Showing posts with label BusinessWorld. Show all posts
Showing posts with label BusinessWorld. Show all posts

Saturday, May 02, 2009

Hyperwage Theory is 7 Years Old Today

The idea for Hyperwage Theory came to me sometime in 1995 when I was working among US and British expatriates in Hong Kong and was assigned to several world capitals (New York, London, etc) as a result. The central idea of course is Purchasing Power to the lowest worker. However, at the time, I did not have the full backing of economic principles to back up my discovery. Since then I have read many textbooks and history of economics with the eye of somebody going against conventional economic wisdom. The first time I wrote about Hyperwage Theory (it was not called Hyperwage Theory then) was on May 2, 2002 in my BusinessWorld column. That was the Part 1. Therefore, officially, Hyperwage Theory is 7 years old today. However, part 2 was actually written in 2005 (three years after Part 1). It was in Part 2 that I settled on the name Hyperwage Theory. I actually wanted to call it "High Purchasing Power Theory" but this phrase was too wieldy, too long, too generic, and lacking the originality of an freshly invented word. And people will be referring to it as HPPT Theory? I settled on Hyperwage Theory although this term alone scares away first time readers. I figured, Hyperwage is a controversial term, but, hey, I invented it and its catchy and short. Part 1 by itself is self-contained, it described the theory and principles behind the theory. It should prove to be self-evident. Part 2 and the series was serialized for 33 weeks (whew!) in 2005 and the series was the detailed explanation of the basic tenets mentioned in Part 1. For all intents and purposes, the economic policy makers and the government executives were exposed to Hyperwage Theory in 2005 (four years ago). Hyperwage Theory made the term "purchasing power" fashionable, and I am happy that I achieved my first goal with my theory, and that is "awareness." And you can read so many accounts purporting to debunk Hyperwage Theory but look at their arguments: Do they stand on solid ground or are they just repeating the ideas of the authors of textbooks. And why do Third World people still line up at US embassies looking for that golden visa if not in search of Hyperwage? As long as they cannot answer you that with common sense, don't easily believe those detractors. They are not saying anything new, they are repeating the same economic ideas that have perpetrated and actually worsened the poverty conditions in Thirld World countries. Keep these in mind as your read the articles of the opponents of Hyperwage. (But remember, the government and the politicians have started to catch on: Purchasing Power is not a popular soundbite for them. Isn't that a signal, they are beginning to see the value of Hyperwage Theory?) Now, Hyperwage Theory has become a byword, (the butt of jokes), and Purchasing Power is the economic jargon of the times. Have you heard about "consuming power", "spending powers" "buying power" spoken by the senators, congressmen and economic advisers to the President? Before 2005, purchasing power was hardly a word, they uttered. Now, that they have dipped their feet in the pool, are they ready for US$1.50 per hour (or P20,000 per month) salary for the domestic helpers? Whatsoever you do to the least of your workers, you do unto the economy.

Tuesday, March 10, 2009

Portrait of the Street Strategist as Bar Examiner Part 2

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Portrait of the Street Strategist as Bar Examiner - 2 -
his is the continuing pseudo-treatise on the portrait of the Street Strategist as a bar examiner on how to maximize the effectiveness of the bar examinations as the only reference performance metric (RPM) of the candidate, and how to minimize its inherent shortcomings.
In Part 1, we discussed the oblique ratio decidendi establishing the reason why a person who is not even qualified as an examiner should possess the wisdom to conjure up this treatise.
In this installment, we shall discuss the basic operations of the bar examinations.
Prior to admission into law school, one must have a Bachelor’s degree with major in political science, English, Spanish, history and economics under Rule 138, Sec. 6 of the Rules of Court. However, the Supreme Court is not strictly enforcing this, relying instead on the Certificate of Eligibility for the Bachelor of Laws program issued by the Commission on Higher Education.
Thus, other Bachelor degrees that contain a minimum amount of certain units in English, or political science have been certified by CHED.
Unexplained variance
There is one curious situation in law school. Students who were brilliant in college seem to be struggling in law school. It is not easy to identify and explain the variance of their mediocre performance in law school compared with their excellent performance in college. Is law harder than accountancy or physics?
What is the logic behind this unexplained variance? There is one convincing theory. The reason is that Bachelor of Laws is necessarily a second academic degree. So what?
Think of your college days. As a full-time accountancy student, did you have classmates who were part-time night-time students? Did you expect them to be of Summa Cum Laude caliber? Did you expect CPA board topnotchers out of them? Definitely, not, after all, they were merely working students. You were even wondering if they’ll finish accountancy in the first instance.
Now, since Law is a second degree, almost all law students are working students with no time to read the jurisprudence and no time to memorize the provisions. That’s the main logic of the variance.
The law may be hard
There is a principle of law that says dura lex sed lex – the law may be hard but it is the law.
This means that sometimes the law, when applied, will result in a harsh decision but we cannot do anything about it because it is the law.
The remedy, of course, is for the legislature to cure the harshness by amending or abrogating the said law. In principle, remedial legislation is uncomplicated.
However, in practice it may take five decades, given the personal financial priorities of our legislators to recoup their unreported egregious campaign expenses.
But let me pose the question: Is Law hard? As a degree, I mean.
The Street Strategist summarizes it this way: The law may be hard (dura lex) but the law, as a subject matter, is very easy.
Yes, I’m going to repeat that. Law is one of easiest subject matters to study.
In fact, high school algebra is more difficult. For example, a physics graduate can read and understand a textbook on Political Law on his own, even without attending a single class. Can you expect a political science graduate who is now a lawyer to read quantum mechanics on his own?
In other words, anybody can read the law but not everybody can read mathematics. There is a non-commutative relationship.
It is very simple to study law. Just read and remember. That’s all. No mental acrobatics of factoring trinomials, no mental calisthenics of the Black-Scholes option pricing theory, and no mental contortions of integral calculus. Just read and remember what you read. Even a high school graduate can do that.
If studying law is very easy, how come many flunk the bar exams?
Simple rationale: Lack of reading and remembering. Remember that Bachelor of Laws is a second degree. Almost 90% are working students which by nature is strictly contrapuntal to the requirements of the study of law: time and memory.
Thus, those who flunk in the bar never had the time to read the law, and never had the good memory to remember the cases assigned in law school, and they are cramming in the six-month bar review. The main culprit is that they were working students with no time to read.
By the way, don’t ever believe those who say that memory is not required in law. How can you remember what you read if you don’t have good memory?
If what you read in freshman law tends to be a dark memory in your senior year, then you’re dead. However, there is a redeeming grace. Constant repetition and comprehension of the law is a good substitute for memory.
By the way, another reason why many of the working students flunk, aside from lack of time to read and memorize, is that they don’t have any strategy on how to attack the problem.
It’s so funny how college geniuses who don’t have time in law school fight the problem with brute force reading and memorizing.
Where is their brilliance? They have the brains but they don’t apply it. That’s why, sometimes, its fun to be a struggling student like the Street Strategist. I may not be brilliant but at least I know how to identify problems.
The students and the professors have no strategy in studying law. This is not the time to discuss, but I tell you, the way law is taught by the professors is wrong, not only in the country but worldwide.
I’m talking about strategy in studying law. Yes, that is a sweeping statement but I did it before. I made a sweeping statement that the accounting professors are wrong in the way they teach debit and credit.
There is no cohesive strategy that candidates employ in the study of law.
Well, that’s the case of seeing what everybody else has seen and thinking what nobody else has thought. Remember, I was the one who had the courage to tell the entire accounting world they do not know how to teach debit and credit.
Soon, I will tell the world that they do not know how to teach law and I will show them how. But not now.
Bar subjects
The bar examinations is a one-month ordeal administered in four consecutive Sundays in the month of September.
On the first Sunday, the subjects are Political Law and Labor Law. On the second Sunday, the subjects are Civil Law and Taxation. On the third, Mercantile Law and Criminal Law, and on the fourth, Remedial Law and Legal Ethics.
The subject with the biggest weight is Remedial Law at 20% which is the subject on how to enforce the law. You may not believe it, but Remedial Law is all about the Rules of Court, including how many days you are given to respond to a pleading, or whether the testimony of a witness will be admitted. In other words, the subject with the greatest weight is one which is not strictly about law but about how and where to file cases.
Political Law includes constitutional law, political law, administrative law, election law, local government code, municipal corporations, human rights and international law. Can a municipality enact an ordinance imposing on movie houses to grant a 50% discount to children?
Labor Law covers the Labor Code, social legislation, sexual harassment, and agrarian law. Is a pension fund fully funded by the company with no employee contribution subject to collective bargaining?
Civil Law includes the Civil Code, the Family Code, Adoption Laws, Property Registration and conflict of laws. By the way, the Civil Code alone has more than 2,200 articles. Now, you’re telling me that memory is not needed? Just try this, what are the differences between a precarium and an antichresis.
Taxation covers the National Internal Revenue Code, Tariff and Customs Code, and the Local Government Code on taxation and how to enforce remedies therefor. Is income tax expense a valid deduction from gross revenue for the purpose of determining the return on rate base for a utility?
Mercantile Law covers the antiquated Code of Commerce (which is so old there is no number of this law unlike other laws like RA 3952, the Bulk Sales Law). It covers Letters of Credit, Warehouse Receipts, Negotiable Instruments, Insurance Code, Transportation laws, maritime laws, Corporation law, Securities law, banking law, Intellectual property law, mortgage, and insolvency. Does the doctrine of the last clear chance apply to maritime collisions?
Criminal Law covers the Revised Penal Code, which in itself is daunting array of distinctions. When is it grave coercion or kidnapping or arbitrary detention? This covers probation law, anti-fencing law, other specials laws including the Anti-corruption law.
Remedial Law covers the Rules of Court. The Rules are subdivided into Civil Procedure, Criminal Procedure, Evidence, Special Proceedings, Summary Procedure and other related laws. Is the decision of a division of the Supreme Court considered a decision of the entire court itself? What is the difference between appeal by certiorari and the special civil action of certiorari?
Legal Ethics is probably the most violated of all laws by lawyers and judges. In addition to ethics, this subject includes legal forms and exercises.
Bar Committee
The chairman of the Bar Committee is an incumbent Justice of the Supreme Court that changes every year. He appoints Bar Examiners from the former Justices or judges, practicing lawyers and sometimes from the academe.
Recently, a special study group on the Bar Examination reforms suggested certain qualifications and disqualifications of Examiners. Among the qualifications are expertise and the capacity to check test papers personally, and on time. This is the reason why sitting Justices of the Court of Appeals or judges in the Regional Trial Courts are seldom chosen as examiners.
Relationship with an examinee within the 3th civil degree, staff or family members of his staff, connection with a law school are disqualifications. For this matter, professors usually take mysterious leaves of absence from school for one year, and he becomes a suspected examiner. The search for his lecture notes and previous quizzes starts immediately.
The identity of the examiners are only revealed after the bar exams to the other members of the bar committee. The public knows them only at the time of the release of the bar results.
Each examiner is supposed to give 50 questions personally to the Chairman at least 45 days before the exams. The questions are preferably in the handwriting of the examiner.
Of the 50, the Chairman will select 20 questions or, the latter may reject all questions and make his own.
The cut-off date for the laws and decisions covered by the bar is 30 June of the previous year.
The correction is a cloak and dagger operation. Within 10 days after the exams, the Bar Confidant will deliver to the examiner, personally, at a secret place and time, 250 answer books in a sealed and locked canvass. The balance of the 5,000 or so answer books are kept in a vault in the Supreme Court. One key is given to the examiner and one key is given to the Bar Confidant. Thus, the answer books are safe.
The examiner is given one week to correct 250 notebooks. That’s about 50 per day, or 25 in the morning and 25 in the afternoon. It’s a very boring, tiring job.
Each week, the examiner will hand over 250 checked notebooks and get 250 more to check. For 10 weeks, that 2,500 and 20 weeks for 5,000 answer books.
Can you imagine checking 25 answer books every morning and 25 every afternoon for 20 weeks? That’s close to 5 months of non-stop checking of 50 booklets per day.
There is only one rating in your notebook and that is the total cover on the cover. You have no way of knowing what is your exact score for a specific question. The exact score are actually written on a grading sheet, one copy goes to the Bar confidant and the other copy retained by the examiner.
The scores on your book are in whole numbers, not fractions like 84.5. The passing grade is an average of 75% of all the subjects subject to the condition that one should not obtain a grade below 50% in any of the subjects. One person who obtained an average of 74.99% fails.
These are the basic details of the bar examinations as a process. We will discuss the implications of these in the coming installments.
to be continued
(Thads Bentulan, June 10, 2004)
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