Palin is the gift that keeps on giving.

From Palin's book:

He then launched into a discussion of nutrition physiology, holding forth on the importance of carbohydrates to cognitive connections and blah-blah-blah.

Whiskey Fire notes:

And in one sublime sentence, an agglomeration of comedy gold on the scale of Scrooge McDuck's money bin, in which Palin says Steve Schmidt is a dick for suggesting she can't make cognitive connections while making a cognitive connection with "blah-blah-blah," we discern the yawning abyss of stupid through which Sarah Palin stumbles as she fails at everything, I can't take any more, the end.

Palin is just fucking outstanding. More like this, please, GOP.

If conservatives are like a room full of 12 year-old remedial students, Allahpundit is an average 12 year-old. Quite a bit smarter than his peers, but still not terribly impressive in the grand scheme of things.

With that, check out his "expose" on how Stern has failed to register as a lobbyist despite not being require to.

Quoth the mediocre-intelligence blogger:

At 9 am ET today, Americans for Tax Reform and the Alliance for Worker Freedom will deliver a letter to both chambers of Congress and to US Attorney Channing Phillips in Washington DC, demanding a federal investigation of Andrew Stern, president of the SEIU. They will claim that Stern, who stopped registering as a federal lobbyist in 2007, has continued his lobbying efforts.

Shocking!

The relevant law here is 2 USC 1602(10), defining "lobbyist" as:

any individual who is employed or retained by a client for financial or other compensation for services that include more than one lobbying contact, other than an individual whose lobbying activities constitute less than 20 percent of the time engaged in the services provided by such individual to that client over a 3-month period.

According to the wizkids that Allahpundit cites, Stern spent a whopping 22 days lobbying Obama. So, in the parallel world where the earth orbits the sun in 110 days, Stern easily satisfies the definition of lobbyist. (assuming each visit was a whole day, which I'm sure the geniuses at Hot Air built into their model. I mean, you don't work for Michelle Malkin w/o being one smart cookie).

The Creepiness of the Conservative Base

So, it looks like Obama's step-aunt is in the country illegally. The generally sane blog Tigerhawk has conjured up an impressive mix of the very creepy and the very stupid.

First, the creepy:

How is he supposed to enforce our borders when his own kith and kin are illegals and he has done nothing about it?

Clearly, per Tigerhawk, people with illegal immigrant relatives have an affirmative duty to turn their relatives into the INS. Water is thicker than blood for conservatives, it seems. I'd advise getting far, far away from one's conservative family; there's no telling what they'll tattle about.

The stupid:

The problem, of course, is that this revelation would put Obama in a very difficult spot as president.

It does? The implication seems to be that presidents are in "very difficult spots as president" when they have personal interests in the outcome. The upshot: McCain would benefit - immensely - from the tax cuts he's proposing. Does that mean he has some inextricable conflict of interest that makes his judgment impossible to trust? His judgment is obviously untrustworthy, but it's not for that reason. Presidents make decisions on topics that impact them and their relatives all the time. Yet it's only in this context - the context of a black relative - that this issue is raised.

Pretty convenient. Oh, and fucking retarded.

Reforming the Reform: Sarbanes-Oxley Edition

On reread, this is an excruciatingly boring post.

Tigerhawk, who has been weirdly diligent in addressing the shortcomings and opportunity costs of SOX, notes that some Democrats (who are probably concentrated in NY and Conn.) are looking to reform the notoriously expensive SOX. The costs are so high, that it's probably driving corporations to list their stock on foreign exchanges, the most popular of which is the London Exchange.

Cutting to the chase: the first problem SOX was aimed at is management malfeasance, and to correct that, the law requires the CEO and CFO to personally vouch for the statements of financial position. Further, it creates civil and criminal liability for wrongly certifying certain statements about compliance with regulation. While there is a mens rea requirement (the false certification must be knowing or willful), even the risk of being unsuccessfully prosecuted is risk enough to register in a jurisdiction where, other things being equal, one doesn't assume that risk.

The real meat of SOX, though, is in section 404 of the law, which requires extensive testing of internal controls (internal controls are those procedures that aim at preventing error or fraud. An example would be managerial oversight of the person actually cutting the checks). This section is extraordinarily expensive and, as my colleagues tell me, also extraordinarily boring for the auditor. This is where I think SOX misses the boat. As I see it, the real problem that SOX should have aimed at isn't the dearth of internal control testing; in fact, an audit of entities that aren't covered by SOX generally has enough testing of internal controls to attest to the adequacy of internal controls. Section 404, then, provides a series of diminishing returns.

Instead, the real problem, in addition to executive malfeasance, is the cozy relationship between auditing firms and their clients. It's basic common sense that a firm has fairly strong incentives to avoid irking its clients, and this is exactly what caused Arthur Anderson to pass on correcting Enron's wildly dishonest accounting.

So how do we remedy this deleterious coziness?

One suggestion that's frequently floated is to require corporations to regularly rotate auditing firms. If you know you're not going to have a corp as a client in a few years, there's less reason to hide any shenanigans that may be found. But is that right? Well, it might be if not for the little fact that corporations share information with one another, and an auditing firm will have an incentive to create a "business-friendly" reputation. This is exacerbated by the fact that there are only a handful of auditing firms with the size and sophistication to audit corps that are big enough to be publicly traded. That means that the rotation is so small that a corp will inevitably end up with the same auditing firms over and over. In that environment with such fierce competition, a business-friendly reputation is of paramount importance.

What's SOX's answer? It created a quasi-governmental entity, the PCAOB, to oversee auditing firms. One of its more important roles is to, in effect, audit the auditors by reviewing the audit workpapers, the primary work product that forms the basis of the auditor's conclusions that the financial matters are accurately disclosed.

Here's where auditor sloppiness (if not abetting of fraud) comes into play. It can be very easy for an auditing firm to just say that it tested items thoroughly even if it didn't (this was a problem with Arthur Anderson's audits of Enron, for instance). If a firm did that, the PCAOB would be none the wiser after looking through the audit workpapers. Fixing that problem is simple: require auditing firms to provide evidence that they tested what they say they tested (if I say that a sample of checks were correctly written, to document that I'd actually stick copies of those checks into the workpapers). This would enable the PCAOB to, in effect, reaudit the corporation - this should enhance both the integrity of the corporation and the auditing firm by adding transparency to the relationship between the two.

Do this, eliminate Section 404 internal control testing, and the rest takes care of itself.

Are conservatives more generous? Devil, meet details

A while back, a study came out of a Massachusetts philanthropy organization purporting to show that red states were more generous than blue states. While the analysis seemed convincing at first glance, once the methodology was out in the open it became clear that it was deeply flawed. The best take down of the study was this post at Just One Minute.

Tom Maguire now points us to another study purporting to show that conservatives are more generous than liberals. And the devil may be in the details yet again.

Two points on which the analysis may get slippery: first, the definition of conservative. The reviews already note that the study's author seems to define conservative fairly narrowly (nuclear family, regular practicioner of relion - that "regular" may turn out to be important, as it could mean he's only talking about those people that attend church every single week. And that brings me to the next point.....).

Second, how is generosity being defined? Since he seems to be talking about church going conservatives, a substantial portion of the giving being factored into the analysis could very well be tithing. Tithing is, legally speaking, charitible giving, but the point of the study isn't to demonstrate that the church going conservatives get more itemized deductions, but that their actions are morally commendable, and moreso than liberals. So is tithing as morally commendable as giving to, say, a soup kitchen? I would argue that it isn't. Christians that give to the church of their choice derive a benefit from it. Without that tithing, the church of their choice would be out of business. Since church goers aren't coerced into going church, but go because they want to go (critiques of religion as gunmen writ large notwithstanding), it's clear that church goers do derive a benefit from supporting their church.

It could be countered that, while tithing does support the church, churches do have a social mission. However, a fairly small amount of the amount tithed actually goes to charitible activities. I've found that it's rare to find a church that devotes more than 20% of its expenditures in a given year to bona fide charitible activities (and the majority far less), with everything else going to overhead and expenses for the worship services. If any other charity had that kind of ratio of charitible spending to non-charitible spending, they'd be under investigation by the IRS for being a sham charity. Tithing, then, functions more like morally neutral dues than it does morally commendable charitible contribution

Free Trade and Distributional Politics

The Blue Crab directs us to a by-the-numbers Opinion Journal article that claims that protectionist policies are incoherent when advanced by champions of the blue collar. The Crab sums it up for us:

I have seen a number of left wing bloggers touting the protectionist agenda as a good thing. But like the isolationist tendencies they have, these are bad ideas. But exactly like the anti-Wal-Mart jihad, it is doing the bidding of the unions at the expense of the poor.

I'm a full stop supporter of free trade (that's one thing Clinton Dems and economic conservatives can agree on: we're all liberals in the classical sense).

That said, the gains from free trade are not unambiguously good: the gains are spread broadly, and the losses are concentrated within sectors in which we no longer have a comparative advantage vis-a-vis our domestic markets. So it's no surprise that states with sectors that are getting rocked by globalization (the carolinas w/ textiles; the rust belt w/ manufacturing) are retreating to protectionism in the absence of policies that can take those broad gains and distribute them in such a way that even people in those regions hit the hardest by trade can support trade. (there was a small flurry of posting on this topic in the liberal blogosphere about a month ago, but I can't seem to find the links).

It's isn't surprising, and it isn't irrational: the point of regional support of protectionism is to reduce the small-but-broad gains made in states that win on free trade in order to prevent the localized-but-deep losses in those states that lose on free trade. That's perfectly rational - in fact, it may very be the definition of rationality (in the economic sense).

Curiously, for an editorial board of a paper centered economics, the Opinion Journal suggests that unions started opposing free trade in the '60s because of their political support for democrats, rather than the obvious economic reason that the '60s were the last time America enjoyed comparitive advantage in industries that unions represented.

Hamdan & Jurisdiction: Cliff Notes Edition

At Blogs for Bush, Mark Noonan addresses the jurisdictional question in the Hamdan case thusly:

[This] seems to say that no judge has an ability to hear a case arising out of the detainees in Gitmo - except the US Court of Appeals in DC, and that only as it relates to appeals of status - ie, someone claiming to not legitimately be deteined in Gitmo (this, I presume, designed to prevent the transfer of a prisoner from the jurisdiction of the US to Gitmo). The Act goes on to say that the DC Court of Appeals shall have exclusve jurisdiction - that seems to mean that once the DC Court has spoken, all judicial appeals are exhuasted.The court's reasoning made sense to me.

Statutory construction is never easy, especially when there are statutory cross-references all over the place, but as I read both the act and the decision (pdf), the basic issue is whether the act excludes pending habeus claims from general appellate jurisdiction. With that in mind, here's how Justice Stevens read it.

This is the summary structure of the act:

(e) the court doesn't have jurisdiction over:
(1) habeus
(2) determinations of the tribunals re: proper detention
(3) final decisions of the tribunals
(h) effective date:
(2) sections (e)(1) & (2) apply to pending cases.

As I read it, and as the court read it, (h)(2) means that the act didn't touch pending habeus cases. If pending habeus cases are also removed from jurisdiction, then there's literally no reason for (h)(2) to exist. It'd be a meaningless subsection that the Congress inserted because they had to make the bill take up 3 pages, and they'd already tried switching to Courier New, but that only got them to 2.75 pages.

That's pretty much where the action is, IMHO, in the jurisdictional question. And, as every other commentator has noted, it's a pretty close call (Scalia's explanation of how the subsection isn't just spacefiller is pretty good - I recommend everyone read the relevant portions of the majority and then Scalia's dissent. It's not easy reading, but it's worthwhile.)