By James Bowden

The United States' political system is controlled by two major political parties, one generally politically liberal and one generally politically conservative. That is the way we think of the political policy-making process: the left and the right fight for enactment of their policies and, ever so rarely, compromise. Query: what if the actual conflict implicit in the U.S. political and policy-making process wasn't the conflict between right or left, or rural versus urban, or racial, or any of the main dichotomies that we use to try to make sense of policy making. Here's the surprise: the main conflict is really generational. Presented in customary bullet-point format for your perusal:

• The Wealth Gap. Forget the 1% versus the 99%. Even the fact that the top 1% of wage earners own more of the nation's financial wealth than the bottom 50%, or that in 2007 the top 1% of all income earners in the U.S. made 23.5% of all income, more than the entire bottom 50%. The starkest statistic is the difference between the change in wealth of the old and the new generations over the past several decades. Since 1984, older people have seen a 42% increase in their net wealth while their younger counterparts have experienced a 68% decrease. I sure hope they aren't planning to take it all with them. 
• Debt and Taxes. For the past decade, tax increases have been the most-hated villain in Washington. Really, it goes back further than that. Since 1986, maximum marginal tax rates have been historically low, particularly compared to what the Greatest Generation paid. Over the same period, the U.S. debt has increased seven fold. The average baby boomer was between 22 and 40 in 1986; their prime income earning years have overlapped with an uninterrupted period of historically low taxation, over which period public debt exploded. Now the baby boomers are cashing out--the first of the baby boomers became eligible for Medicare and Social Security in 2011. They are retiring, and won't be paying in anymore. Guess who picks up the tab by default? 
• The Fiscal Battle. We saw a battle over raising the debt ceiling this summer, and are facing sequestration if the “supercommittee” that resulted from the compromise fails to agree on cuts to federal spending in excess of $1 trillion. What is on the chopping block? The big losers are defense (which is a large employer of younger workers), education (which is supposed to provide the younger generation with opportunities), and spending on programs designed to reduce unemployment (which, as discussed below, effects the younger generation inordinately). What are the sacred cows? The spending items that are bringing the committee to loggerheads are entitlement programs like Social Security and Medicare (which benefit the older generation effectively exclusively) and the possibility of raising taxes (which, as discussed above, has the effect of benefiting the older generation). 
• The Cost of Success. The saying goes that there are two kinds of good debt--debt the incurrence of which produces a positive net change in wealth. One is a mortgage and the other is student debt. The saying is getting pretty difficult to stand behind these days. Grad PLUS loans are not dischargeable in bankruptcy and guaranteed by the most credit-worthy institution in the world--the full faith and credit of the United States of America. They carry an interest rate of 8.5%. The interest rate on the last car I bought was 7.1%. That means that in 2007 a non-dischargeable, absolutely guaranteed debt carried an interest rate 140 basis points higher that a dischargeable loan secured by a depreciating asset which was likely underwater the moment it rolled off the car lot. Since then, it has gotten worse--most interest rates have dipped over the past few years, but student loan rates are fixed. A person's cost of capital for a fancy new car is lower than for an education, and the average indebtedness of a law school grad is $100,000, which buys a pretty fancy car. Or two. Or three. That is insanity. 
• The Tyranny of High Expectations. Just like every generation [allegedly] works to pass a better world on to their children, each generation is expected to make good use of the benefits they receive from the generation that went before them. I never thought I would do this, but I am going to paraphrase Cracked.com: members of the young generation were told they needed to go to school and work hard so they didn't have to flip burgers. Now that the younger generation has gone to school and worked hard, the economy is feeble, the impact of unemployment inordinately falls on them (young adults age 20-24 have an unemployment rate of 14% compared to 9% for the population overall and 7% for people over 55), and they are being criticized as entitled for ... you guessed it: not wanting to flip burgers.

By James Bowden

Welcome back, monetary policy sports fans. In round one, the U.S. clobbered the E.U. with its enlightened monetary and fiscal policies. But what about the political institutions that underlie the decisions that our combatants made when confronted by crises? Let’s take the gloves off and find out:

• Fiscal integration doesn’t work without political integration. The European Union is effectively a treaty system connecting the participating countries in an agreement to share a currency and not take on more than a certain percentage of GDP in debt, with one central bank. The United States is a politically and fiscally integrated federation of states, with one central bank. The difference is stark. Because the nations that make up the Eurozone have differing fiscal, political and social policies and positions, the only unifying factor is their currency – so if Greece’s economy falls apart, each individual nation has to perform its own risk assessment as to whether assistance is warranted. Conversely, if, say, Idaho’s failing economy was rending the social fabric of its communities, the United States would not seriously consider the possibility of doing nothing. That puts the U.S. on the board with one. 
• The Eurozone has no effective built-in checks and balances.  You know those wonderful, self-equalizing checks and balances that you learned about in grade school? The ones that balance competing interests of majority rule with individual liberty, the power of coequal branches of government, and the relationship between the states and the federal government? Yeah, the Eurozone doesn’t really have those. Since the only unifying factor is currency, the financial well-being of the constituents are directly tied to the whims of the economic center of gravity, which is Germany – an economy featuring a robust manufacturing industry, a trade surplus, and a borderline-psychotic fear of inflation. Beware, smaller European economies with real estate and tourism based economies, because the folks holding the purse strings don’t have the same interests that you do. Look at it in a constitutional sense: the U.S. apportions legislative power in a bicameral system, allocating representation by population in the House of Representatives and by equal representation per state in the Senate, with majority rule in each chamber (sort of). The Eurozone system effectively operates on a system that would be similar to California and New York making all monetary decisions for the country, and each state trying to maintain a functioning economy and government in the middle – unless the issue required unanimity, in which case Rhode Island could hold up the policy making process completely at its whim. Doesn’t sound very democratic, does it? Hurray for democracy, and hurray for the U.S.A. We win this one. 
• It isn’t your tax rate; it’s your tax collection rate. I know that Americans hate taxes, and the only good taxes are no taxes (or, alternatively, the taxes someone else pays that you get the benefit of). But the U.S. actually has an excellent collection rate; despite the relative rarity of audits and enforcement action, almost all taxes due are collected. Fraud is exceedingly rare. In Greece, tax evasion is a national pastime. No kidding – leading up to their collapse, the Greeks collected somewhere around 66% of the total taxes legally due. That’s a 33% evasion rate, and a 100% inability on the part of the government to realistically project the level of debt that the country’s economy can realistically service. Maybe it isn’t a question of law – maybe it is an issue with implementation, but either way Greece was doing it wrong. So that’s a big thumbs up to the U.S. tax system. Rare praise, I know.
  

By James Bowden

It appears that the Eurozone may have, at least temporarily, staved off the possibility of rapidly collapsing into a debt-lined, lava-filled hole in the earth with a new, comprehensive strategy to deal with the mounting E.U. debt crisis. I thought this would be a perfect opportunity to look at some of the differences between the U.S.’s and the European Union’s fiscal, political and legal systems to illustrate why the same financial crisis has led to such different results, in convenient bullet-point format: 

By Brian Malcom 

Abovethelaw.com reports that Sughrue Mion of Washington, D.C. fired 1/3 of its incoming first-year class and cancelled its 2009 summer associate program.  ATL also reports that Morris, Manning & Martin of Atlanta, GA fired all of its incoming associates and cancelled its 2009 summer associate program.

What can you do if you are a 3L with a job offer?  Don't panic.  Panic is not productive. 

Make sure you are focusing on your grades and networking.  GPA and contacts are more important now than they've ever been.  Who you know is also important in these hard times.  A foot-in-the-door will likely help a great deal these days, when law firms are being flooded with applicants and hiring has slowed.  Use your GPA and contacts to set yourself apart from the masses.

Stay happy.  Find something that makes you happy and focus on that.  Dwelling on the "doom and gloom" of today's economy only serves to stifle motivation.  The unmotivated are unattractive to employers.  Find a way to stay happy.  Spend time with your family, help those in need, travel, exercise, hang out with friends, enjoy your hobbies, etc.  Just stay motivated.

You never know when an opportunity will arise.  Stay ready.