ProfessorBainbridge.com

If the SCOTUS had ducked Bush v. Gore, the All-Democrat Florida Supreme Court would have stolen the election for Gore

Megan McArdle on what might have happened if the Supreme Court had not decided Bush v. Gore:

Democrats who are mad about Bush v. Gore seem to sort of forget just how awful the Florida rulings looked.  A court composed entirely of Democrats ruled that they thought it was fine for Al Gore to cherry pick the four biggest Democratic counties in Florida and request precisely the manual recount that was most likely to deliver him the election even if he had, in fact, received less than a majority of the votes in the state.  This was a terrible idea, and it made a mockery of later Democratic claims that they just wanted to count all the votes.  They wanted to count only votes that would make Al Gore president, and the Florida Supreme Court did everything it could to help, short of just stepping in and ruling that Al Gore was the winner.  The Republican outcry against the Florida Supreme Court and the US Supreme Court would have been intense--in my opinion, justifiably so.

The villains of this story never were the conservative justice on the US Supreme Court. Nope. The bad guys were the Democrats on the Florida Supreme Court who blatantly favored Gore at every stage. Not that you can get a Democrat to admit it.

News Corp to disclose political contributions, left-leaning Democrat-aligned activists pleased

Alison Frankel:

On Monday, the directors and officers of Rupert Murdoch’s News Corp agreed to settle a derivative suit accusing them of breaching their duty to shareholders by failing to avert the phone-hacking scandal at the company’s British newspapers. News Corp’s insurers will pay $139 million, in what shareholder lawyers at Grant & Eisenhofer called the largest-ever cash settlement of derivative claims in Delaware Chancery Court. The settlement, which comes as News Corp prepares to split its news and entertainment branches into two publicly traded companies, was produced after several months of mediation that took place while the company’s motion to dismiss was pending before Vice Chancellor John Noble.

The cash portion of the deal (which will be eventually reduced by legal fees paid to G&E, co-lead counsel from Bernstein Litowitz Berger & Grossmann and several other plaintiffs firms that managed to grab a piece of the case) is obviously the big news, but among the many corporate governance enhancements detailed in the memorandum of understanding between News Corp and shareholders, you’ll find what appears to be a historic concession by the company: News Corp has agreed to disclose its campaign and political action committee contributions to shareholders and its lobbying and Super PAC spending to the board. According to two advocates for corporate political transparency, this settlement apparently marks the first time that shareholders have used the vehicle of a derivative suit to obtain enhanced disclosure of corporate political spending. “I think it’s terrific,” said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington (CREW). “Any way to force companies to disclose spending is good for democracy.”

Melanie Sloan and her CREW buddies are hardly "advocates for corporate political transparency." To the contrary, they are a core part of the left's effort to defund conservatives by getting corporations out of the campaign finance game (while allowing unions to continue funding the Democrat machine).

DiscoverTheNetwork.org reports that:

CREW was founded by Democrat activists Norm Eisen (an attorney) and Louis Mayberg (a prominent Democrat donor, and co-founder of the Maryland-based mutual fund management firm ProFund Advisors LLC). CREW’s "Form 990" IRS filing for 2001 lists Mayberg as one of its three Founding Directors; the other two are Daniel Berger (a high-profile Democrat donor who in 2004 made a $100,000 contribution to America Coming Together) and Mark Penn (a fellow at the New Politics Institute, and a top Democrat strategist and pollster who not only played a key role in Bill Clinton's 1996 presidential campaign, but also served as head of "message and strategy" for Hillary Clinton's 2000 Senate campaign).

CREW has received financial backing from the Arca Foundation, the David Geffen Foundation, Democracy Alliance, the Mayberg Family Charitable Foundation, the George Soros's Open Society Institute, the Sheller Family Foundation, the Streisand Foundation, the Tides Foundation, the Wallace Global Fund, and the Woodbury Fund -- all institutions distinguished by their support for far-left causes. 

CREW’s Executive Director is Melanie Sloan, a longtime Democrat operative who previously served as Nominations Counsel for Joe Biden’s Senate Judiciary Committee (1993); Counsel for the Crime Subcommittee of the House Judiciary Committee for Charles Schumer (1994); Minority Counsel for the U.S. House of Representatives Judiciary Committee under John Conyers (1995-1998); and Assistant U.S. District Attorney for the District of Columbia (1998-2003).

ActivistCash.com likewise reports that:

An analysis of CREW’s “watchdog” activities reveals a systematic effort to disproportionately target Republicans and conservative-leaning groups with often-frivolous lawsuits, ethics complaints, and petitions for investigations by law enforcement agencies. An analysis of CREW’s activities demonstrates that it disproportionately targets conservatives by a ratio of more than 8-to-1.

The interesting question is why academics like Lucian Bebchuk of Harvard and Robert Jackson of Columbia, whose work Frankel cites with seeming approval, are giving cover and legitimacy to what is so obviously a political effort by the left to defund and delegitimize conservatives.

Ten Thoughts on Civil Liberty and the Boston Bombing Aftermath

1. The terrorists win if we allow these sort of events to push us further down the road towards being a police state.
2. Therefore calls for greater use of surveillance cameras are a bad idea. Big Brother should not be watching everywhere all the time.
3. Therefore treating an American citizen who committed a crime on US soil as an enemy combatant--as some misguided GOP lawmakers have urged--would have serious and adverse civil libery consequences.
4. Therefore Emily Bazelon was correct when she argued that "When the law gets bent out of shape for him, it’s easier to bend out of shape for the rest of us." The right to remain silent is one of the most precious legacies of the Anglo-American legal tradition. Dzhokhar Tsarnaev should be read his Miranda rights.
5. Therefore Glenn Greenwald was also right when he argued that the Obama administration has already gone too far in restricting "Miranda rights for terrorism suspects captured on US soil."
6. Every time we restrict civil liberties in these ways, we go one step further down the road towards using drones against US citizens on US soil. Rand Paul was right that we need to nip these trends in the bud.
7. The terrorists also win when we shut down an entire city to chase down one guy. The whole manhunt was a gross overreaction.
8. Social media and blogs behaved remarkably badly, fostering a with hunt mentality in which innocent people got their names, pictures, and addresses plastered across the web. The right side of the blogosphere was particularly awful this time, but it is a bipartisan failing.
9. Allowing the Boston bombing to derail immigration reform would be absurd. To the contrary, these guys were here legally. This incident simply has nothing to do with the issue of how we deal with economic migrants from countries to our south, which is the basic issue on illegal immigration.
10. You'll notice that amateurs with concealed carry guns did us no good. Allowing the bombing to derail reasonable efforts at gun control would be equally absurd.

Tweet of the Day

For those talking about the poor dispossessed Chechen boy. He was driving a BMW and wore $900 shoes.

— bruce dowbiggin (@dowbboy) April 20, 2013

Political correctness comes to home building?!?

I had to check the date on this story to make sure it wasn't April Fools' Day:

Homebuilders scrap 'master bedroom' because of racist, gender-biased connotations. "Master bedroom" replaced with "owner bedroom" in floor plans. ...

Why? In large part for exactly the reason you would think: “Master” has connotation problems, in gender (it skews toward male) and race (the slave-master).

Which called to mind something Daniel Henninger said in today's WSJ:

Political correctness—the silent code that decides whose side of the story gets elevated and whose side gets buried—has been a blunt but effective weapon, which the dominant liberal culture has used to achieve a lot of victories over "them" the past 40 years. But the wins have come at a price. That price is the return of an unmistakable, growing and potentially destabilizing bitterness in American politics.

Happy Federal Tax Freedom Day

The Tax Foundation has determined that today is the Federal Tax Freedom Day:

Tax Freedom Day is the day when the nation as a whole has earned enough money to pay its total tax bill for the year. ...

Tax Freedom Day is five days later than last year, due mainly to the fiscal cliff deal that raised federal taxes on individual income and payroll. Additionally, the Affordable Care Act’s investment tax and excise tax went into effect. Finally, despite these tax increases, the economy is expected to continue its slow recovery, boosting profits, incomes, and tax revenues.

My tweet of the day

I am constantly amused by liberal law professors bitching and moaning about income inequality, while enjoying their status in the 1%

— Stephen Bainbridge (@ProfBainbridge) March 2, 2013

The Obama stock rally is not what it seems

... stocks are flirting with all-time highs, up 88% since Mr. Obama took office and 124% since the lows of March 2009. So shall stock pickers canonize Mr. Obama alongside Ronald Reagan and Bill Clinton?

Not yet. The Obama rally has nothing in common with the 1982-2000 boom. It is much more a replay of the Gerald Ford-Jimmy Carter rally of 1974-80, which was a flight of the U.S. dollar into stocks, commodities, real estate—anything but the weakening greenback. ...

With the S&P 500 up 124% over the past four years, gold is up 88%, oil 106% and silver 167%.

What does a genuine stock rally look like? For that, see the August 1982 to January 2000 boom, during which the S&P 500 soared 1,194% while gold dropped in value by 35%, oil by 23%, and silver by 17%. Stocks way up. Commodities down.

The difference between illusory stock rallies and the real thing is stark. During the Ford, Carter and Obama years, the weakening U.S. dollar drove investors out of cash. In the Reagan, Bush 41 and Clinton years, Americans benefited from a strong dollar, while stocks (and bonds) wildly outperformed commodities.

via online.wsj.com

Do entitlements discourage work?

There was an interesting juxtaposition yesterday in the WSJ. Let's start in the letters section:

Richard Vedder is incorrect in stating that one of the main reasons for lack of labor-force participation is government benefits ("The Wages of Unemployment," op-ed, Jan. 16). The opposite is true. The existence of growing government benefits, especially food stamps, is evidence of the lack of jobs that pay enough to live on without food stamps.

Now to the news section:

Many Israelis say they are growing fed up with the generous housing and other living benefits doled out to ultraorthodox Jews, who represent about 10% of this country of 7.7 million people and whose high birthrate suggests that will grow. ...

A 28-year-old married father of three studying in ultraorthodox seminary, for example, receives about $1,200 per month in subsidies, say court filings. ...

As benefits swelled, and more ultraorthodox remained in study to avoid the military, their workforce participation fell. When Mr. Begin took power, 75% of ultraorthodox men had jobs. Today that number is around 38%.

Granted, there is a religious component to the ultraorthdox's decision making, but doesn't the Israeli data suggest that an overly generous entitlement system in fact creates a class of takers who prefer the dole to work?

Noonan on Phil Mickelson's taxes

Peggy Noonan:

Golf star Phil Mickelson this week complained about taxes—"I happen to be in that zone that has been targeted both federally and by the state"—and suggested he may leave California. Before anyone could jump down his throat, he abjectly apologized: He didn't mean to hurt anyone, he shouldn't have said it, taxes are a "personal" issue. ...

Conservatives and Republicans feel a bit under siege these days because their views are not officially in style. But the Cringe is not the way to deal with it. If you take a stand, take a stand and take the blows. Many people would think that paying more than half your salary in city, state, county and federal taxes is unjust. Mr. Mickelson is not alone.

If he stays in California, Phil will end up working for the government--federal, state, and local--from January 1 into July or August and will keep only what he earns from then to December. Even if that's still millions, spending over half the year working for Barak Obama and Jerry Brown is no one's idea of a good time.

How moderate is President Obama?

Over at OTB, Steven Taylor posts on a claim by political scientist Keith Poole that "President Obama is the most ideologically moderate Democratic president in the post-war period ...." Taylor goes on to opine the study suggests "that the notion that Obama is especially liberal (let alone a socialist of some stripe) is an indefensible position to take from an empirical point of view."

This post and the underlying study raised all my hackles about empirical scholarship. Empirical analysis all too often is flawed by GIGO, design errors, selection bias, and a host of other problems. In tis case, for example, trying to map Presidential statements to Congressional votes looks like a process fraught with potential errors. In addition, as the study authors themselves note, Obama's scores are pulled to the right by his foreign policy positions, which almost everyone agrees have been remarkably like those of his predecessor in a surprising number of respects. Guantanamo is still open. Obama's drones are busy killing all over the Islamic world. Throw out his foreign policy scores and on domestic issues Obama doubtless would shift substantially to the left.

And then consider what the second inaugural address tells us. James Fallows opines of "Obama's Startling Second Inaugural" that:

This was the most sustainedly "progressive" statement Barack Obama has made in his decade on the national stage. ... [he]  has won re-election and knows he will never have to run again and hears the clock ticking on his last chance to use the power of the presidency on the causes he cares about.

Or consider Reihan Salam:

I’m glad that I read President Obama’s Inaugural Address in lieu of listening to it live. Back in 2004, after his keynote address to the Democratic National Convention, I wrote an op-ed for the New York Sun arguing that Barack Obama was more left-wing than was commonly understood at the time. Specifically, I made the case that he saw the public sector as the prime vehicle for the values of solidarity and community in American life. And in this most recent speech, the president collapsed the distinction between collective action and government action again and again, very much in keeping with social-democratic thinking.

Obviously, Obama is no socialist. But ask me if I think he's a (surprisingly militaristic) social democrat and you'll get an affirmative answer, which in my book makes him a lot more of a liberal on domestic issues than any other modern Democratic president.

The twelve scariest words in the English language

Barack Obama is from the government, and he is here to help

The debt ceiling chicken game

The other day I discussed the debt ceiling fight in terms of game theory, specifically the so-called chicken game. 

Here's how a chicken game works:

...two teenagers are driving towards each other on a crash course. The point of the game is to overcome fear and stay on course. The driver that gets scared and swerves away is the loser. The driver that stays on course is the winner and gets the admiration of onlookers. The problem, of course, is that if both stay on course, then both will crash and die.

How do you win a chicken game? Game theory teaches that:

One of the best solutions is to prove that you will not change course .... Limiting your options, and metaphorically becoming immovable like a lighthouse, can show the other side that you will not back down.

In the driving story, a teenager could become immovable by publicly showing he is forcibly locking himself into staying on course–either by using a steering wheel lock or even by detaching the wheel and throwing it away. ...

If you can’t credibly limit your actions, the next best option is to get a reputation for being tough so people don’t bother messing with you.

Unfortunately for the GOP (and the nation's fiscal future), I think President Obama has some significant advantages. First, a single driver always has the advantage over a committee. Obama may have some backseat drivers (although not many and not vocal), but Boehner's got lots of people trying to grab the steering wheel and lots more backseat driving. This makes it harder for Boehner to credibly send signals.

Second, Obama is sending all the right signals. He insists that he will not negotiate and that there is no Plan B.

Third, I think Obama is unlikely to swerve because I think he believes he has got the GOP's number. He believes rolled the Republicans on the fiscal cliff. I'm confident he thinks he can do it again.

Unfotunately, I suspect he's right.

A cry for a return to a sane GOP foreign policy

Ever since the neo-conservative crowd took over Republican foreign policy during the Bush 43 years, there has been a desperate need for a correction back towards the more traditional, realist policy school. Daniel Larison powerfully voices this need in a recent post:

The Republican weakness on foreign policy isn’t simply that Republican candidates favor many unpopular policies, but that most Americans don’t trust that Republicans won’t agitate for new, unnecessary wars in the future. Most Americans would presumably still endorse a message of “peace through strength,” but they have to be able to believe that Republican leaders are interested in preserving the peace rather than finding excuses for destroying it. Where Republicans were once considered sober, responsible stewards, most of their foremost spokesmen on foreign policy are now correctly regarded as dangerous and intoxicated with ideological fantasies.

See also James Joyner:

Problematically, while Scowcroft, Powell, and Eisenhower are admired by professionals in their field, their party's leadership views them as Republicans in Name Only -- if not outright apostates. It's a status they share with Richard Lugar, George H.W. Bush, Jon Huntsman, and, yes, Chuck Hagel.

Either the Republican Party has to re-embrace its traditional foreign policy agenda, or those of us who have been left on the outside looking in will have to conclude that it's no longer our party.

While the transition has been remarkably fast, today's Republican Party is simply not the party of Dwight Eisenhower or even Ronald Reagan. Scowcroft advised Presidents Nixon, Ford and George H.W. Bush. Hagel and Huntsman both served in the Reagan administration. But, just as the Tea Party is now the de facto domestic policy face of the GOP, the neocons are its foreign policy face.

Memo to the left: AIG's board had no choice but to consider joining Greenberg's suit

In his capacity as an AIG shareholder (via his company Starr International), former AIG boss Hank Greenberg has filed a derivative suit against the federal government on AIG's behalf, in which he alleges that the federal government's takeover of AIG violated the Takings Clause by taking shareholder property without compensation. Greenberg recently filed a deamnd on AIG's board asking them to take up the suit.

Predictably, this outraged the know nothing left, including various Democrat congress people:

Democrats responded with outrage Tuesday to reports that insurance giant American International Group (AIG) might sue the federal government over the terms of its 2008 bailout. 

Sen. Elizabeth Warren (D-Mass.) and Rep. Elijah Cummings (D-Md.) called the potential $25 billion shareholder lawsuit "outrageous" and "unbelievable."

I expect this sort of thing from the Occupy Wall Street twits, who haven't bothered to learn anything about the institutions they're attacking, but I expected better from former Harvard bankruptcy law professor Liz Warren. But it seems she knows as much about corporate law as she does about her Cherokee ancestry.

Let me make it very simple: If Greenberg is going to have an opportunity to ventilate the very serious and legitimate concerns raised by his suit, he had no choice but to ask AIG's board to consider joining the suit and, once he did so, AIG's board had no choice but to consider doing so.

As I explain in Corporation Law, there are two types of shareholder litigation. 

“Direct” shareholder suits arise out of causes of action belonging to the shareholders in their individual capacity. It is typically premised on an injury directly affecting the shareholders and must be brought by the shareholders in their own name. In contrast, a “derivative” suit is one brought by the shareholder on behalf of the corporation. The cause of action belongs to the corporation as an entity and arises out of an injury done to the corporation as an entity. The shareholder is merely acting as the firm’s representative.

The basic test for distinguishing direct and derivative suits is: Who suffered the most immediate and direct injury? Note that it is not enough for a shareholder to allege that he was injured because the challenged conduct resulted in a drop in the corporation’s stock market price.

Here, the principal claim is that the government took AIG property without compensation and thus violated the Takings Clause. The initial injury thus was suffered by AIG. The injury to Greenberg and his fellow shareholders was derivative of that prior harm. Hence, this was a derivative suit.

The law provides that shareholders may not bring suit unless they first make demand on the board of directors or demand is excused. The demand need not be in the form of a pleading nor a detailed as a complaint, but rather simply must request that the board bring suit on the alleged cause of action. There being no facts here to excuse Greenberg from making demand, he was legally bound to make demand on the AIG board.

Once Greenberg did so, moreover, the board is legally obligated to undertake a two-step process. Rales v. Blasband, 634 A.2d 927, 935 (Del. 1993). The board must first inform itself of the relevant facts relating to the challenged transaction or other alleged wrongdoing, as well as the legal and business considerations attendant to resolving the matter. Any factual investigation must be reasonable and conducted in good faith, but within those parameters the board has great discretion. Levine v. Smith, 591 A.2d 194, 213-14 (Del. 1991). Having done so, the board must elect amongst the three principal alternatives available to it: (1) accepting the demand and prosecuting the action; (2) resolving the matter internally without resort to litigation; or (3) refusing the demand. See Weiss v. Temporary Inv. Fund, Inc., 692 F.2d 928, 941 (3d Cir. 1982) (identifying alternatives), vacated on other grounds, 465 U.S. 1001 (1984).

Critical to the current dispute, the Delaware supreme court has held that when a board of directors is confronted with a derivative action asserted on its behalf, the board cannot stand neutral. It must take one of the three alternatives. Kaplan v. Peat, Marwick, Mitchell & Co., 540 A.2d 726, 731 (Del. 1988).

Whether or not AIG's board should have accepted Greenberg's demand is a question on which reasonable people can differ, but the left's attack on that board for even considering doing so is as lawless as the AIG takeover itself. Democrat congressmen Peter Welch of Vermont, Michael Capuano of Massachusetts and Luis V. Gutierrez of Illinois, for example, told AIG's board:

According to The New York Times, AIG is actively considering suing the U.S. government for monetary damages after American taxpayers rescued your company from its reckless conduct with a $182 billion bailout.

Don’t do it.

Don’t even think about it.

In other words, they told AIG's board to break the law. As did Congresswoman Maxine Waters:

I would urge the board to drop its consideration of the lawsuit, thank the American public for the $182 billion rescue package that prevented the company’s collapse and support the reforms in the Dodd–Frank Wall Street Reform and Consumer Protection Act that ensure that systemically important financial institutions can no longer hold our economy hostage.

By the way, Waters is in line to take over the House Financial Services Committee if the Democrats take the House in 2014. 

I find this sort of political grandstanding appalling. The AIG board did what the law required it to do. If the rule of law means anything in the Obama era, the AIG board should be commended--not pilloried--for having done so.