The Chronicles of a Capitalist Lawyer

American law firms never cease to amuse me. After working together with other firms in producing a 40 pages comment to an SEC regulation , now Davis Polk & Wardwell LLP, a very respectable US law firm provides an impressive 279 pages of financial crisis manual. You can read the manual here and its quick summary here . In general, it discusses the current regulatory issues related to the US financial crisis and the effect of such regulations to US financial institutions. I haven't read the manual, but the table of contents shows a very promising product. Nevertheless, the most interesting part of this manual is not about the content or the quality of such manual as I am quite sure that the manual has been prepared in a professional manner, but the fact that 21 partners and counsels of Davis Polk are the ones that have prepared this manual. Given the latest news on how US law firms are trying to survive in the crisis, I have no doubt now that the crisis has really affected s

Okay, I know that this blog is made for common readers, but I guess that writing a subject on legal theory and legal philosophy once in a while wouldn't do much harm. Besides, I cannot resist the temptation of writing this post. While Hans Kelsen is known as a prominent jurist and a worldwide respected legal scholar, he could also hold the first rank of the most misunderstood legal scholars of all time. There are so many critics to his legal theory (known as the " General Theory of Law " and the " Pure Theory of Law ") that in some cases, his name and theory are recorded in law text books only for the sake of being criticized. Of course, this doesn't mean that his theory is less regarded than other legal theories since debating and criticizing are very usual in a well educated community. However, I feel that those critics are not the result of a correct understanding of Kelsen's theory. Instead, such critics were made on a false ground, a misunderstand

All right, it has been a while since my last post. I guess I can blame my excessive office workload (made a whopping 64 billable hours last week or more than 12 billable hours a business day) and the Id Mubarak holidays for this blogging non-productive period, eh? In today's post, we will discuss a very interesting issue that has been debated for centuries without ever being finally resolved, even until today. Yes, we are talking about the validity of the claim that there is an eternally just law in this world that can be applied in whatever situation and condition, an everlasting law that will prevail over any other laws. Now, is this claim valid, i.e. do we, humans, have this kind of law? Sorry to say, but my quick reply would be no. In my opinion, there is no such thing as an eternally just law, because those that are being called just as of now could turn into unjust the next minute. As long as we don't have a single, complete, and universally acceptable definition of

I have grown tired with the absurdity of some of the laws that have been passed recently by the Indonesian House of Representatives (" DPR "), particularly the laws on film and electricity (thanks to Mova for the link on Electricity Law). I won't make a review on the new Film Law as Rob Baiton has made an excellent summary and review on such law in his post here . So, I'll go with the new Electricity Law instead. The Current Nature of Indonesian Electricity Business Now, before we go forward with the review, we need to understand the nature of electricity business in Indonesia. First of all, in Indonesia, and probably in the majority parts of the world, electricity has been considered as a public utility, which means that it is also a political commodity. I'll discuss further below on the implication of electricity status as a political commodity. As you might be aware, there is only one electricity provider in Indonesia, PT PLN (Persero) (" PLN &q

Today, the Constitutional Court issues its decision on the Judicial Review of Article 46 Paragraph 3 (c) of Law No. 32/2002 on Broadcasting (" Broadcasting Law ") which basically deals on the constitutionality of the provision of a Law that allow cigarettes advertisement in broadcasting media. You can see the complete 306 pages decision here . The constitutional claim was made by among others the National Committee of Child Protection and the Child Protection Agency of West Java. From my quick reading of the decision, I can conclude that the main target of this claim is to banish all type of cigarettes advertisement in Indonesian broadcasting media by claiming that the above provision of the Broadcasting Law is contravening with Article 28B paragraph (2) (the right of each child to live, grow, and develop, and to earn protection from violence and discrimination), Article 28A (the right of each person to live and maintain its life), Article 28C paragraph (1) (the right of

Let me start this article by explaining the basic concept of the Negative List. It is a regulation issued by the President of the Republic of Indonesia stipulating the area of business which are opened (with certain requirements) or closed to foreign investment in Indonesia. The main reason for Indonesia in having this Negative List is to close or limit any foreign investments in industries which: (i) are being prohibited in Indonesia, such as gambling; (ii) are being considered as strategic for the interest of Indonesia; and (iii) are being reserved for small to mid scale business players. In short, except for point (i), the Negative List can be considered as a protection mechanism imposed by the Government of Indonesia. Is it good? I must admit that I'm not a huge supporter of the Negative List, as I don't believe that restriction of ownership would be effective to protect the what so called interest of the people of Indonesia. Up until today, it is generally assumed tha

Here is a long and nice article on the current macroeconomics issue by Paul Krugman. I must admit that I share the same view for some of his thoughts, particularly with respect to the misuse of economic models to explain the world and the argument that the market is perfectly efficient and can always maintain that condition. For further discussion, you can see my post here on the issues of Capitalism. To cut it short, I never believe that someone can explain how the market works through some sophisticated mathematical equations and models. Of course you need to make some calculation in economics, but don't expect that everything will work perfectly in accordance with the calculation, there are too many factors which are affecting the economics performance. Now, let us move to today's main theme. What exactly is Ketchup Economics? According to Mr. Krugman, this is related to the assets valuation method use by finance economists in determining whether asset prices are reasonab

I'm quite shocked with this piece of letter , especially because it was published in the New York Times. What's wrong with being a highly paid lawyer? Is it that bad to work as a lawyer in the United States? How come the shortage of job with high salaries is good for the development of law graduates? And, the most important question is, how on earth can someone made a claim like this: " as the jobs with large salaries disappear, law students will draw on the thoughtfulness, intelligence and perseverance that got them into law school in the first place in order to find employment that they actually find rewarding ." Is he trying to say that having a career as a lawyer would cause law graduates to lose their thoughtfulness, intelligence and perseverance??? Pardon me sir, but among many types of career that can be pursued by a law graduate, I find that being a lawyer provides the biggest opportunity for a law graduate to maintain and increase their thoughtfulness, intel

In my post dated 26 August 2009, we have discussed the basic concepts of Libertarian Paternalism, introduction to better policy making, and examples of human errors with respect to daily economic activities. Today, we will discuss some useful guidelines in making better policies and how to implement such guidelines in actual life. The Six Guidelines of Better Policy Making According to Thaler and Sunstein, there are 6 basic guidelines for better policy making: Expect Error; Defaults; Understand Mappings; Give Feedback; Structure Complex Choices; and Incentives. Each will be further discussed below: 1. Expect Error I guess this is the first guideline to be considered by policy makers. Since most men make mistakes, a good policy will consider such fact and will ensure that the mistakes can be fixed in the easiest way. What is the actual implication of this guideline? While governments or private institutions can try their best to design a good policy, they must be