point B.  Your fellow passengers, for the most part, are probably reasonably decent, up-standing, law-abiding folks, but you never know — they could cover the spectrum from kindly, doddering grandparents to budding serial killers.

delta-coke-napkins-915Most air travelers, me included, are just grateful when the flight ends without incident and they can get out and get on with their life without further ado.  And here’s how you know that that is the prevailing sentiment of virtually everyone — at the end of your next flight, watch how many people dawdle to continue their conversations with the person in the next seat over, and how many grab their carry-ons at the maximum possible speed and hightail it out of there.  You can also reflect upon how many deep friendships you’ve made with random people you’ve met on an airline flight.

So how in the world did Delta and Diet Coke think that it would be a good idea to distribute drink napkins with messages that encouraged passengers to try to connect with other passengers?  The napkins carried weird messages like “Be a little old school. Write down your number and give it to your plane crush. You never know…” and had places for passengers to write down their names and telephone numbers to give to their “plane crush.”  Another napkin’s message was:  “Because you’re on a plane full of interesting people and hey… you never know.”

Gee, what could go wrong with encouraging passengers to even think about another passenger as a “plane crush”?  And what could be creepier than getting a napkin with somebody’s name and phone number on it, knowing that, after the flight is ended and you’re deposited in a strange city, the total stranger who had it handed to you might want to interact and see if you’re interested in something more?  And, possibly, be upset if you aren’t and ready to stalk you to the end of your days?

After passengers commented on the obvious creepiness, Delta and Coke apologized and have withdrawn the napkins.  But it really makes you wonder:  what process is used in vetting airplane napkins, and who in the world was responsible for coming up with the napkin text and approving it?  Doesn’t Delta have any idea that 99.9% of its passengers don’t view airplane flights as a great opportunity for flirting?

40 Years Of 401(k)

Last year, 401(k) employee retirement savings plans hit a venerable milestone — the 40th anniversary of their creation.  401(k) plans were born during the Carter presidency, with the passage of the Revenue Act of 1978, which established Section 401 of the Internal Revenue Code.

stk27434sigThe language of the statute is the dense, definition-filled content that tax lawyers love, but the concept of the 401(k) is simple:  workers can salt pre-tax money away in protected funds and invest it, thereby enjoying some tax savings and having a vehicle to save for retirement.  Many employers offer 401(k) plans as a part of their benefit package and facilitate the program through payroll deductions.  According to the Investment Company Institute, in 2016 there were almost 555,000 401(k) plans in the U.S. and more than 55 million Americans were active participants.  The ICI also reports that, as of the end of the third quarter of 2018, 401(k) plans held $5.6 trillion in assets — up from $2.2 trillion in 2008 — and represented 19 percent of the total amount of U.S. retirement assets.

Some people raise questions about the 401(k) option, arguing that its availability has helped to produce the virtual disappearance of employer-funded pension plans, in which the employer totally funded the plan and, in many instance, provided the employee with a guaranteed retirement benefit.  I think that’s wishful thinking.  Even at the time the 1978 legislation was passed, many American companies were looking to cut costs, and guaranteed pension plans were disappearing into the mists of history.  Most of us have never worked for an employer that offered a true pension plan.  To be sure, 401(k) plans are based primarily on employee contributions, not employer largesse — although in many cases employers offer some kind of match to employee contributions.

Unless you’re an investment advisor who pines for the long-lost days of funded pension plans, though, you’re probably grateful that Congress was far-sighted enough to create the 401(k) option 40 years ago.  And it’s not hard to argue that 401(k) plans are, in some respects, superior to pension plans.  The 401(k) option gets the worker directly involved in her own retirement planning; employees have to elect to participate in the plan, after all, determine how their contributions will be invested, and then have their contribution withheld from their paychecks.  The 401(k) mechanism makes that as painless, relatively speaking, as withholding for federal and state taxes and Social Security contributions — because it comes out automatically, most people don’t notice it.  And then, after a few years, workers realize that they’ve actually made progress in starting to save for retirement, and for many people that realization opens the door to additional efforts to save, invest, and get ready for the retirement years.  The 401(k) option has made many Americans take personal responsibility for their own financial affairs, rather than relying on a company pension plan to do the trick.

And you can argue that 401(k)s have had a broader benefit, too.  So much automatic saving has to be invested somewhere — principally in the U.S. stock market.  In 1978 the Dow was well below 1,000; now it stands above 25,000.  No one would argue that 401(k) plans have been solely responsible for that run up, but there is no doubt that they have contributed to buy-side pressure that has helped to move the stock market averages upward, which has the incidental benefit of helping all of those 401(k) participants who’ve put their retirement savings into the market in the first place.

Happy anniversary, 401(k)!  Beneath that Tax Code jargon lurks an idea that has been helpful to millions of Americans.  I’d say we need to give credit where credit is due:  the 401(k) is one time when Congress did the job right.

Three Days In An Elevator

A New York woman who works for a couple that owns a five-story Manhattan townhouse walked into the elevator for the townhouse on Friday night.  The elevator got stuck, the couple was gone for the weekend, and the woman was trapped in the elevator for three days until she was rescued on Monday.

elevator-stuck.jpg.653x0_q80_crop-smartIt isn’t clear yet what caused the elevator to break down, or why it apparently wasn’t equipped with a call button that would allow the trapped woman to summon help.  She also apparently did not have a cell phone that could could have used for that purpose, either.

Unlike a prior incident of a person being trapped in an elevator for hours, there’s no video footage of the elevator interior that would show how the woman passed the time.  According to a report of the incident in the New York Times, the woman, whose name is Marites Fortaliza, was conscious and calm when she was finally removed from the elevator and taken to the hospital, and a relative of the townhouse owners who accompanied her to the hospital said she was “doing well.”  That probably means that Ms. Fortaliza had at least some water with her in the elevator, because three days without any water would run a serious risk of dehydration.

It probably also means that Ms. Fortaliza isn’t a claustrophobic, for whom three days trapped in a tiny, broken-down townhouse elevator would be one of the worst imaginable fates.  If you’ve ever been with someone with claustrophobic tendencies in an elevator that experiences any kind of unexpected pause, or bump, you have seen their look of abject terror at even the thought of being stuck in such a small space — and that’s in an elevator in a commercial building, which probably is larger than the elevator in a New York townhouse.  In fact, fear of being trapped in a stuck elevator must be pretty common, because a Google search yields lots of articles giving you instructions on what to do if it happens to you.  One thing is certain:  no claustrophobe would emerge from three days trapped in an elevator looking “calm.”

What’s your worst nightmare?  Whatever it is, remember — you should always keep your cell phone charged, and on your person.