Monday, February 2, 2009

Scrooge and Other Recommended Reading

Photo by raymaclean

Two recent pieces of scholarship should not escape the attention of our readers. First, Alireza Gharagozlou has a fun little piece coming out in the Nova Law Review entitled When did Scrooge Become a Role Model? Why Criticism of America's National Debt is Misplaced. It's a nice, basic introduction to the macro-economics of saving versus spending, written in a very lucid, accessible, and entertaining way (yes, this is an entertaining paper about macro-economics). Gharagozlou offers a rare critique of saving (at least over-saving) and explains how spending drives the broader economy. In my view, the paper gives relatively short shrift to the benefits of saving (at least on the individual level, as insurance cannot effectively address the dangers of unemployment and health care crisis to which more and more Americans are exposed today), and it mildly overstates the backstopping effect of bankruptcy (though the explanation of the purpose of bankruptcy within a capitalist system is spot on). But because the paper focuses on sovereign debt and spending, these criticisms do not go to the heart of the paper, which is a quick and well-worthwhile read.

My second shout-out goes to a paper by Gail Hillebrand of Consumers Union (the publisher of Consumer Reports). Published in volume 83 of the Chicago-Kent Law Review, Hillbrand's insightful article is entitled Before the Grand Rethinking: Five Things To Do Today With Payments Law and Ten Principles To Guide New Payments Products and New Payments Law. The strongest part of this very strong paper is its detailed discussion of the application of the Electronic Fund Transfers Act and Reg E to the panoply of plastic cards out there today. This is a topic with which I've struggled as a teacher of Payment Systems, and Hillebrand's paper does a great job of explaining why EFTA and Reg E are or are not clearly applicable in light of the growing areas of uncertainty as new products emerge (see especially the discussion at pp. 789-96 on prepaid debit cards, payroll cards, flex spending account cards, and "bank in your pocket" general spending cards). The first part of the paper also marches through the key differences among (and complaints about) the various payment devices. There's even a rare discussion of funds availability and Reg CC--how often do you see that?! For teachers and students of modern payments law, this paper is a strong buy!

While I hate to end on a sour note, I feel a duty to my fellow Payments teachers to point out an annoying aspect of the latest edition of a book I know many of us use. Ronald Mann did all of us a great favor by enlivening and bringing down to earth the study of payments law and practice in his book Payment Systems and Other Financial Transactions. I adopted the book in my first year of teaching, and I have loved it . . . until now. I still like it, but the fourth edition is a major step back. First, unlike the careful and detailed transition guide for Warren & LoPucki's book on Secured Transactions (and Warren & Westbrook's book on Bankruptcy--all of which are in new editions!), Mann's TM contains a rather weak transition guide. It refers to the third edition when it means the fourth, it refers to an incorporation of electronic commerce materials, which happened in the previous edition, not this one, and while it mentions a number of new or edited problems, it doesn't mention all of them! For example, the location of the second bank in Problem 3.1 is different in the latest edition, with no warning in the TM, and the TM discussion refers to a third location for that same bank! More seriously, Problem 23.4 (former Problem 26.4) now has four subsections (a-d), as opposed to three before, and the subsection (c) now elminates the discussion of anomalous indorsements (which I rather liked). Neither the transition guide nor even the introduction to assignment 23 in the TM mentions this (indeed, the intro to assignment 23 in the TM still indicates that problem 23.4 has three parts). Moreover, Mann has eliminated former assignments 19, 20, and 21 altogether, with no explanation. I very much liked these assignments, and students year after year have thanked me for covering this material on interest rates, usury, and pre- and late payments. Nothing is added to fill the void left by these assignments' omission (the total page count is more or less the same, it appears, thanks to more cases). In addition, while the TM offers detailed notes for how most of the problems should play out in class, for the new ones, Mann often simply notes, for example, "This problem was added for the Fourth Edition. It is designed to underscore the way that the notice requirement limits opportunistic reliance on the availability exceptions. It is a true story (with names changed)." No elegant explanation of how the law achieves this limitation, as with other problems. New Payments professors beware--the latest edition is not as user-friendly as earlier ones. And some of the problems contain funny holdover errors. On p. 23, the character's name in Problem 1.1 is Terry, while on p. 24 (in the middle of the same problem), his name changes to Tertius (his name in the earlier edition). While I'm not ready to abandon this book yet (I know others who have), I'm now on the lookout for a reasonable replacement that contains nice textual explanations of the systems and fun problems. Any suggestions?

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