Monthly Archives: September 2009

Citizens Insurance May Be Bad, But Consider the Alternatives

Beatrice Garcia has an article in today’s Miami Herald about Citizens Insurance company, the state-sponsored home insurer of last resort for those of us in the hurricane belt. See Is Citizens Insurance ready for the big one?

Citizens is known for its high rates, DMV-quality service, and for being under-capitalized. It is not much fun to deal with, but then neither is my bank. (Which, come to think of it, is also state-capitalized these days.)

The article does a good job of noting some of the issues with Citizens:

Citizens is the largest insurer in Florida, covering 1,057,829 homes, condos and apartment buildings. The biggest chunk of its policies — $232.1 billion worth — are written on riskier, coastal properties.

Insurance regulators, legislators and critics of Citizens say the company's frozen rates aren't actuarially sound. In laymen's terms, that means the insurer is not bringing in enough money through premiums to cover the bulk of the potential losses it could face after a huge storm.

To get Citizens' rates back on course, a law passed in May requires the insurer to raise rates 10 percent a year over the next five years. The smaller annual increases soften the rate shock for homeowners. But eventually, rates could end up about 60 percent higher.

But Citizens isn't totally in dire straits. The insurer should have nearly $3.9 billion in cash in the bank by the end of the year, says Binnun.

Add in a guarantee from the State of Florida to buy $750 million of Citizens bonds, a bank credit line and proceeds from municipal bonds it has already sold and the total of available funds comes to $6.9 billion.

Citizens also buys back-up insurance from the Florida Hurricane Catastrophe Fund to cover some of the losses it might face. This year, it purchased nearly $9.8 billion in coverage.

All that gives Citizens the ability to cover up to $16.8 billion in claims.

But even with all the funds it could tap, Citizens could fall short if “the big one'' — that one-in-100-years storm — hits the state. Such a storm could rack up claims totaling about $22 billion, Binnun says.

In other words, Citizens need to save up another $3.2 billion — about double what it will have in the bank by the end of the year –- in order to be actuarially sound. That’s a lot of money, but if it could save that amount since its founding in 2002, it should be able to pile it up in a few more years. Unfortunately, it's going to do that by raising our already quite substantial insurance rates some 10% per year until the money pile is big enough.

The Herald article more or less assumes that private insurance would be better, although it notes that some private policies have coverage limitations.

As it happens, I have a Citizens policy. Over the last three years I’ve had two letters from private insurance companies announcing they were taking over my policy unless I opted out (this was a state plan to encourage people to leave Citizens). One look at the capitalization of those companies and I opted out. In addition, my insurance agent has sent me proposals from three or four private companies, all but one of them started recently under the new Florida law encouraging companies to enter the market. None has a track record. None has much capital either. They are not rated by any of the major rating agencies (except one, that had a not-so-great grade of BBB-). They have their own ratings bureau, one which says they are just fine thank you, but it's not one I feel any reason to believe.

Unfortunately, in this era of light regulation private insurance is not inevitably better than public; indeed, I think some of these new tiny companies may be worse. This is, in fact, the ironic implication of a new analysis of the state home insurance market from the Competitive Enterprise Institute which shows how poorly capitalized the new private insurers really are. (CEI is not a source I’d rely on uncritically, but it confirms what I’ve worked out myself from looking up reports on the new Florida-only insurance companies. For more see Florida insurance numbers deceive and Consumers cry foul over Citizens' shift to low-rated firms.)

From the point of view of the homeowner, private insurers also have a degree of political risk that Citizens lacks: If they go belly up, the state has no moral obligation to bail them out — on the other hand, we have good reason to believe that at the end of the day the state (or the taxpayers) will stand behind Citizens.

I turned down my insurance agent’s suggestion that I go private, even though the proposed rates were a few dollars lower than what Citizens charged. My agent was all for it, claiming the service would be better (no word on the relative commissions!). The risk seemed too great.

Posted in Econ & Money, Florida | 17 Comments

Google Mind-Powered Search Engine

I was recently directed to the Google Mentalplex, a way of searching for things by projecting mental images into the computer.

It's been around a while, but it's slow, and you have to remove your glasses for it to work, which is probably why it's not more popular.

Posted in Completely Different | 3 Comments

UM Tax LL.M Alum Nominated for Top Tax Post

They're crowing over there at the Tax LL.M and in the Dean's office, because President Obama has nominated Michael Mundaca, LL.M. ’97, to serve as Assistant Secretary of the Treasury for Tax Policy.

The official UM Law release says in part,

“This is the most important position in tax policy in the United States,” said Dean Patricia D. White, a tax scholar. “We are delighted to see a graduate of our LL.M. program succeed in this way.”

Reacting to the appointment, UM Law Professor George Mundstock, who taught Mundaca, said, “One of the great things about being at the University of Miami is that the city and university help us attract such interesting and talented students. Michael was a remarkable student who took advantage of all we have to offer. We are proud of his achievements.”

Before his appointment in the Treasury Department in 2007, Mundaca was a partner for five years in the International Tax Services group of Ernst and Young in Washington, D.C. Before joining Ernst and Young, Mundaca served for over five years in the Treasury's Office of the International Tax Counsel during the Clinton Administration.

He received a B.A. in philosophy and in physics from Columbia University in 1986, and an M.A. in philosophy from the University of Chicago in 1988. Mundaca also received a J.D. from the University of California, Berkeley, School of Law in 1992, and an LL.M. in taxation (international tax specialization) from the University of Miami.

Professor Frances Hill, the Director of the UM Graduate Program in Taxation, said, “Mr. Mundaca will play a critical role in the international tax reforms at the heart of the Obama Administration’s tax agenda. We are very proud of Mr. Mundaca’s professional accomplishments. He is an inspiration to our current students, many of whom are interested in public service.”

Mr. Mundaca replaces my former co-clerk Beth Garrett of USC as the Obama nominee for the job; Beth withdrew her name at some point as the confirmation process dragged on and on. Here's hoping that they manage to wrap things up more quickly this time.

Posted in U.Miami | Comments Off on UM Tax LL.M Alum Nominated for Top Tax Post

Taylor Branch Has the Clinton Tapes

Who would have guessed that Taylor Branch —Taylor Branch — had umpteen hours of secret tapes of Bill Clinton during his Presidency chewing over his plans and setbacks. History narrated as it happens by a master (but exhausted) talker. And now it's going to be a big book: The Clinton Tapes: Wrestling History with the President.

It seems that Branch — an amazing historian and writing — had been friends with Clinton in their salad days, but they had drifted apart. Then Clinton pulled him back into the orbit, in the hopes he would become the court historian. And from the sounds of it, the President got both more and less than he wanted.

Posted in Politics: US | Comments Off on Taylor Branch Has the Clinton Tapes

Ten Reasons Why You Should Teach Here — And Three Why You Shouldn’t (v. 3.0)

There is an updated version of this post at Ten Reasons Why You Should Teach Here — And Three Why You Shouldn’t (v. 4.0).

At the request of the Chair of the Appointments Committee, I am updating and republishing this note on teaching at UM. This marks the third annual appearance of this memo, which by US standards makes it a tradition.

For reasons explained below, we have a dozen new slots to fill, plus some replacements — so despite the economy, we’re hiring, and may be hiring a lot.

Ten Reasons Why You Should Teach Here — And Three Why You Shouldn’t (v. 3.0)

1. Faculty

The best reason to come to U.M. is the faculty. At its best (which is to say, “outside of faculty meetings”), this is a faculty that believes ideas are serious things, but also is willing to play with them. You will see this most vividly at faculty seminars, especially those with external speakers. The faculty reads the paper in advance of the talk. It thinks about it. We don’t let the presenter speak a long time — we want to have a discussion. There may be an element of performance in the questions and comments, but that usually just adds to the fun. Unlike some faculties I’ve heard about, we are not worshipers at the temple of sub-disciplinarity: faculty members feel comfortable commenting on papers far outside their own specialties, and they are usually right to do so as the distant perspective sometimes proves at least as valuable as the insider’s. Visiting Professor John Flood gives a good description of the Miami seminar experience in Giving Papers at Miami (2008).

While faculty vary in the extent to which they will seek you out — some are shy; others are busy — they will almost all be happy to see you if you seek them out. If you are an entry-level hire, very few will treat you like a junior colleague; for most, you will be part of the family from the start. (That goes without saying for the more senior hires.) And it’s an interesting family, including some big names in international law, arbitration, tax, law and society, law and identity, and several other subjects.

But don’t take my word for it.  Here’s what one of our more recent hires, Charlton Copeland, said a couple of years ago about his initial impressions of UM Law:

The faculty stood out for me at the AALS recruiting conference as one of the most intellectually engaged faculties with which I met over the weekend. They actually were interested in my writing projects, and gave me the sense that they took them and me seriously. My time with the committee ran out too quickly for me. My feeling of intellectual comfort with the faculty was only enhanced during my visit to the campus later in November, but that was augmented by my delight that this would be a group with which I’d be comfortable beyond simply discussing scholarly work. They were a bit quirky, and in a way about which I am excited. I am excited about the diversity of the city of Miami as well, and the opportunities that I think it will provide me to think about my areas of research in new ways — ranging from race and the the law (where the Law School has long been at the forefront in American legal education) to comparative separation of powers issues in Latin America.

2. Institutional style & institutional support

UM wants productive faculty, and it believes in research. But it isn’t about telling you what to do. My own story may be instructive: I was hired thinking that I would be writing mostly about administrative and constitutional law. In fact, however, within a couple of years I had turned into an Internet lawyer, and was writing primarily about computers, networks and the law. At no time did anyone here ever suggest that this was a problem. What mattered to people was that I was publishing.

Another way in which UM may differ from some law schools is that our faculty is routinely interdisciplinary and international. Many publish in non-legal journals — a fact which does not necessarily help either our publication or citation counts since the legal tabulators tend to focus only on law journals. Although we recognize that there may be some reputational costs, we are not prepared to tell people where they should publish. We just want it to be good.

There is no international ghetto at UM (the same is true of tax, a traditional faculty strength). As a matter of unwritten policy, everyone is expected to teach a basic course outside their specialty; the result is both that we can have more internationalists (and tax scholars), and that there’s a much greater community of overlapping interests.

3. Library

The University of Miami enjoys a superb law library, the result of a decision more than three decades ago to make library acquisitions a financial priority. And if we don’t have it, the library will borrow it for you, no questions asked. (As one former librarian put it, “we aim to provide law-firm-quality service”. And in fact, it is almost as good as a top law firm, and the librarians are much nicer.)

The law library has extensive holdings in related disciplines, notably political science, and of course the university library is literally next door, and it also has ever-growing electronic access to journals — which can even be accessed from your home office. We have a particularly strong collection in Latin American and Caribbean law, but also strong holdings in European law. We are weak in India, China, and Russia, and no doubt several other countries with non-Romance alphabets, so if your research involves heavy use of materials from one of those countries, you should check to see if we have you covered. I also have a sense that our holdings for pre-1940 materials are not as strong generally as for things published in the last 70 years. But I am continually having pleasant surprises when I consult Baron, the online card catalog. They’ve done some impressive buying over the years — which is a good thing, as the next major law library is a long way away.

4. Students

We have smart students with upwardly mobile ambitions. Some come from wealthy families, but for many a law degree will be the highest level of education ever achieved in their families — a matter of pride for an extended clan you may have the good fortune to meet at graduation. Despite the lures of nearby South Beach, UM students are by and large a studious lot: their awareness that few silver platters await at graduation usually translates into a commendable work ethic. At least until the end-of-term fog settles in, I find that my students have done the reading, and often have something to say about it. There is a little shyness — some students don’t want to ask questions for fear of looking silly; other students worry about being labeled a “gunner” — but ordinarily class discussion can be pretty lively. Although we have more men than women as students, it is often the case that the women lead the discussions and make the most substantive contributions. Classes tend to be fun (at least for the instructor). Visiting professors from other law schools consistently remark on the high quality of classroom performance here.

The UM student body has improved greatly in the past decade. Our best students would be at home in any law school. Our worst students would have been near the middle of the class 15 years ago. The only fly in the ointment is that despite their good college grades and creditable LSATs, a substantial fraction of the class comes to law school unable to write as well as they think or speak. Overcoming this obstacle remains one of our biggest challenges. That said, every year we have students who write publishable papers in classes and seminars. It’s been a particular pleasure to see those pieces go into print along side those of full-time academics.

Some of our students will go on to be national leaders; a much larger number will play key roles in the State of Florida, as judges, politicians, and leading members of the bar. Some people have described alumni reunions as state judges’ conventions, but this is slightly unfair. On the other hand, there’s no question that both Florida as a place, and UM graduates as important players in that place, have been at the center of major wrangles with national impact ranging from the 2000 election to the Terri Schiavo affair.

Aspiring faculty sometimes worry that they will not find good research assistants outside a top ten law school. It’s true that I don’t hear stories about students writing papers that professors then publish under their own name — as I did when I was a law student at Yale. But if you are looking for a research assistant rather than a ghost writer, then my experience suggests this is not a serious problem if you teach a first-year class. As a teacher in the larger first year classes you can identify the students who are good and who fit your style before they get too caught up in other things. Some of them will get on law review, and will be too busy to work for you; some of those that don’t will work downtown for higher pay than the law school can offer, but usually there’s someone you will be happy to have who will be happy to have the job in their second or third year. I can’t claim that every research assistant I’ve had has been stellar, but I can say that some of them were amazing — and that they are harder to find when I don’t teach first years. (And, despite not teaching a first-year class I had an amazingly good RA this past summer…and then lost her to the law review.)

5. Research support

Research support exists to make it easier for you to write. The most important part of UM’s research support is its excellent law library. But it doesn’t stop there: In addition to the collection itself, we have a staff of helpful law librarians who seem happiest when given difficult research requests. There’s a document delivery service which will get you any book or article you ask for and deliver it to your office within a day if it’s on campus or a few days if it must be sent from far away. (One down side: you can gain weight from the loss of movement caused by having everything come to you.)

At conferences I sometimes hear stories about places where senior colleagues try to tell tenure-track faculty what to write about (or, worse, forbid certain topics or styles). We don’t do that. If anything, we have erred in the other direction — tip-toeing around junior faculty sensibilities so much that we may have provided insufficient mentoring.  In an effort to do better in that department, the faculty now enjoys the services of a “director of faculty development” — yours truly for the third and probably last year in a row— whose job it is to help colleagues (and especially pre-tenure colleagues) with their research and writing by identifying resources, serving as a sounding board, or just staying out of the way.

In addition, every faculty member has an office budget which allows you to hire a research assistant, books and supplies, and to travel to conferences. Each of these budgets is fairly generous, and the Associate Dean has discretionary funds to add to them up for good cause. In my experience, any cause I can bring myself to ask about has been treated as a good one.

6. The University

A generation ago it was “Suntan U”. Today, under the (very) energetic leadership of Donna Shalala and an impressive suite of Deans, the University of Miami is joining the ranks of the leading research universities in the USA. For openers, President Shalala raised $1 billion for the University. YES, $1 BILLION. Now that it’s in the bank, she’s warming up for a new round of fund-raising. The lion’s share of the first round went to the medical school, but we are told that the law school should be able to claim a bigger share of the next round — and we’ll need it because we’ve also been offered a chance to build a brand new building on a prime location on campus that is already zoned for construction (trust me, that matters).

More importantly, the past couple of decades have seen a transformation in the quality of both the students and the faculty in the arts and sciences. It’s become hard for students to get in; and departments such as History, Psychology, Business, and Sociology have attracted faculties that include a wealth of potential collaborators, adding to existing strengths in Medicine and Communications. Both the law school and the University encourage inter-disciplinary collaboration. The law school has begun to take advantage of these resources but there’s much waiting for you that remains untapped.

7. Perks

The law school wants to support your research, and we try to put our money where our mouth is. Entry-level faculty can apply for a summer research grant before starting work in order to prepare their courses. We light-load you (usually only one course per semester) during your first year to give you time to find your feet. You’ll get a summer grant as of right every summer until tenure to encourage you to write — after that you’ll have to submit proposals, and make good on them too. And you’re entitled to a semester’s leave before tenure, more or less in the term of your choice, in order to help you write.

The law school is located on a very beautiful campus in the center of suburban Coral Gables, itself a very pleasant city with excellent restaurants. Rumor has it that in the old days the university administration spent more on landscaping than books; whatever the truth, there’s no question that the campus is very nice to look at. It also sports a state-of-the-art gym that’s about three minutes walk from the law school around our picturesque lake (crocodile optional). The campus sports other useful amenities, including a faculty club, a food court, and an on-campus daycare.

8. Miami

Miami is a cosmopolitan city. Part of its identity is as the defacto capitol of Latin America; part is as an artistic and musical center; and then there’s the celebrity-and-tourist thing. It’s an attractive place for young and old, and — if you take care to live in the right school districts, or have kids who qualify for the right magnet schools, or are ok with private schools — a pretty easy place for the middle-aged pater and mater familias. Like many sunbelt cities, Miami is more sprawling mosaic than urban core and periphery. Both urban and suburban living are within easy reach of the campus. Our politics are fascinating and complex, with much political power held by first and second generation immigrants from Cuba, and to a lesser degree Haiti, and Central America. The region now enjoys a lively cultural life, with a rich music and dance scene and some creditable small theater companies. If you prefer nature to culture, there’s always the nearby Everglades as well as world-class coral reefs for diving just south of Miami.  And one of my colleagues sometimes totes a surfboard.

If your work involves domestic issues, you will find them in Miami, which is the city of the future in ways both good and bad. Along with our glitz you will find us on the cutting edge of today’s and tomorrow’s political and social issues: immigration, environmental (think “Everglades restoration”), medical (think “retirees”), and all the social questions that big cities produce.

Housing costs are plummeting, many other living costs were already low, and there is no state income tax.  The University no longer offers new hires a deal in which the university will subsidize part of your home purchase in exchange for a proportionate share in the equity when you sell, but given what’s happening to prices around here, you’re still better off as a buyer today.

Did I mention how pretty it is here? Visitors are often stunned by the place, especially in winter.

9. Weather

Miami’s weather is glorious for almost half the year; variable for another chunk, and miserable in the dog days of summer and early Fall. The good news is that much (but not all) of the miserable part comes when the law school is not in session, so you can escape if you choose. When the weather is nice, our central courtyard, the “bricks,” becomes the social center of the community, a place where students and faculty mingle between classes. Even office rats like me end up looking healthier than the wan, pale, parka-clad figures I see huddling on the Boston subway. For those with outdoor ambitions, you can live on Miami Beach, or just enjoy the sea view from a balcony in a tower apartment in downtown Brickel.

10. The revolution is here — and we have a great new Dean

In last year’s edition of this memo, I wrote that the “revolution is here”.   Well, it’s even more here now.

Two years ago we undertook an unusually detailed and painstaking strategic planning exercise. That caused us to recommend a radical transformation in the faculty, and perhaps the style, of University of Miami School of Law. The biggest event of last year was the our Interim Dean sold this idea to the central administration. President Shalala made her commitment to a dramatic increase in the size of the law faculty, and to help raise funds for our new building, the centerpiece of her recruitment of our new Dean, Patricia White.

At present we have about half a dozen faculty under 40, only a few more between 40 and 50, another dozen or so between 50 and 60; the single largest group — well over a dozen —  are over sixty, including some well over sixty. Our hiring is resolutely in compliance with the Age Discrimination in Employment Act (of our last nine entry-level hires, two were very experienced lawyers well over 40), but given the overall composition of the entry-level market, it is likely that this age profile will change dramatically in the next few years.

But more than simply replacing faculty as they retire, we plan to do something dramatic: not just fill empty lines (and we have a few) but hire twelve new faculty in the next few years. What this means for our new hires is that they will find themselves at the heart of their new community — and have a chance to lead it — much earlier in their careers than they might otherwise.

Today, the law school enjoys a nearly unique chance to reinvent itself, and people with ideas and energy should find all the breathing room and opportunity they want.   We ‘ll create a host of new Centers and Institutes — several are already in advanced stages of planning.  We’ve created a new Immigration Clinic this year and there is talk of more. We’ve figured out a quick, temporary, fix to the classroom space shortage by getting some classroom space outside the law quad). We’re going to change some (but only some) of the ways we do teaching.  We’re going to ramp up the scholarly enterprise by having more talks, more conferences, more happenings.  And we’re going to be open to your new ideas.

Dean White thus arrives with a mandate to transform the law school. She comes to us from a successful deanship at ASU. She’s already shaken up the way we do things — I don’t have to serve on any committees this year!!! — and the year has barely begun. Next up are programs to create greater interaction with the University as a whole and deep collaborative relationships with certain schools and disciplines.

Oddly, the financial crisis works in our favor: the law schools hardest hit are those that depended on substantial endowments, and saw the value of their portfolio shrink; we’re not one of the rich law schools, and our endowment income was only a small fraction of our budget; the losses don’t affect us as much as they do some others. So far at least, we plan to start a major campaign for our new building more or less on schedule, with the idea we’d move in some five years from now.

Thanks to the central administration’s backing, and the fortuity of events, we have a chance to do some major hiring while making other transformational changes. With the help of the right people, it could be exciting.

 

*** 

All that is very well, but honesty compels me to say that there are also some reasons why not everyone may be happy here. Indeed, there are three main reasons why you should not teach here:

1. Weather

If skiing is your passion, and neither waterskiing nor snorkeling are substitutes, then Miami may make you sad. It’s hot and very humid here from July until the heat breaks sometime in October or September. That means you can have up to three and half months when it’s not much fun to go outside. Plus, occasionally we get weather with a name. But we don’t get snowstorms, avalanches, wildfires, earthquakes, random tornadoes, floods, or mudslides. If you want immunity to natural disasters, move to Rhode Island.

2. Language

Many people in South Florida speak Spanish as their first (and often only) language. The campus is Anglo — although some of the bilingual staff and students will speak Spanish to each other — so this is not a work issue. But it is a life issue: you will hear lots of Spanish in the stores and on AM radio. If you are the sort of person who can’t cope with foreign languages around you, there’s a strong chance you will not be happy here. I don’t speak Spanish, and I only found it a noticeable handicap for my first few weeks here, when I would get lost driving around and stop at a store for directions, then wait impatiently while they went to find the English-speaker. It’s a non-issue today unless I happen to go bargain shopping for some exotic household good, and indeed contributes to Miami’s cosmopolitan vibe.

3. Geography

It’s flat here — no mountains (and houses have no basements). More seriously, it’s also far from many of the legal nerve centers. If you’re doing national work and you are having meetings related to it, odds are the meeting will neither be in Miami nor even within driving distance. That means air travel. And while we have great direct air connections to most of the world and the law school is generous with travel support, we do not have a working time machine. Given the post-9/11 security regime at airports, and the increasing vagaries of air travel generally, it is rarely possible to have a meeting in New York or Washington without spending the night out of town. That can mean having to reschedule a class (something we allow for good causes), which is a pain for you and even more of one for your students. It certainly means that doing national committee work is always a substantial time commitment. It is almost 500 miles to the state line, and then where are you? Somewhere between Tallahassee and Moultrie, Ga.

 

 

*** 

This year I am not on our hiring committee. We’re searching for both entry-level and experienced scholars. (And we’re also inviting groups of scholars who think they’d like to collaborate, or maybe found a Center, to apply as a package.)

Whichever group you fall into, if you find the positives outweigh the negatives and have an interest in coming here, I’d be happy to try to answer any further questions you might have, either in comments to this entry or by private email. Get in touch, or contact the Chair of our Appointments Committee.

Posted in Law School, Miami | 6 Comments

Watching Too Much Star Wars?

One of my colleagues blogs that The City Beautiful deploys imperial probe droids. He's got a photo to prove it, too.

“The City Beautiful” is Coral Gables's modest name for itself.

Posted in Miami | Comments Off on Watching Too Much Star Wars?