My favorite financial blogger is Matt Levine on Bloomberg. My favorite course in college was called Legal Realism.
The mashup of these two personal favorites this morning – to explain my deepest fears about the election results – are worth reading.
Take it away, Matt:
The summer before I started law school, 15 years ago, I read a little book by Karl Llewellyn called “The Bramble Bush.” It’s basically a “Law School for Dummies” type thing from 1930, full of somewhat outdated advice on how to ace your classes and impress your professors. But Llewellyn was a leading thinker of the school of thought known as “legal realism,” and “The Bramble Bush” is also a major statement of that philosophy. In a famous passage, Llewellyn wrote:
“This doing of something about disputes, this doing of it reasonably, is the business of the law. And the people who have the doing of it in charge, whether they be judges or sheriffs or clerks or jailers or lawyers, are officials of the law. What these officials do about disputes is, to my mind, the law itself.”
He went on:
“And rules, in all of this, are important to you so far as they help you see or predict what judges will do or so far as they help you to get judges to do something. That is their importance. That is all their importance, except as pretty playthings.”
And then I went to law school. And I took the first-year course in Constitutional Law, and I learned about the fundamental principles that rule the United States. And I learned — or at least was given the general impression — that, while the country has not always lived up to those principles, in the long run, the Constitution has served as a wise guide and constraint on the power of our rulers, and the foundation of our system of government.
But in the back of my mind I thought about Llewellyn. I thought about the fact that those principles can’t automatically enact themselves, that they only work if the human actors in the system choose to follow them and to demand that others follow them. They persist because the people constrained by them believe themselves to be constrained by them. The Constitution, separation of powers, religious liberty, freedom of the press, an independent judiciary, the rule of law, equality of all citizens: There is a complacent sense in America that these things are independent self-operative checks on power. But they aren’t. They are checks on power only as far as they command the collective loyalty of those in power; they require a governing class that cares about law and government and American tradition, rather than personal power and revenge. Their magic is fragile, and can disappear if people who don’t believe in it gain power.
Anyway this is a financial newsletter, so I’ll tell you that S&P 500 futures were limit down at minus 5 percent overnight, before paring losses. The Fed probably won’t hike in December now. Foreign markets have had a wild ride. Treasury yields plunged, I guess an indication that default is not too imminent. Bitcoin rallied. The Mexican peso is … best not to look. Maybe everything will be fine!
Things are not ok.
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