My Appreciation For Your Theory

Subject: My Appreciation for Your Theory


Hello,
I had another look with your book, Hyperwage. And it was really very
entertaining. I do understand how completely you are endeavored with
the idea. I would also say I am a convert too.

Back in 2008, I took another stand when I was trying to see it on the
other side. I was very much skeptical about your theory.

I think it as a wishful thinking. I was a critique on it.

I posted a lot of opinions against it. I even had a debate with someone in the DYAB thread on it.

And so it happened that I completely ignored it and went into a deep hibernation especially last year.

I was in fact, one of your avid listener and trying to discredit the practicality of your theory.

And fast forward to October 2010, it took me 2 years to give your theory another try. I read your book for the second time around.

IT was then that I found out that I missed a lot.

being a critic at first took me no regret. We need critics in our life to look
at the other side.

The second time I took the book seriously, I find out many of its application
that is so vast that it really makes you worthy to get a Nobel Prize for it.

The idea is so good. I don't know if there are already some people embracing
the idea, but it is universally a very good idea that even seculars and clerics
must embrace it. It is an idea far greater than Marx.

It is the gospel that Christ preached! It is the golden rule!

Let me share my own view of your idea. We need a leverage in our
income in order for us to create another opportunity of doing economic transaction.

With 20% of our income pegged at basic needs, we can contribute the vast 80% of the
remaining income circulated in the economy.

A lot of people did not realize this fact.

Most of them are hired by rich people wanting only to enrich themselves.
It is sad to note that some of our so-called economic experts like _______
did not even consider your idea a far greater one.

Well, it is expected that they would not even consider it.

These guys are just plainly, intellectual prostitutes. They are prostituting their so called expertise to the rich people and yet no matter how experts they are, they have not even given a good theoretical foundation on how our economy must be based on.

I made this email to tell you how I embraced the whole idea so much.

Currently, I am working with the biggest bank in the world which attracts some talents here in Cebu.


And realizing how important it is to leverage our income, I could say, there is no other economist that the world must listen to and that is JT Bents, and there is no other program in radio to listen to and that is your program.

Also, thanks for sharing the Howard Schultz story. I had listened it one time and the whole series of it.

I share your views on democratizing economic ideas as well as democratizing wealth.

Wealth I think is not just a material wealth but knowledge also.

--
Kristian Iroy

The Blessing, the Curse and the Hope of Democracy

The Blessing, The curse, and the Hope of Democracy



The blessing of democracy is that the single vote of the poor man can equalize the single vote of the rich man.


The curse of democracy is that the single vote of the irresponsible voter can annihilate the single vote of the conscientious voter.


The hope of democracy is the single vote of the poor but conscientious voter, for together, the poor comprise the majority and hold the real power in a democracy.


As a nation, let us all celebrate the blessing, abhor the curse, and protect the hope of democracy.

- Thads Bentulan





Thads Bentulan (2010) streetstrategist@gmail.com

PCOS is not the bottleneck: Additional Data on Voting Throughput of Clusters (Election 2010)

Did the Comelec commit a huge omission on election day?

Sure, the presidential elections is a huge political process, a huge exercise in patriotism, and a game changing decision making process whose results will affect not only our generation but also the generations to come.

But isn't the elections a huge manufacturing process as well? It is a customer interface of great magnitude. The voters are being processed by a system that is monopolistic, they have no choice on the matter.

Unfortunately, it seems nobody has ever conducted a study of the voting process from the point of view of operations management.

This is a huge omission considering that this process involves 50 million people undergoing a poorly studied and poorly managed physical process.

Comelec and the management groups missed out on designing and conducting a time and motion study of the actual voting process on election day.

Queuing theory, line balancing, critical paths, load distribution, capacity utilization, probability density functions - this could have been a huge management study.

For example, like what I have done below and in the previous blog, the PCOS count and the time elapsed could have been taken down every 30 minutes by the youth volunteers and the by the BEI themselves by filling out a simple form. This process takes less than 10 seconds, every 30 minutes.


All those data points can actually be used to do curve-fitting. When is the peak time? Where is the bottleneck? Is the process quadratic? Exponential?

Can you imagine if Comelec and the management associations had this information collated on the 76,500 PCOS clusters? What a wealth of management information!


In a very simple way, I attempted to do this by gathering actual data from the BEI's (had some extra help, of course) and the survey below reflects my feeble attempt at extracting scientific data and illustrating the kind of studies that can actuall be done.

But then there's always 2013. I can volunteer to help Comelec design such a study. I am not an expert but at least I have already done here what the Comelec and other agencies and private management associations could and should have done. Although, this study below has obvious limitations.

Is the voting process a Poisson process or a Gaussian process? How do we manage the queue? Should we encourage the voters to come early and frontload the process thereby having a peak load at 8am with almost no load at 5pm?

The PCOS is not the bottleneck of the voting process. In fact it has been idle most of the time. The reason for the low throughput is the slow passing of the filled-up ballots by the voters. This is due to the low number of voters being processed at one time.

Offhand, one of my suggestions is: Instead of 10 voters at a time, Comelec should allow 30 (or 15) voters at a time (find the space). After one goes out, one voter must be allowed in. In this manner, at any given minute somebody is finished filling up the ballots and feed it to the PCOS machine.

****************************************************************


Note:
1. This report should be read in conjunction with the previous blog on voting time.
2. Voter turnout in this school (19 clusters) is only 67.3% (in highly urban district) where the next elementary school is just about 1 to 2 km away. (12,332/18,329 - this is not a small school)
3. Did the voters leave but did not return?
4. The lowest turnout is 57.4% (560/975)
5. The actual throughput of the entire school of 19 cluster is 1.06 min/voter (17.47 hours for 1,000 voters)
6. As of 6:40 practically no more voters.
7. PCOS machines is not primary reason for low throughput. It is the low number of voters passing their finished ballots (instead of 10 voters at one time, they should make it 30)

Survey Time from 6:39PM to 6:54 pm (19 clusters of Mabolo Elem. School Cebu City
Cluster	Time Taken	Time Elapsed (Minutes)	PCOS Count Read (Ballots)	Registered	Turnout Percentage	Minutes per Voter	Final Results?
157	6:39	699	706	985	71.7%	0.990085	Final
158	6:39	699	704	979	71.9%	0.992898	Final
159	6:41	701	727	983	74.0%	0.964237	Final
160	6:41	701	720	994	72.4%	0.973611	Final
161	6:42	702	698	994	70.2%	1.005731	Final
162	6:43	703	737	993	74.2%	0.953867	Final
163	6:44	704	701	990	70.8%	1.00428	Final
164	6:45	705	711	991	71.7%	0.991561	waiting*	Fastest
165	6:46	706	658	985	66.8%	1.072948	Final
166	6:46	706	670	987	67.9%	1.053731	waiting*
167	6:47	707	701	995	70.5%	1.008559	waiting*
168	6:48	708	657	987	66.6%	1.077626	Final
169	6:49	709	689	995	69.2%	1.029028	Final
170	6:50	710	589	940	62.7%	1.205433	waiting*	Slowest
171	6:51	711	560	975	57.4%	1.269643	Final
172	6:52	712	612	992	61.7%	1.163399	Final
173	6:57	717	570	988	57.7%	1.257895	Final
174	6:53	713	453	786	57.6%	1.573951	Final
175	6:54	714	469	790	59.4%	1.522388	Final
* waiting less than 5 voters as of survey times
Note: The minutes per voter not reliable bec no more voters at survey time
The minutes per voter for those with waiting are applicable
Average Minutes per Voter (for clusters with waiting voters):					1.06482117
Average Turnout			12,332.00	18,329.00	67.3%

Street Strategist: Cited as reference

These are some of the instances where the Street Strategist's papers have been cited. (There are some more but not included in this list)


The Street Strategist’s has been cited by a few international books and universities, including his invention of a new set of rules in accounting published in BusinessWorld on August 18, 1999 in a paper called “The Accounting Wizard,” which is the world’s fastest and most accurate way to learn debit and credit by eliminating the use of the T-account in the learning process, and using instead the five codes that he invented.

The Street Strategist’s paper, “The Century Bond: Equity in Debt’s Clothing” was cited as reference on page 1009 of the 2007 book entitled “Financial Products: Taxation, Regulation and Design,” ISBN 0808016377 (3,504 pages) by Andrea S. Kramer, published by CCH Chicago. This is a three-volume set that details the policies, rules, and interpretations that govern the U.S. federal regulation and taxation of securities, derivatives, commodities, options, and hybrid products. Andrea S. Kramer, is the Head of Financial Practice of the international law firm McDermott, Will and Emery in Chicago, professor of law of Northwestern School of Law, and professor of taxation of derivative products. She graduated B.A. summa cum laude from University of Illinois and J.D. cum laude from Northwestern University.

The Street Strategist’s papers, “Lending Eloquence” and “Evil Transcends” were cited in the bibliography of the “USAWC Strategy Research Project” entitled “The Bush Doctrine: Shifting Position And Closing The Stance” by Lt. Col. John M. McBrien of United States Air Force, with Col. Jeffrey L. Groh, Project Advisor, of the U.S. Army War College in Carlisle Barracks, Pennsylvania dated January 26, 2004.

In Fall Semester in 2005, in the course on “Problems in Financial Reporting” Dr. Richard Lambert of the Wharton School at the University of Pennsylvania assigned to his advanced class the Street Strategist’s paper, “Goodwill the Intangible.”

Street Strategist’s paper, “Goodwill the Intangible” was assigned for reaction and critical review in the Immediate Accounting class of Jerry Lundblad of the College of Business Administration of the California State University in Sacramento in March 2002.

The Street Strategist’s paper, “A Prescription for the Indonesian Bond Market” was published in FinanceAsia magazine in Hong Kong in 2000 and reprinted by the Jakarta Post in Indonesia on December 20, 2000, and in BusinessWorld on March 15, 2001.

The Street Strategist’s book “Strategy Myopia” was quoted in the paper “Rainwater Harvesting in Tucson, Arizona: A Pilot Study on Increasing Practice,” written by Lisa Gavioli, Kara Heward, Karen Pennesi, Christopher Roos, Ronald Hector A. Villanueva of the University of Arizona.

The Street Strategist’s article in Hong Kong-based capital markets magazine FinanceAsia on the Philippine National Bank entitled “The Arithmetic of Lucio Tan” was quoted and discussed page 115 of Korean language publication (issue 01-02) of Korea Institute for International Economic Policy in South Korea.

The Street Strategist’s paper was cited in the bibliography of the PhD Dissertation of at the Asian Institute of Technology’s School of Management in Bangkok, Thailand of Thumanoon Paukatong entitled “Technological Dependency In The Electric Power Generation Industry, with advisers Prof. H. Paul (Chairman), Dr. B. Igel, Dr. K. Ramanathan, Dr. S. Siengthai, and Dr. W. Ongsakul

In the book “Pinoy Pilgrim: In Search of the Filipino Identity” (ISBN 978-971-93739-0-3, 2006) by Manoling de Leon, who was a marketing executive in Europe, and consultant to the Lopez group of companies, and consultant to Philippine Presidents, the Street Strategist has been characterized as a “genius” for his Hyperwage Theory in economics. Here are excerpts from the book pages 225 to 226: “The secret to making the Philippines great is giving our people high salaries. The idea is not original but I read it from a maverick young writer for Business World named Thads Bentulan, also known as Street Strategist xxxx xxx xxx. The effect according to Mr. Bentulan will be revolutionary. Xxx xxx xxx I looked at it and concluded that Bentulan is a genius xxx xxx.”

Street Strategist’s paper “The Valuation of Juan Luna” was quoted in the book “Sanghaya 2003, Philippines Arts & Culture Yearbook,” published by the National Commission for the Culture and the Arts (NCCA) in an article entitled “The Cost of Saving Our Cultural Heritage,” by Bienvenido L. Lumbera, a National Artist awardee.

Street Strategist’s paper, “The Accounting Wizard” has been adopted since 2002 as standard reference material for its new students by the Institute of Accountancy of the Arellano University through its Dean Ireneo Tubio. This proves that the Street Strategist has invented something that the accountancy experts found very revolutionary.

Street Strategist’s paper, “The Accounting Wizard: How to Become One in 30 Minutes” was made required reading at Don Bosco Makati for accounting students on December 9, 2005 by Prof. Virgil Leslie B. Fonacier.

Street Strategist's paper  "The Arithmetic of Lucio Tan" was cited as reference by the book The Anti-Development State: The Political Economy of Permanent Crisis in the Philippines by Walden Bello,Walden F. Bello,Marissa De Guzman,Mary Lou Malig, and Herbert Docena published 2005 by Zed B ooks London.

*

Why Filipinos Are Not Rich (January 2007)

 Why Filipinos Are Not Rich

The Street Strategist has arrived at the conclusion that the poor Filipinos are not rich because they do not have money.

This is a very simple concept but it takes a genius to appreciate its simplicity. You may notice that I am trying to explain “why Filipinos are not

rich” in contrast to “why Filipinos are poor.”

Is there a difference? Yes, there is.

In asking “Why Filipinos are not rich,” the implication is that the normal state of events should be that Filipinos are rich and we have to explain if ever they are not in the normal state, that is, we have to explain why Filipinos are not rich when supposedly they should be rich.

Diminishing circle

Anyway, let us proceed.

The Street Strategist has arrived at the conclusion that the poor Filipinos are not rich because they do not have money.

The Filipinos have no money because the country’s wealth is inequitably distributed in favor of a few rich.

Wealth is inequitably distributed because the labor sector does not have a bigger share of the wealth.

Labor does not have a bigger share because they are mispriced and undervalued.

Labor is undervalued because they do not have an equal footing to enter into a fair contract with the rich employers. 

A hungry stomach does not last one day of bargaining.

To gain a stronger footing, the government should step in and prescribe a higher minimum wage.

But the government does not want a higher wage because they are afraid the businesses would have lower revenues as a result of higher labor wages.

The businesses cannot maintain their revenues in the faces of higher costs because the demand for their goods and services do not increase.

The demand for goods and services do not increase because the labor class are not rich, therefore they have lesser disposable money.

The people have no money because the wealth is inequitably in the hands of a few rich.

Thus, we are locked in an ever diminishing circle.

Community of inequality

Let’s view this from another perspective. 

According to a World Bank study, 1/3 of the wealth of the Philippines is owned by only 5% of the Filipinos. 

This is a huge disparity.

This is an egregious distribution of wealth.

In economics, the Gini coefficient is the measure the gap between the rich and the poor.

What does this statistic mean?

Try to visualize a community of 100 of your friends.

For every PhP100 spent within this community, after all is said and done, these expenditures and incomes will eventually settle as asset or wealth distributions. 

Of every PhP100 in asset, PhP33.3 goes to only 5 of your friends (PhP6.70 per pax).

The balance of P66.6 is distributed among the reminding 95 friends (PhP0.70 per pax).

Can you imagine how inequitable that is? That’s a ratio of 9.5 to 1, or 950%.

And did you forget something? 

Those 5 friends of yours were actually not doing any work at all. They were playing golf all day, while your other 95 friends were the ones toiling under the hot sun, fighting against each other, backstabbing each other, and knocking on doors at night to sell products.

Is that fair?

What is really callous is that your rich 5 friends have billions of money that they could not possibly consume in ten lifetimes.

Single solution

And yet you ridicule me for proposing a single solitary action, that is, a legislated minimum wage of  P20,000 ($400 at $1=PhP50)?

Please remember, I am not advocating communism, socialism, or confiscation of property.

I am only advocating the correct valuation of labor, the world market price for labor.

Why can’t our teachers be paid like the teachers in Singapore? And Singapore has zero natural resources to rely on unlike the Philippines?

Squander

Myth: The Filipinos are poor because they squander money.

I heard so many upper class people say this. I even heard on radio somebody who cited their rich neighbor whose children squandered their inheritance.

But many Filipinos are fortunate enough to inherit wealth? A few thousands? We have about 35 million workers, and that’s the majority. They have nothing to squander.

Job search

Myth: The Filipinos don’t look for jobs.

I find this too simplistic. Filipinos are looking for jobs so much so that millions of Filipinos in search of work worldwide.

Maybe there are too few jobs here in the country. I have repeated many times why is there only a few jobs around. 

That is why I wrote several chapters on the topic of job creation as a result of the Hyperwage Theory.

Maybe the jobs are not paying well enough. 

If the actually wages are lower than the threshold reservation wage (the point at which the worker is indifferent if he has a job or not), then maybe that’s the reason they do not apply for jobs. 

Remember if you work in the US for one year that is equivalent to 10 years in the Philippines. 

Lazy

Myth: The Filipinos are lazy.

You must be kidding me. Give each one a minimum wage of PhP20,000 and you’ll see. Currently, among the best workers abroad are Filipinos. And you and I both know that.

Unsaving

Myth: The Filipinos don’t save.

Of course, the savings rate in this country is low. 

Of course, the Filipinos don’t save. We have half of the country living below the poverty line and you expect savings?

But the top 5%, yes, they do save. Save for what? 

Should that money be shaved off a little bit and shared back to the workers in form of higher wages that will be used to buy the goods and services owned the same top 5%? 

It will all go back to the businessmen anyway.

Naturally rich

The Filipinos are naturally rich. 

If we monetize the value of our entire natural resources nationwide we would have a higher per capita wealth than Hong Kong, Taiwan, or Singapore. 

But why is it that these city-states have a higher per capita income than the Philippines given that fact that they have no natural resources?

Simple. They put a value to their intellectual capital and human capital.

In Hong Kong, if you can’t afford to pay about PhP25,000 for a domestic helper, then don’t have one. 

If you can’t afford to pay PhP30,000 for a sales clerk, then don’t be in business.  

But do you know that happened? 

Businesses flourished. 

And they have domestic helpers who are nurses or principal teachers from the Philippines.  

Hong Kong is the 4^th or 5^th largest financial center in the world and it is only about 1/5 the size of Cebu province and it have zero natural resources. It imports water from China, can you imagine that?

Singapore imports vegetables from Indonesia or Malaysia.

Why aren’t the Filipinos rich when in fact they should be? 

It is because the minimum wage workers are paid slavery wages, very far from the world market price for labor with is the US price.

Since they have slavery wages, they have little purchasing power. With little purchasing power, there is little domestic market. 

When there is little domestic market there are few businesses. When there are few businesses, then there are fewer employees, and since there are fewer employees, there is little purchasing power.

And if there is little purchasing power there is little domestic market and so on and so forth.

Few rich, thin middle class

The Philippines has a very thin middle class, as with any other Third World country.

It is the middle class who provide entrepreneurship, the small businesses that is 95% of the number of establishments.

Again, this thin middle class is due to the egregious concentration of wealth in the top 5% of the population.

How do we then solve the inequitable distribution of wealth? 

With only one stroke. 

A legislated minimum wage of about P20,000 ($400) probably staggered over five years.

I am tempted but would not discuss here all the economic benefits and non-economic benefits of Hyperwage Theory because I had done that in my 33-chapter book.

Before anyone criticizes Hyperwage Theory, it would do justice if you read it first.

In the same manner that I read as much economic textbooks and journals before I finally set into writing my idea of Hyperwage.

What I am saying is this: The Filipinos are not rich but that is not what is supposed to be. 

We have the natural resources that should have given us the power of the purse, the power of wealth.

The Filipinos are supposed to be rich. And there is one solution to correct this anomaly. Give labor its true value.

Suppose the businesses give back PhP100 billion in wages back to the people.

Assuming a propensity to consume of 80%, the economic multiplier is theoretically 5 times, and the entire nationwide economy will be richer by PhP500 billion. 

This is the beauty of Hyperwage Theory. Instead of business annihilation, there would be economic redemption. Again, I have discussed this fully in my book on Hyperwage.

I hope I can meet my Henry Dennison, the multi-millionaire that Harvard economist John Kenneth Galbraith called crazy but who eventually caused the latter to reverse his economic thought. 

If you recall in my Hyperwage book, Dennison argued that the rich few like himself have a bigger share of the income stream which sucks the economic wealth away from the economic system.

Dennison argued that the income stream to the poor should be increased.

Who will be my Dennison who would believe the Street Strategist’s Hyperwage Theory and become its advocate?

And who will be my Galbraith? 

As I narrated previously, the famous Galbraith was once a Harvard professor who flipped his economic thought and reversed his ideas and finally adopted the very radical, ridiculed, and controversial ideas of John Maynard Keynes.

Asymptotic hyperinflation

Will there be hyperinflation under Hyperwage Theory? 

I have discussed this fully and the answer is that there will asymptotic hyperinflation, that is a hyperinflation with a ceiling, and that ceiling is the world market price.

Let’s take a look at this illustration. This is a simple one but if we analyze common products (vegetables, cooking oil, paper, newspapers, etc.) in this manner, we will have a clear idea of what asymptotic hyperinflation is.

Assume a person eats half a kilo of rice a day. With a domestic helper’s wages of P2,000 per month, then a person earns PhP76.90 daily.

Assuming the current price of rice is PhP30/kg then he will consume PhP15 of rice daily. He will have a net on only PhP61.90 per day.

On the other hand, under Hyperwage, is monthly rate is PhP20,000 and his daily rate is PhP769.

What will be the price of rice under Hyperwage? About PhP50/kg? Where did we get this price?

We assume a comparable quality of rice in the expensive city of Hong Kong which is priced about PhP50/kg. 

Surely, we could not be above Hong Kong’ price under our Hyperwage Theory. 

Thus, after spending for a half kilo of rice, the helper obtains a net of PhP744.

Net disposable income

So which is better, a net of PhP46.90 under our current low wage regime or a net of PhP744 under Hyperwage Theory? What if rice surges up to PhP100/kg? This means our rice will be higher than that in the US or Singapore or Hong Kong?  That’s seems impossible. We could not be above these expensive cities, could we?

Even assuming it is PhP100/kg, but how much rice can one eat? Still half a kilo so that will cost him PhP50 daily, and his net is PhP719 daily.

Now, apply the same to a can of Coke, a kilo of cabbage, an IBM Laptop, an Ericsson cellphone or a Sony TV. 

How do we know what will be the prices when we adopt Hyperwage? Simple, call the US or Singapore prices, and you can use these prices as your reference prices.

IBM pricing policy

Do you really think the price of an IBM laptop will rise 100% once minimum wages are raised 1,000%? 

No way.

It may rise by 5% to 15% but never by 100% because the world market price for an IBM laptop is our reference point. 

If laptops are being sold in this country at P100,000 each, do you really think it would be sold at P200,000 because the minimum wage is now P20,000? 

Why should we pay double than US prices?

See my point?

At any rate, I have discussed all these issues in my 33-week discourse on Hyperwage Theory in 2005. 

Human capital

There are several factors of production in an economic system. Our economic theories emphasize the benefits of using the market price of each of these factors. 

Our theories frown upon subsidies because they distort the allocation and efficiency of capital.

Yet, there is one factor that is not merely an inanimate factor of production, a factor that cannot be made to wait for market forces to determine its price. 

This is human capital.

In the Third World countries, if we wait for market forces to determine the market price for labor, such time may never come in our lifetimes.

Why? Because a hungry stomach cannot wait for market forces. If First World countries value labor at $7.50 per hour, without government intervention, do you think human capital in Third World countries will stop working unless paid the market price of labor?

They cannot survive half a day without food. They will accept anything to survive.

Why aren’t Filipinos rich?

What makes a country or its people rich?

Education? We have a literacy rate that is one of the highest in the world at 95% or more, yet we are belong to the poorest of nations. Can we econometrically say that education is what makes a country rich? Statistics says no.

Natural resources? We have one of the richest natural resources in the world, yet we belong to the Third World. Surely, natural resources is not what makes a nation rich, is it? Statistics says no.

English? We are the third largest English speaking country in the world, but we wallow in poverty not wealth. Is English what makes a country rich? Japan, Korea, Taiwan, and Hong Kong don’t have half of our English skills, yet why are we mere domestic helpers to them, rather than being their rich employers? Or is there a possibility that English is not such a relevant factor we think it is? I admit the BPO industry has employed hundreds of thousands but do you really expect us to become a First World country with this? This is Third World mentality. To attract call centers to the Philippines, we need to slave our college graduates as phone operators? Isn’t it possible that we will perpetuate our status as Third World workers for First World businesses?

Low wages?  For the last hundred years our strategy has always been low wages but why are we poor? Maintaining low wages means that you want the people to earn less than their US counterparts and therefore keep the people in check under the strategy of poverty. Yet, how come low cost of labor did not help our businesses become world-class players like Nokia or Intel or Samsung? Isn’t it obvious that maintaining low wages has kept us in Third World status? Can you economically argue that low wages are what makes a country rich? Statistics says no.

Low purchasing power? Low wages means low purchasing power. Answer me this: Does SM or Ayala go to Maasin Leyte because of low wages? No. The big businesses go to places where the people have purchasing power. 

Purchasing power is due to high wages of the people.

Isn’t it obvious that Jollibee goes to the US because of the high purchasing power despite the high labor cost? 

Why is SMC in Australia? Why is ABS-CBN in Saudi Arabia? 

Economically, what makes a country richer, low purchasing power or high purchasing power?

Yes, indeed, why aren’t Filipinos rich? Why is there a huge gap between the rich and the poor? Why is management paid 100 times higher than the lowest employee in this country while in some countries it is only 10 times?

What is your solution to correct this situation?

As I have pointed out, it is not high education, it is not natural resources, it is not command of English, and it is not low salary that makes a country rich. It is how you value the poorest of the poor. It is how you value least of the least. It is how you value human capital. It is giving labor its true world-market value. It is Hyperwage.

( * * * * * Thads Bentulan   January 18,25, 2007 * * * * *) [D1] 

---

This article summarizes some ideas contained in the book "Hyperwage Theory," which discusses a new theory of improving the wealth of individuals and nations.

To obtain a free copy of the e-book "Hyperwage Theory" send an email to "streetstrategist@gmail.com"

To view a list of books (with sample chapters and table of contents) visit

http://streetstrategist.googlepages.com/

Portrait of the Street Strategist as Bar Examiner Part 8

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Headline: Aug 5, 2010: Half of 2011 Bar Exams in multiple choice format - SC Chief Justice Corona

The exam will be divided in two parts with the first part in multiple choice format with examinees choosing the best answer among four to five correct answers while the second part will be essay-type to test reasoning, writing and logic abilities.

Notes:

For over 100 years, the Philippine bar examinations has not changed in format. There are some minor changes here and there but overall, it has been the same.

However, starting with the 2011 bar examinations, the Supreme Court adopted a two-step process for the bar examinations.

This is the first and the most revolutionary reform in the format of the bar examinations in over a hundred years.   

Why and how did the Supreme Court come up with the idea of a two-step process?

And many have been asking me:  What was my role in that process?

Why are they asking that question? This question about my role stems from the fact that some of my readers over the years remembered that I created this idea of a two-step process many years ago.

I have been getting emails asking me about my proposal  for a two-step process for the bar examinations which I wrote in 2004. Instead of replying to emails individually, here are some points:

1.       I wrote “Portrait of the Street Strategist as Bar Examiner” in BusinessWorld (in my column) from June 3 2004 to August 5 2004 (that was six years ago).

2.       The installment that contained the PBQ (pre-bar qualification) was published in Part 8, on July 22, 2004.

3.       In the said installment, I wrote down the logic of why I came out with the two-step process. Compare the line of reasoning spelt out by the Supreme Court and the line of reasoning I wrote down six years ago.

4.       At the time, the “Portrait” was serialized, one of the SC administrators was a columnist of BusinessWorld.

5.       One of my proposals about eliminating the use of  “A” or “X” to refer to persons in bar problems, and instead use real names such as “Albert” or “David” has been silently implemented starting that year I suggested it. (Compare the bar problems before and after 2004/2005)

6.       Another SC administrator who was a bar review lecturer in that year, admitted reading the series. This anecdote is written about in the series.

7.       My complaints about the poor website design and typo in the official text of the Rules of Court and others, in the website  have been remedied.

8.       When I reported in my column that the bar exam question papers, were available in some stores within an hour after the start of the bar, the following Sunday, SC operatives swooped down on those places outside LaSalle.

9.       After the publication of “Portrait” I sent CDROMs containing the PDF file of the series to each of the sitting Justices of the SC. I also sent one to the head of the Philippine Judicial Academy.

10.   About that time, I received a letter from a senior lawyer of a very powerful law firm. He was a 7th placer in the bar. He wrote:
“I thoroughly enjoyed your series of articles on the bar exams. I was wondering how I could get a complete copy of the series, as I would like my colleagues, some of whom are members of the Philippine Judicial Academy and consultants of the Supreme Court on reforms, to read it. “Sometimes, it takes someone from the outside looking in to remind those inside of plain common sense and reason. “I do intend, with your permission of course, to give a copy of the print out to the following people who I either work with or deal with on a regular basis:
Former Dean Eduardo de los Angeles (Ateneo)
Former Dean Cynthia del Castillo (Ateneo)
Dean Andy Bautista (FEU)
Dean Perry Pe (Palawan State University)
Dean Dante Cadiz (Enverga)
Dean Jud Roy (Pamantasan ng Lungsod ng Maynila)
Dean Cesar Villanueva (Ateneo)
Fr. Joaquin Bernas
I'm not sure if they've read it but I strongly believe they should.”

11.   Although this was written in 2004, the ideas  in the series are still valid. Those lawyers who read this in 2004 and now members of the Supreme Court and or examiners of the bar, I hope you can address the issues raised therein.

12.   Thank you for your interest in this old article of mine. And you might read my ideas for San Miguel Corporation, Meralco, and other companies which I wrote 10 years ago and are now coming true. (Thads Bentulan August 5, 2010)

 

Portrait of the Street Strategist as Bar Examiner - 8 -

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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 Part 2, we discussed the basic operations of the bar examinations. In Part 3, we discussed the species of bar examiners, their positives and negatives. In Part 4, we discussed the ego of the bar examiners and reviewed a few idiosyncratic bar questions. In Part 5, we discussed more questionable aspects of test construction as practiced by the examiners over the years. In Part 6, we discussed the benefits of converting an enumeration question into a problem-type question. In Part 7, we discussed the bar reforms promulgated by the Supreme Court coincidentally just after we started this series.

In this part, we shall discuss the computerization of the bar.

Weird coincidence

Before we move on, let me recount this incident. One of the highest-ranking administrators of the Supreme Court flew into a galaxy far, far away on a weekend to give a lecture to a large audience about the Family Code. Since it’s not everyday that an authority on the subject wanders into that little patch of the universe, many attended the lecture.

After the usual introductions as to the qualifications of the lecturer, the lecture proceeded rather quite smoothly. Among the introductory topics discussed was the concept of civil personality.

The introductory concepts went quite well, really. But, suddenly, the face of the lecturer lit up to a smile, and she threw this question at the audience: “Is a cadaver a property or a thing? And who owns the cadaver?”

The lecture hall was alive with small buzz; there were laughs of amusement. But there was one member of the audience who was catapulted to energized attention from his somnolent lethargy. A what? A cadaver? And why has that example, which is not ordinarily used as illustration, gained currency these days? Is the cadaver of former President Ferdinand Marcos a property or a thing?

The lecturer went on to narrate that when she was still a trial judge there was a case where the concubine would not release the cadaver of the man to the legal wife. The legal wife wanted to file a case of habeas corpus, which of course, was improper. The legal wife merely wanted to borrow the remains for two nights of wake but the concubine would not release it for fear that the legal wife will not return the cadaver to her.

The case was settled by compromise; the legal world was deprived of jurisprudence on remedial law.

Do you think the audience member let go of that cadaver thing? No, way. The discussion of the cadaver as property or thing was not directly related to her lecture on civil personality. But why did she launch into that side story? Why did the cadaver issue gain currency in her mind?

During a break in the lecture, he approached the lecturer: “Madam, do you read BusinessWorld?

She smiled with acknowledgement. “Why,” she said?

“Because lately there was an article there about…”

“Who owns the cadaver?” she preempted him. Unfortunately, they were interrupted by others who also wanted to talk to her; then she was heading outside the hall.

The participant in question was amused at the fact that the reason the cadaver was top-of-mind in the lecturer was due to Part 6 of this series. Now, at least, this was interesting. Two complete strangers meeting for the first time, but bound by common bond. You know, it’s always nice to know that you share something in common with a person absolutely a stranger to you. But that was not conclusive enough. He needed a black-letter confirmation.

When she came back, he approached her with a few questions but delivered the confirmation query as the last question: “Really, Madam, did you read that column in BusinessWorld about the cadaver?”

“Yes,” she said categorically.

For a second or two, the participant was in a state of suspended animation. In his mind, zooming past like a Halley’s comet were questions like, should I start a little talk with her about a thing we share in common? Should I ask her if she enjoyed the series? Should if I ask her if she is a regular reader of the column?

At the last second, he aborted the attempt. It was good enough that he participated in the earlier discussions by correcting the citation of one of the leading cases she mentioned. It was no big deal, even other authors made the same mistake, although nobody knows why they keep using the wrong name of the respondent in this case.

Anyway, I was saying that the participant, at the last instant, avoided any further attempt to discuss the cadaver or the fact that they shared something in common with lecturer: the Street Strategist column.

He felt it was too inconsequential for the lecturer to discuss with him about a column and columnist that was not really about serious commentaries on politics or economics. He also feared doing so would reveal the childishness in him.

After all, she is one of the highest administrators of the Supreme Court. Apparently, her position is high enough that she is officially entitled to use the title “Justice” before her name. He didn’t think an official of that rank could be dragged into a conversation about the “most famous unknown,” although, he really wanted to discuss it. I mean, it’s not easy to find somebody who reads an obscure column like you do, right?

Do you know how he would have started the conversation if he didn’t abort it? I know. And I’m going to share it with you.

If only he did not fear being ridiculed for liking things that are irrelevant, immaterial, and inconsequential. The ensuing might have been a good conversation after the opening line. In his mind was this classic opening line: “Madam, I am the Street Strategist, and yes, I wrote that.”

Well, there’s one more addition to the weird collisions with the Street Strategist, all of which tend to reinforce the belief that I am the most famous unknown.

Citations

Should a candidate cite case titles and article or section numbers as basis of his answers? The examiners and bar reviewers come with a resounding, “No.”

In fact, many examiners said that they think a candidate is pretentious and may be subject to a strict, instead of a generous, grading regime. This is good news to the candidate.

What if you think you are better than the examiner? Now, I got your attention. Let me tone down the proposition. What if you remember a specific instance, that is not famous enough, that may have escaped the attention of the examiner?

Anyway, let’s move on. There was once a time when a certain expert on Civil Law and a former bar examiner mentioned that only the spouse can impugn the validity (absolute nullity) of the marriage.

I raised the issue that the heirs can impugn a void marriage. But the expert said that the heirs can only impugn a void marriage in an estate proceeding after the death of the parents.

I raised this point twice in the discussion but every time I did it, the expert would maintain that only the spouse when living can impugn, and heirs can only impugn the marriage in an estate proceeding.

But we were talking of different things. What the expert is really saying is that the only time the heirs can attack the validity of a void (not voidable) marriage is by way of collateral attack (not direct) in an estate proceeding.

On the other hand, what I mean is that the heirs, after the death of their parents, can attack the validity of a void marriage in a direct attack, not a collateral attack. These are two different animals. The first is an action, while the second is via a special proceeding.

So every time I raised the issue, the expert would shoot me down. Of course, the shooting down was subtle. The expert is effectively saying, you are right that heirs can impugn the validity but you are wrong in the remedy to be used.

On the other hand, I was saying to the expert that my remedy of direct attack is correct and that his remedy of collateral attack is at the same time correct.

What is the bone of contention? Under the rule on nullity of marriages, Section 2(a). Who may file.–A petition for declaration of absolute nullity of void marriage may be filed solely by the husband or the wife.

Guys, isn’t that clear enough? Only the spouse can question the validity of a void marriage. Not even the Solicitor General can initiate it. So now, do you have a clear idea why every time I raise the issue of heirs directly attacking the void marriage, the expert would kindly guide me to a estate proceeding and a collateral attack?

As I said, I’m the unqualified, they are the experts. By the way, just to give you a reference point. The expert in question was a member of the committee of the Supreme Court, which drafted the above rule.

By the way, the Rule itself, consisting of many sections, is controversial. I have heard of a Justice dissenting in a case at bar, but this is the first time I heard that a Supreme Court Justice issued a dissenting opinion to a Rule.

It was very embarrassing, really, because obviously, all the people around me thought I was an obstinate ignorant. Well, in my embarrassment, I always rationalize, I’m not a legal genius. I am entitled to my share of embarrassment.

But you know me, I don’t believe in experts. Do you know how many books misspell res ipsa loquitur as res ipsa loquitor? Funny, I asked several candidates and 100% of them chose the “tor”. I don’t know why. Maybe I’m the one who’s wrong.

Gentle reminder

Anyway, after that embarrassing insistence that the heirs can directly attack, I can only tell you that in my mind, the battle was something else. Actually, when I raised that point, I was gently reminding the expert that although the rule is absolutely clear, there is in fact an exception worth looking at.

In the case of Engrace Niñal vs. Norma Bayadog (G.R. No. 133778. March 14, 2000) decided by the First Division, with Justice Ynares-Santiago as ponente, the Supreme Court squarely faced the issue: May the heirs of a deceased person file a petition for the declaration of nullity of his marriage after his death?

After this revelation, should I be embarrassed on my constant repetition? Again, if you go by the rules, I am wrong. But if I go by Niñal vs. Bayadog, I am right.

Actually, I was surprised in a small way because the expert even mentioned Niñal vs. Bayadog earlier in the discussions, so when I raised my issue on the locus standi of the heirs in a direct (not collateral) attack, I thought the expert would bring on this case too.

Why the lapse on the part of the expert? One, Niñal vs. Bayadog is famous for one doctrine – that the during the entire five-year cohabitation of a man and woman without the benefit of marriage, they have must have no legal impediments, then they can marry without a marriage license. And precisely, the expert cited this case.

However, aside from the civil law fame of this case, this case has a not-so-famous doctrine in locus standi under remedial law. And this is the aspect I was referring to which the expert did not realize.

So now, going back to the issue of the bar: Do you need to cite case titles? The examiners say. “No.”

But then, as I have recounted above, the expert, who was once an examiner in remedial law, did not realize the doctrine of Niñal vs. Bayadog and insisted on the Sec. 2a of the Rule that was created by the committee of which the expert was a member.

By the way, I have a poor memory, buy why did I remember this case? Because the lower court judge was a certain Ferdinand Marcos. How could you forget a name like that? And he dismissed the case precisely on lack of locus standi of the heirs and case was raised directly to the Supreme Court on pure questions of law. This was a sad case. The husband, while living with his mistress, killed his wife. He got married to the mistress without the benefit of a marriage license based on an affidavit of cohabitation that they have lived together for five years but in the earlier part of this five-year period, the wife was still alive. Husband dies in an accident. Children sues mistress for nullity of second marriage.

Does the bar candidate need to cite case titles? Probably, if you think you are better than the examiner.

But then the case was decided in 2000 while the Rule was approved on 2003, which should prevail, the absolute rule or the doctrine of the case? Come on, join the fray.

Now, don’t you think talking to the Street Strategist in person would have been fun?

Alternative answers

Another issue with the bar is the “alternative answers.” What does this mean? The UP Law Center invites experts to formulate answers to the bar questions. And you know what? Some questions have two conflicting answers, and some even have three alternative answers.

Why is that? Is the bar question that hard, or is it improperly constructed that’s why it is subject to misinterpretations? In 2002, in Civil Law, at least 8 out of 17 main questions had alternative answers.

And the big problem is this, the bar examiner is not required to make public his own answer. Thus, the UP Law Center merely provides information for the bar examiner which the latter may actually exclude in correcting papers.

By the way, one or two reviewers have mentioned that during these discussions, when the examiner is around, they could tell by the posturing that the examiner himself had the wrong answer in mind. Can you imagine that guys?

Zero objective

I don’t agree with the new Supreme Court leanings towards the objective type of test, and I have discussed my philosophy and have given illustrations in the previous installments.

Currently in place are objective questions such as definitions, or distinctions or enumerations.

I still maintain that they test memory but not analytical skills given that only 20 to 40 questions are possible in the bar, and that they favor those who have leakage.

Should the objective part be reduced to say only 5% of the questions?

My philosophy is zero objective questions. I know you don’t agree but hear out my logic first.

Even if you say that only 5% is objective that is still a very harassing proposition. Why? Because even if you give me only 5% or 10% or whatever percent of enumerations, I would still have to memorize all those distinctions and enumerations. Who are legitimate children? What are the grounds for disinheritance?

We had this discussion before. The tyranny of the enumeration kills valuable review time for the candidate who should be tested on his lawyering skills. Don’t ask for the enumeration of the recovery actions for property rather ask how to recover a cadaver from a hospital.

There should be zero objective questions and any of those enumerations or distinctions should be converted into a problem-type.

For example, instead of defining what is accion in rem verso, why not create a problem where the facts of the case would make the candidate think: Is this a case of accion in rem verso or solutio indebiti?

Funny, I asked several candidates some time ago, and 100% of them didn’t know what is an accion in rem verso.

Stateside

The concept of multiple choice, true-false, enumeration, distinction and other objective equations are found in the U.S. bar exams such as California. But to adopt them in our jurisdiction will be a mistake.

In the US, passing law school is very hard, therefore, for them the bar is not really much of an RPM. The objective questions in California are not matter of life and death because the bench knows that the candidates are prepared having passed through the rigors of a California law school.

But in this country, many law schools are diploma mills. In some schools, the students pray that the professors will be absent. In some schools, the students pray that the professors will be present. That’s how sub-standard some law schools are. Even the professors don’t take their duties seriously.

This is the reason that instead of wasting bar questions to test their memory, the questions should challenge the minds of the candidates. Hence, zero objective questions.

Computerized test

The Supreme Court wants objective questions but the Street Strategist wants zero. Yet, we can meet halfway.

The Supreme Court has envisioned the computerization of procedures or checking but these are meant to shield the bar examiner from hard work obviating the fact that the bar is a lifetime decision for the candidate. If the examiner is not willing to work hard, he should decline.

PBQ

But I think the kind of computerization envisioned by the Supreme Court is not comprehensive enough in strategy. Allow me to fully integrate a philosophy into the computerization

I propose a PBQ (pre-bar qualification) exam that is 100% computerized and 100% objective. That is, multiple choice, matching, and true-false (MCMTF).

1. Before taking the bar, which will be 100% problem analysis, all candidates must first obtain a PBQ certificate. No PBQ, no bar. Result? Only those who have enough knowledge will be given the privilege to take the bar. Thus, the examiners will no longer be saddled with candidates who do not know the period for perfecting an appeal of a habeas corpus case.

2. A PBQ certificate is obtained by passing a 100% computerized, 100% MCMTF test. This is not part of the bar. But only those with PBQ can take the bar.

3. A candidate will sit in front of a computer take the PBQ test and only those who obtain 90% or more can take the bar. If he fails, then he takes another PBQ test after 30 days. Why 90%? Why not? The answers are guided because they are MCMTF. The computer gives results in seconds. Only the knowledgeable ones should burden the bar examiner.

4. The Supreme Court will of course administer the PBQ centers, in five sites in Luzon, and five spread out VisMin. The integrity of the PBQ will depend on the integrity of the Supreme Court employees watching the computers. Probably a hundred computers in each site.

5. The candidate can take the PBQ only every 30 days, therefore, he reviews again all the concepts. By the way, this PBQ will spawn many flow on businesses. The Street Strategist, for example, will create CDROMs for sale containing a million MCMTF questions. The candidate can test his knowledge at home before he actually takes the PBQ.

6. This PBQ concept is not strange. If you take a driver’s license test in the U.S. it is completely computerized. Therefore, it is the computer that screens the candidates. And you wouldn’t realize this but the PBQ will greatly improve the quality of candidates with respect to their knowledge (not lawyering skills yet).

7. The PBQ is similar to the pilot and flight attendants test on emergency landing procedures worldwide. In some airlines, even a 50-year old pilot will be dismissed if he fails to get 95% in ELP tests. After all, will you fly in a jet where the knowledge of the pilot on ELP is only 70%? In some airlines, the passing is 100% but you are given infinite attempts. In some airlines, you are only given three attempts to get 95% rating. After the third, you will be dismissed even if you have been an employee for 10 years.

8. The PBQ advantages will outweigh any possible disadvantages. Computerized pre-screening; zero work for the bar examiners; forced comprehensive learning on the part of the candidates; quality assurance regarding the knowledge of the candidates who take the bar; only a few candidates will actually take the bar; the wagering aspect of the bar is removed and transferred to the computer test, and the Supreme Court makes money out of the PBQ testing fee, and many others.

9. Being computerized it is easy to include new rules and jurisprudence. Yes, even jurisprudence can be a part of the PBQ.

For example: Which of the following cases declared that an oil pipeline is a common carrier? A) Macariola vs. Asuncion; B) Calalang vs. Williams; C) Co Kim Cham vs. Valdez Tan Keh; D) None of the above.

10. These PBQ centers can be used by the Philippine Judicial Academy for the prejudicature, the mandatory continuous learning (MCLE), for the bench and for the bar.

Strategy

I am against objective questions in the bar itself due to the limited questions possible but I have proposed above an integrating philosophy that solves many problems associated with the bar, by computerizing it but in a twist that it introduced the concept of pre-screening that is painless to the examiner. Can imagine a bar candidate that gets 90% in the PBQ and only those will take the bar? The papers would be a joy to correct.

Actually, this can be done in less than two years. We can start assigning a team to create a million MCMTF questions starting today, and let the computer geniuses of the country buy the software utilized by the US nursing review centers in creating reviewer CDROMs. Again, the integrity depends on the employees but since the questions will be at random, what does it matter if a candidate had a copy of the same CDROM?

The Supreme Court can even sell copies of the CDROM itself. Study at home, and then take the same exam randomized at the PBQ center. If you can answer then you have the knowledge, you have pre-qualified for the bar. It’s not really different from selling textbooks and asking the candidates questions taken from the textbook. Happy all.

Just think of the multiple flow-on benefits of this proposal, and how easy it is to implement. It’s really different when we adopt our philosophy, right? Seeing what everybody else has seen and thinking what nobody else has thought.

I have to say goodbye for the moment, and by the way, Madam Justice, I am the Street Strategist and thank you for entertaining my questions and for reading my column. As for the rest of you guys, don’t forget you learned of the PBQ first from the Street Strategist. Now go and strategize your own professions, companies, operations and your love lives.

(Thads Bentulan, July 22, 2004)

streetstrategist@gmail.com

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