July 2011 - Zero Plus Zero Equals Trouble

by Justice William W. Bedsworth

Some say the world will end in fire,
Some say in ice.
From what I’ve tasted of desire
I hold with those who favor fire.

Me, I hold with those who favor numbers. I think the world is going to end in some kind of apocalyptic numerical conflagration that will make the Big Bang look like stepped-on bubble wrap.

I have no idea how this is going to happen, any more than Robert Frost did when he wrote Fire and Ice. But I am thoroughly convinced our dependence on numbers exceeds our ability to comprehend them and that it’s going to turn around someday and bite us in the . . . well, not to put too fine a point on it . . . ass.

Zeroes are the big problem. We’re drowning in zeroes. We’re confronted every day with numbers so huge that we’ve lost our ability to comprehend their enormousness.1

Remember the joke going around at the end of the last administration: An aide runs into President Bush’s office and says, “Mr. President, I have bad news: 15 Brazilian soldiers from our international peacekeeping force in Afghanistan have been killed in an ambush.” To which the President replies, “That’s terrible. Horrible. But tell me, John, just how many is a Brazilian?”

That’s what we’ve come to. The numbers we’re struggling with are so big we aren’t even able to recognize their names anymore.

Ev Dirksen’s sixties’ vintage joke that, “A billion dollars here, a billion dollars there, pretty soon you’re talking about real money,” is no longer a joke; it’s become reality. We’re talking about spending a billion dollars the way we used to talk about re-paving a section of road.

We just can’t comprehend billions and trillions. Hell, judging by the contracts we’re handing out to rock bass men and second basemen, the concept of a mere million dollars seems to exceed our ability to cerebrate.

For the last decade, large-company CEO’s have been getting eight-figure bonuses. EIGHT FIGURES. As in, “Thank you for running our company this year, here’s $40,000,000 to go with your salary.”

Come on, folks. Nobody’s worth that kind of money. Nobody.

The only reason they’ve been getting it is that the Boards of Directors of those companies—made up entirely of people who hope one day to BE the CEO and get the same stupidly excessive salary—agree to give it to them, and the stockholders are unable to comprehend just how much that is.

And please don’t tell me the company needs to spend that much to get someone capable of running it. That’s just silly. There are plenty of very capable people who would do it for a small fraction of that amount and—judging from the fiscal inanities of the last few years—do it just as well.2

Nor am I convinced by the lame-o argument that “the market” dictates such salaries, so they must be right. The whole concept of an omniscient self-correcting market is that people will make rational choices in their own self-interest. The collective impact of those rational, self-interest-driven decisions will dictate supply and demand and keep the market from going seriously astray.

Which would be fine if people actually made rational decisions based on their own self-interest. They don’t. They make stupid, self-destructive decisions every day.

Ask any realtor or automobile salesman about whether people make rational decisions based on their own self-interest in making the biggest investments of their lives.

Ask the National Institute of Health if people make rational decisions based on their own self-interest on matters that will extend or shorten their very lives.

Ask a family lawyer how they do in making rational decisions in their own self-interest about their families and loved ones—decisions that will determine how much they enjoy every waking moment.

Then talk to me about rational decisions based on self-interest

You want proof? The people of the state of California, 4,206,284 of them, chose Arnold Schwarzenegger to be their governor, apparently because they liked his muscles. That was macro-self-destructive and pretty clearly irrational.

Arnold Schwarzenegger fathered a child by his maid. That was micro-self-destructive and cosmically irrational.

People make bad decisions like that all the time. The whole discipline of marketing and the entire industry of advertising are based in large measure on the self-evident fact that given the right encouragement, people will make bad decisions that are contrary to their self interest.

We all know that. And we know it’s not just other people who make such decisions. We make them ourselves.

I will buy baked goods tomorrow. I have all my life. All I need to do is look in a mirror to realize this is not promoting my own self-interest.

But tomorrow, I will buy an apple fritter. Count on it.

If you can. It appears to me we’ve lost our basic ability to count. Either that or all those danged zeroes have clouded our minds to the point where we can’t comprehend the significance of the counting.

The big news in May was that California miraculously found 6.6 BILLION DOLLARS it didn’t know it had. Great news for the budget wonks; not so great—and damned scary—for those of us who want to believe the switchman hasn’t fallen asleep.

Seems the expert economists relied upon by the state to predict its revenues had under-predicted by 6.6 billion dollars. That’s 6,600,000,000. That’s eight zeroes.

To help put that into perspective, the average California police officer makes $52,000 a year. For 6.6 billion dollars, we could pick 126,923 of our poorest citizens, make them police officers, solve both the crime problem and the poverty problem, and have enough money left over for some apple fritters.

That’s how much the “experts” missed by. Eight zeroes.

How did they make such a big mistake? Well, the only explanation I’ve heard was provided by an expert on NPR.3

He explained—so help me, I’m not making this up—that California has “a disproportionately high percentage of rich people.”

I used to feel that way myself. Until I became a rich person. Now the number of rich people in California seems about right to me.4

The NPR guy explained that rich people rely not so much on salaries as on investment income.5 And because they are rich, we never know what they’re going to do with that income. 

In this case, they seem to have chosen to realize the income, so we’ve been able to tax them on that realization, and—presto change-o, abracadabra—we ended up with an unexpected surplus of hundred dollar bills.

In other words, we looked behind the couch cushions after Justin Timberlake and Barry Bonds dropped by, and there it was: $6,600,000,000.

Voodoo economics has become a redundancy.

And it’s affecting our judicial system. I heard a lawyer a few weeks ago lamenting the fact he was being “dragged back into court time after time over a $30,000 fee award.”

The implication was clear: he couldn’t believe anyone was expending so much effort over such a trifling amount.

I’m sorry. Thirty thousand dollars is—to borrow from Ev Dirksen—real money to me, and I think it should be to our profession.

I’ve been blessed both to have grown up blue-collar and to have worked with and before generations of lawyers and judges who appreciated zeroes. Men and women who had been through a Great Depression and a war that required rationing took decimal points seriously and taught me to.

I got hit with a three thousand dollar dental bill last week and I’ll probably be in a blue funk about it until the Cal-Fresno State game.6 Three thousand dollars isn’t going to delay my retirement or cause my kid to drop out of law school. But it’s a big chunk of change. 

And we need to focus more on those three- and four-zero amounts. We need to start listening to politicians and commentators . . . and plaintiffs and defendants . . . when they talk about numbers, and we need to give some serious thought to how many zeroes we’re willing to tolerate.

We need to think about it like it’s our own money. When it’s our own money, it takes fewer zeroes to get our attention.

We need to re-dedicate ourselves to the three- and four-zero numbers now. And we need to educate our colleagues and our children to that re-dedication.

Because as long as there are people in the world to whom $30,000 is a nuisance rather than a year’s tuition7, as long as there are people who think it’s beneath them to work up an honest sweat over $30,000, there will be people willing to run up trillion-dollar national bills.

Frost saw fire or ice. I see numbers.

Beds Notes
1. And allow me to indulge one of my pet peeves here. “Enormity” is not the noun form of “enormous.” An enormity is a wicked or outrageous moral evil. “Enormity” does not convey size, it conveys depravity. Please don’t file any more briefs complaining of the “enormity of the award”—at least not without recognizing the hyperbole involved in such a complaint.

2. I, for example, would have driven Lehman Brothers off the cliff for a mere $5 million. Less, if I got good dental.

3. I didn’t catch his name, but he was on NPR, so he not only has to be an expert, he has to be an egghead.

4. And make no mistake, I AM a rich person. I make over $200,000 a year. My father was a casket-maker. I know the difference between rich and poor, and I am clearly rich. Anybody who tells you different does not understand zeroes.

5. Obviously, his definition of rich people is different than mine. So was John McCain’s; he came to Orange County and said the rich were people who made over $5 million a year. John McCain’s a smart guy and he clearly doesn’t understand modern numbers either.

6. That’s September 3 for those of you whose value system is so badly warped that you don’t recognize the cosmic significance of Cal football. No one appreciates zeroes like a Bears fan.

7. And don’t even get me started on the zeroes our billion dollar bagatelles are adding to our children’s tuition bills. 

William W. Bedsworth is an Associate Justice of the California Court of Appeal. He writes this column to get it out of his system. He can be contacted at william.bedsworth@jud.ca.gov.