i The Frugal Law Student | 2007 | February

Law School
Personal Finance

Financial Lessons From the Casebook: The Commerce Clause

Written by Brett McKay


Last week in Constitutional law, my class discussed the Commerce Clause. To my surprise, I gleaned a financial lesson from the Commerce Clause.

The Commerce Clause is found in Article I, Section 8, Clause 3 of the Constitution. It gives power to Congress to regulate interstate trade. It says:

“To regulate commerce with foreign nations, and among the several States, and with the Indian tribes.”

This statement, like most statements in the Constitution is vague. What is “commerce”? And what does “among the several states mean”? Throughout our country’s history the Supreme Court has interpreted the Commerce Clause either narrowly or broadly.

We’ve entered an era when the Supreme Court is taking a more narrow approach to the Commerce Clause, thus limiting Congress’s power to regulate interstate commerce. The modern test in order to determine if a statute falls under Congress’s Commerce Clause power is broken down into a three parts.

  1. Congress can regulate the channels of interstate commerce. This means congress can regulate the terms and conditions on which goods and services are sold. They can restrict the types of goods that can be shipped overstate.
  2. Congress can regulate the instrumentalities of commerce. This consists of trucking, air travel, and shipping.
  3. Pursuant to the necessary and proper clause and commerce clause, Congress can regulate any economic activity that has a substantial relation with commerce or substantially effects interstate commerce.

The third prong of the test is where the financial lesson comes from. If an activity is economic, you can aggregate the activities done on a national level to show that it is substantially related to interstate activities. Huh? An example will clarify this.

Let’s say Congress passes a law regulating the amount of wheat farmers can grow. The purpose is to increase the price of wheat to help farmers. Farmer Joe goes over his limit and is fined. He takes his case to court and claims the statute is unconstitutional. The court will ask if the activity is economic in nature. Farming seems like an economic activity. Now the court asks does it substantially affect interstate commerce. Of course Farmer Joe’s violation alone will not have a substantial effect on the national price of wheat, however, if every farmer in the country were to go over the limit just a bit, all those violations taken together would have a substantial effect on the price of wheat. Because farming is an economic activity and the aggregate of farming violations would have an effect on interstate trade, Congress can regulate wheat production. Thus, the statute is constitutional under the Commerce Clause.

The financial lesson I pulled from this is that little things can add up to have a substantial effect on you financial life. A few dollars invested here and a pennies saved there can add up and substantial effect your balance. Look at your financial decisions in the aggregate. By taking this big picture view, you’ll see that even small steps can have a major impact on your account in the long run.

A Whole New Mind: Wrap-up

Written by Brett McKay

I really enjoyed A Whole New Mind and I highly recommend that law students read it. I think lawyers, particularly young one’s can benefit greatly from putting what Pink suggests to practice in their careers.
The law field is changing along with the rest of the economy. Success will require new skills. L-directed thinking is no longer sufficient. Success in this high concept world will require R-directed thinking. Here’s a list of the series’ posts.

Part 1: Overview

Part 2: Design

Part 3: Story

Part 4: Symphony

Part 5: Empathy

Part 6: Play

Part 7: Meaning

Tightwads and Spendthrifts Are Both Screwy, in Different Ways

Written by Brett McKay


Personal finance blogs often rail against compulsive spending. It makes sense. If you want to have more money, you have to spend less. Often these compulsive, or spend-thrifty individuals have to overcome messed up ideas about money. They have to completely rewire their brain in regards to money.

But what often gets overlooked are the individuals in the opposite of the spending spectrum- the tightwads. Tightwads also have messed up ideas about money and their screwy ideas can create stress in their own lives and the live of their loved ones.

In this month’s issue of Men’s Health, an article features observations about people and money from behavioral scientist, George Lowenstein. Dr. Lowenstein conducted an experiment in which he divided people into two groups- spendthrifts and tightwads- based on responses to a survey. Spendthrifts are individuals who derive pleasure from spending, while tightwads experience pain. He then presented both groups the opportunity to buy different products. He asked them first to list advantages and disadvantages of each purchase. The result was that spendthrifts spent less money when forced to deliberate, while tightwads spent bought much more. Conclusion: tightwads are just as irrational when it comes to money as spendthrifts.

Lowenstein suggests that tightwads loosen up a bit when it comes to spending money. It’s just as unhealthy to be a tightwad as it is to be a spendthrift.

If you ask my wife, she’ll tell you that I walk the line of tightwadness. She’s right. I can go overboard with the frugalness. Tightwadness is misery. Frugalness is enjoying life while keeping costs to a minimum. If you think you’ve crossed the line to tightwadness, go out and splurge on something. Within reason, of course.

A Whole New Mind:Meaning

Written by Brett McKay

Today we’ll be looking at A Whole New Mind’s last R-directed sense, meaning.

Meaning is to have a purpose beyond life’s trivialities. It’s what motivates people to do great things. Meaning brings peace in a chaotic world. Individuals who are happy have a sense of meaning in their lives. They look beyond themselves and desire to contribute to their family or society.

How does meaning apply to law? Depression is rampant in the field of law. Most attorneys who suffer depression describe the lack of meaning they have in their careers. Many went into law for the money, but they soon find out the hard truth that money doesn’t buy happiness. In order to avoid this pitfall, take a step back and really analyze why you’re doing law. If it’s just for the money, then you’re in it for the wrong reasons. Get out now.

Why am I choosing a career in law? I like the challenge of it. It fills my need to be both abstract and practical. I like the opportunity to help people solve their problems. It’s a career that I know I can support my family with.

How can we develop our sense of meaning? Let’s see what A Whole New Mind suggests.

  1. Say thanks. Be grateful for what you have. Being satisfied with life is not getting what you want, it’s being happy with the things you have. Give gratitude to your loved ones, co-workers, and whichever Higher Power you believe.
  2. Books to read
    1. Man’s Search For Meaning.This is one of my all time favorite books. Dr. Frankle was a holocaust survivor. While he was in a concentration camp, he developed a new form of mental and emotional therapy called logotherapy. Instead of blaming your dad or a rotten childhood for you problems, logotherapy begins with the presumption that the individual is responsible for they way they feel. In order to find happiness, one must look beyond themselves.
    2. Flow: The Psychology of Optimal Experience. I haven’t read this book before, but the idea of it is how individuals can attain the state of “flow” in their lives. The book describes flow as an experience that is at once demanding and rewarding. Knowing how to get into this state can come in handy during final exams.
    3. Mindfulness. This is another book I haven’t read, but it looks good. I’ve read about mindfulness on 43 Folders, so the idea isn’t new to me. Mindfulness basically means paying attention to everything you do- from the way you lift weights to the way you fill up the car with gas. It’s being in the here and now. By practicing mindfulness, one opens the door to new insights and intuitions
  3. Visit a labyrinth. Labyrinths are maze like designs that are etched into a ground so that people can walk to the center and back again. It allows people to meditate and focus themselves in the process. Visit the Labyrinth Society to find a labyrinth near you. If you don’t have a labyrinth near you or you would like to “center” yourself anytime of the day by using a labyrinth, download my hipster PDA finger labyrinth and add it to your stack of cards. Whenever you’re feeling stressed, just take out the labyrinth, and run you finger slowly along the maze. You’d be surprised how calming this is.

Extreme Frugal Tip: Onion Peel Notepaper

Written by Brett McKay

The other day my wife and I were cruising the produce section at our local grocery store. We had to buy some onions, so my wife had me pick them out. Some of the peel came off of one of the onions and fell to the floor. Not wanting to make a mess, I picked it up. As I was holding the peel in my hands, I noticed how paper like it felt. It feels kind of like papyrus. I busted out my pen and tried writing on it. The peel took the ink very nicely. It was just like writing on paper.

Onion peel notes are about as frugal as you can get. It’s the epitome of the “use it up” philosophy of frugalness. You have several paper like peels until you get to the inside, more wet part of the onion. Also, this works best with white onions. It’s hard to see with red or yellow ones. I’m not sure how practical this is, but if you’re ever chopping onions and need to write an idea down, just find one of the onion peels. It will be a good substitute until you can put your note in a more permanent location.

A Whole New Mind: Play

Written by Brett McKay

I’ve grown up thinking work shouldn’t be fun. If you’re having fun, it means you’re not getting anything done. The truth is that people who are having fun at work are the one’s who are most productive.

A Whole New Mind discusses the importance of play in life and at work. The book breaks down play into three parts: games, humor, joyfulness.

The book discusses how games can be a way to unleash creativity in employees. Many games require one to use both the left side and right side of the brain. Not only do you have to strategies, but often you must cooperate with other individuals in order to win.

The second element of play is humor. Developing your sense of humor is an exercise of creativity. It often requires one to step back, look at the big picture, and see what types of humors connections that exist in life. It also requires one to shed new light or to present things in completely different ways. Think of the funniest jokes you’ve heard. What makes them funny? I’m sure it’s either the joke presents a theme in a radically different way or it makes some sort of funny connection between two conflicting ideas.

The final element is joyfulness. Successful people are happy people. They enjoy what they do and try to make others happy as well.

How does play apply to law? The legal field has a reputation of being stuffy, but it doesn’t have to be that way. The law can and should be a giant exercise in play. Take law school exams. I think there are some parallels between one’s attitude during an exam and test scores. Those who look at exams as a dreadful, soul destroying experiences walk away with bad scores. Those who look at exams as a game or puzzle to be beaten walk away with better scores. I think law students can do much better on exams if they look at the hypo as a game their teacher has made. Class is where you learn the rules (the law) of the game. Winning the game (the exam) is just a matter of using the rules. I know the analogy is simplistic, but it works for me.

Additionally, having a playful attitude at work can combat the “unhappy lawyer syndrome” that plagues the American legal field. Have some fun with your fellow associates. Play a joke on them. Make work a fun place to be.

Here’s what the book suggests one can do to improve their sense of play.

  1. Join a laughter club. A Dr. in India has started laughter clubs. People go there just to laugh. No one tells jokes, you just start laughing. It sounds weird, I know. But apparently participants in laughter clubs have shown signs of healthier and longer lives. Think about the last time you laughed really hard. How did you feel afterwards? Probably pretty dang good. That’s because laughing releases hormones and endorphins in the body that benefit us not only psychologically but also physically.
  2. Play the cartoon captions game. This exercise will help develop your sense of humor. Find old New Yorker cartoons and write your own caption.
  3. Play video games. Despite what you’re mother told you, video games are good for you. Today’s games often require a player to strategies and work together as a team. Why not have some fun as you develop team work skills and creativity.