The B.I.A.W. and the Coming Judicial Election

April 2, 2008
For the last several years the Building Industry Association of Washington has probably been the most powerful lobby in Washington. This was reported in November 2003 by this newspaper and it remains true today. The Seattle P.I. which seems to be keeping tabs on this group, noted Monday that B.I.A.W.’s March newsletter contains a venomous, hate-filled diatribe against ecology minded people, apparently linking them all together with eco-terrorists and a viscous attack against the governor. There is a link to newsletter in the P.I. editorial.I will write quite a bit about this later but for now I want to call attention to a couple of things that I will later describe more fully. The B.I.A.W is extremely political and closely, but not directly, aligned with the Republican Party. For example the number one agenda item for B.I.A.W. this year is the election of Dino Rossi. The second most important item is the judicial election of three State Supreme Court members. The B.I.A.W. is looking particularly closely at the seat occupied by Justice Mary Fairhurst. It said that the two issues that it is considering in connection with this election are property rights and public disclosure.Public disclosure? I had been unaware of any interest by B.I.A.W. in public disclosure law. The B.I.A.W was hugely involved with the legislature and public disclosure law was nowhere on its list of topics. It did not publicly advocate for to the legislature for changes in the public disclosure law, where ordinarily these changes would be made. After thinking about this a while, I have a theory: to some degree this “issue” might be staged.In late December last year the Court published an opinion called Soter v. Cowles Publishing Company. The case received publicity, particularly on the East side of the state. It involved the routine matter of interpreting the Public Disclosure Act and the scope of a well recognized legal privilege. The case was brought by the Spokane-Review to try to force a school district to divulge privileged papers relating to a wrongful death lawsuit that had been settled. The Court’s holding said in essence that if newspapers wanted this right they would have to go to the legislature to get the law changed, an apparently conservative holding.

Charles Johnson is a highly respected jurist, generally regarded as one of the conservative justices on the Court and he is running for re-election as well. He wrote a strident sounding dissent in Soter and according to the Olympian actually issued a press release about his dissent at the time that he announced that he was running for reelection. (Justice Fairhurst voted with the majority in the opinion and appears not to have issued a press release.)

Justice Charles Johnson is likely to be supported by the B.I.A.W. because of his conservatism. Justice Fairhurst is likely to be targeted. She wrote the dissent in Anderson v. King County, arguing that it was unconstitutional to withhold the right to marriage from gays. As you recall this was a 5 to 4 decision with Justice Johnson voting with the narrow majority.

I do not see how the interpretation of the public disclosure law is a legitimate judicial campaign issue, as the law was made by the legislature, but if the B.I.A.W. pursues this, it does serve a number of interests. Putting aside the oddity of conservatives arguing that the courts ought to be expanding the scope of legislation, this would put them on the side of the media, a highly desired ally. While I am not aware of any doctrinal chasm between Justices Fairhurst and Johnson on this matter of legislative interpretation, the Soter case could be spun to make them appear to be on opposite sides of an important issue, so the B.I.A.W. could at once bolster Justice Johnson’s candidacy while attacking Justice Fairhurst. This sounds like it might be a politically adept move, but I still need to find out how this issue is anything but a red herring, mere manipulation to try to get a political result. If the B.I.A.W pursues this, I guess I will find out.


Bomb Iran?

April 1, 2008

I find myself becoming increasingly concerned about the prospect a unilateral attack by the U.S. against Iran. Seymour Hersh has told us that we have been perched on the precipice of preemptive war with Iran for some time. On his last trip to Europe Bush told people there that he did not accept the conclusions of our National Intelligence Estimate, which concluded last fall that Iran had discontinued its development of nuclear weapons in 2003.

All American oversight agencies agreed in the N.I.E.’s statement that the conclusion that Iran had no nuclear weapons development program was accurate to a very high degree of probability. Since then, while officials in the administration (including Bush) have said that they did not accept this conclusion, to my knowledge no one has offered any reason for rejecting the clear conclusion of all the country’s intelligence agencies. Last week Cheney announced without any support whatsoever that Iran was heavily engaged in a nuclear weapons program.

(While I’m on the subject of the National Intelligence Estimate, I would also like someone in the administration to address the repeated statements in this annual report that Iraq is serving as a training ground for terrorists, resulting in a substantially increased threat of terrorism. I have yet to hear — and maybe I just missed it — a reasoned debate of this conclusion reached by the agencies that are supposed to know about terrorism.)

I was alarmed by the recent public statement of the director of the C.I.A., Michael V. Hayden. He now appears to take issue with his own National Intelligence Estimate. This of course would not be alarming if there was any data to warrant a different conclusion. One would presume that there might be a different conclusion if there were events subsequent to the report that were inconsistent with the events relied on in the report. He however asserts that proof of the existence of this program lies in Iran’s willingness to suffer penalties rather than open itself to inspections. This is after the U.S. agreed to the U.N. imposed sanctions and without any evidence whatsoever of Iran’s failure to comply with the edict to stop nuclear weapons development.

Hayden, however, publicly asserted that there was the threat of nuclear weapons development in Iran because there was no new information since the opposite conclusion was reached. This of course is not in keeping with conventional notions of logic. There are other explanations for not allowing inspections. The United States for example has historically resisted inspections itself based on its national sovereignty.

McCain on the Mortgage Crisis is a Reactionary

March 29, 2008

Would someone explain to me the difference between Herbert Hoover or Calvin Coolidge and John McCain. Hoover of course focused his attention, such as it was, on keeping business free of regulation. His “just wait and see” approach saw us into the Great Depression.

There are two very obvious fiscal problems facing us now: the cost of the war and the mortgage crisis. His answer to rapidly broadening deficit created by the war is to say that we will continue it for 100 years if we have to and he will lower taxes for the middle class. This so called straight talking maverick promises even greater deficit spending on war, as I understand it, and no end in sight. He has no answer for the burden this puts on our economy as more and more of our money is spent just servicing the debt created by five years (an counting) of war. (Remember that one of our stategies when the Soviet Union invaded Afghanistan was to foment radical Islam so that so the fight could continue long enough to bankrupt the Soviet Union. Why are we immune from this?)

While accepting a downward spiral of national debt, McCain said that irresponsible homeowners are getting their just desserts when 4 million of them are facing foreclosure. He further suggested that the ones in trouble are the people who refuse to get second jobs. He did suggest that we might consider giving consumers more Truth in Lending disclosures, a proposal that he voted against a few months ago and one that everyone (including McCain a few months ago) acknowledges would be of no meaningful assistance in the current crisis and unlikely to avoid similar problems in the future. He did come out though in favor of bailing out financial institutions which bought heavily into bad mortgages if their troubles presented a “systemic” threat.

This mortgage crisis is serious. It, according to the Economist, involves 1.1 trillion dollars. McCain seems to be saying “Wake me up if our system starts to collapse.” The Economist, which was taken seriously by Republicans before the party was hijacked by ideologues, suggests that regulation is appropriate, that a systemic fix is in order as unregulated investment banking presents a risk of serial bailouts. It also suggested the government might buy some of the subprime debt because it could be acquired at a fire sale discount. The government could then work with the home owners and might very well profit be the investment.

Isn’t McCain proposing that we do exactly what we did in the late 1920’s?

Change What Senator Obama?

March 28, 2008
Political speeches are intended to appeal to people and they are not terribly reliable as policy statements or even as expressions of sincere sentiment. (In 2000 Bush was the self-proclaimed “uniter.”) I found Obama’s speech about race to be sincerely moving and I see it as something of historic significance. Nonetheless I am growing impatient for him to provide more content to the notion of change that he talks about.

He certainly describes a rather dramatic change in approach from the current administration and, accepting that he really intends to withdraw from Iraq promptly, he proposes a meaningful change in foreign policy. Eisenhower said that the toughest fight of the president was trying to restrain the military and Obama talks as if he will engage in that fight, which would be a meaningful change. Eisenhower said that he would not have been able to prevail in his fight had he not been the leader of the allied forces in World War II, suggesting that even in the 1950’s the fight to restrain the military was not an easy one. It would be interesting to see how successful Obama is in carrying this out . McCain has said nothing I’ve heard to indicate that he would oppose the wishes of the Pentagon in any regard.

It is in terms of domestic policy that Obama’s notion of change is unclear. My impression is that he is trying to position himself as a Clinton (Bill) Democratic, fiscally conservative. On health care, and the financial crisis he is more conservative than Hillary Clinton in terms of government intervention. Like Bill Clinton and Republicans before Reagan, he posits that one of the chief domestic issues is getting the nation out of so much debt. As far as I know most economists (such as Alan Greenspan, who sees Bush’s economic policy as disastrous) and for that matter businesses outside the defense industry agree that a more conservative fiscal policy, such as the Democrats propose, would be a good thing.

My sense right now is that if Obama can successfully deal with the Pentagon he would change foreign policy, but that domestically there would be little change in governmental programs. I should say that I do not view the health insurance proposals of Clinton and Obama as dramatic policy shifts. Maybe there should not be a dramatic change; maybe the system just needs improvement, not serious change. Kucinich’s single payer program was a significant shift, but apparently it is conventional wisdom that a dramatic shift would not be attainable or perhaps is not desirable.

I understand that part of the process of getting elected is avoidance of policy statements that will alienate a segment of the population and the trick is avoid saying anything too definite so as to avoid alienating anyone. Just the same I personally would feel better knowing exactly what policy Obama would champion.

The Mortgage Crisis: a Campaign Issue on Which Clinton Steps Forward

March 26, 2008

As we come down the home stretch in the primaries, Clinton may be hitching her wagon — at least in part — to the mortgage crisis. It was my impression that because of her stance on the war and her association with the conservative social policies of her husband, she lost much of the support from the left. Over the campaign she has moved her position on the war so as to try to make it indistinguishable from that of Obama. (At least according to their websites there is actually a rather clear difference between the two with Clinton wanting to keep permanent military bases in Iraq with attendant commitments and she all but authorizing an attack on Iran by voting to designate part of its army a terrorist organization.) During the campaign she has also distanced herself from the domestic policies of her husband by increasingly appealing to populist sentiment.

This approach has crystallized in her proposals with respect to the mortgage crisis. She has proposed that a $30 billion fund be created to assist homeowners in crisis and is clearly approaching this from the mortgage consumer side. She proposes a 90-day moratorium on foreclosures and would freeze the interest rate on adjustable rate subprime loans. This should play well in industrial states with upcoming primaries.

Clinton has seemed to be generally consistent in this regard. At least since August she has focused on the need for consumer relief while Obama has emphasized the need for regulation of the industry. Since Edwards left the race she has adopted some of his proposals (this is part of her move to the left) in advocating a moratorium and freeze on subprime interest rates. To further buttress her populist confides, Clinton borrowed from Barney Frank and Christopher Dodd in recommending that the Federal Housing Administration be given enhanced power to oversee and perhaps to guarantee or purchase defaulted loans.

Obama is clearly fixed toward the center, advocating a conservative response to the crisis. He now proposes a smaller fund for homeowners ($10 billion) and offers a lot of talk about restraint and vague talk about regulation.

On this issue Obama and McCain appear to be closer to each other than either is to Clinton, although Obama certainly sees himself as closer to Clinton than to McCain.

McCain on the Economy Sounds Muddled

March 26, 2008

McCain sounded confused and his responses were meandering when he answered questions in Texas about the invasion of Ecuador. I was quite happy to attribute this to fatigue after a hard day, but his recent speech on the economic crisis makes me wonder.

He urged caution and took the position that a bailout should only be done if there is a threat of systemic collapse. Who on earth does he think he is arguing with? Has there ever been a bailout such as the recent one that was not justified by claiming that the action was taken to preserve the system? This is no position at all, unless he is suggesting that there was an insufficient basis for the action taken with Bear Stearns. The lack of specifics makes this sound like nothing more than someone trying to sound conservative without necessarily knowing what is going on. In its tone of principled conformance with the status quo without much in the way of true explanation, the comment is very similar to the ones we are accustomed to hearing from our current executive.

His comment about caution in providing assistance to the people caught in the foreclosure crisis also struck me as odd. This of course is a residential mortgage crisis. He cautions against federal intervention because speculators should not benefit by such help. That really doesn’t say anything does it? Does he have any idea how many of these speculators would inappropriately benefit by such a program or whether it is possible to cull them from the rest, or whether that would be worthwhile to undertake a culling process? This left me with sort of a vague, amorphous sense of caution without any sense of what he might do other than be slow in dealing with this.

While arguing against quick federal action he did suggest that adding more disclosures to the stack of papers a consumer is required to sign at closing might solve things. The problem with this of course is that the mass of loan papers already overwhelms most people and the people who find themselves in this crisis are not likely to have been assisted by a thicker stack of papers to sign at closing. Is it just me or does this sound really lame? The financial institutions, which knew exactly what they were doing still jumped into this. That suggests to me that dumping more paper on consumers might not be entirely effective.

This struck me as a random suggestion, as just a few months ago he refused to accept changes in the Truth in Lending Act, which he now advocates. This business about enhancing the Truth in Lending Act is inconsistent with his statements about avoidance of federal regulation and to all appearances would be regulation without much effect. He has steadfastly refused to approve measures to restrain predatory lending practices, which is I guess consistent with his speech about avoiding intervention. The problem is that you just cannot decipher a policy out of vague statements of restraint with odd exceptions.
Clinton and Obama have proposed a fund in about the same about used for Bear Stearns to help people threatened with foreclosure. This has appeal to me because it would address the whole problem. That is it would help people facing foreclosure and by so doing it would improve the quality of the mortgage backed securities and bad loans that bedevil financial institutions. Sort of a win-win situation, rather than just letting the people go and bailing out financial institutions, who at least had the expertise and full opportunity to choose not to leap into the quagmire.

I am sure that there are counter arguments to the proposals of the Democrats. I sincerely hope that McCain plans to engage in policy discussions and not just the same old junk. Maybe he does plan to just try to seem very cautious, stay the hand with the war, merely watch the economy as we go deeper and deeper in debt and fissures like the current one appear. He seems to be making some effort to to assure us that it will be business as usual. My uncertainty about reserve without defining what you are looking for and what measures you would adopt if the circumstances warranted applies to Obama as well as McCain. See the discussion of this matter as a campaign issue.

Rob McKenna Thinks We Are Idiots.

March 22, 2008

Washington State’s Attorney General Rob McKenna really should be in the Bush administration. He demonstrates a presidential grasp of what he is doing. His opinions are not rational, at least that is the conclusion you must reach if his arguments are in fact the basis of his opinions.

Generally speaking tort law has two purposes: to compensate victims and to enforce rules of conduct that are accepted as societal standards. Its purpose is in part to help mold society into behavior patterns that are predictable and reasonable. A debate about tort reform should address the realization of those goals, then perhaps weigh the cost to society against the benefit of particular laws. You would expect a reasoned argument to discuss alternatives to the law in question and their relative merit.

Unfortunately it is never done that way. Often proponents of tort reform merely attempt to excite the general prejudice against trial lawyers. This is politically expedient but does nothing to advance our interest in living in a rational society. The other common argument is to throw out a figure and say that is how much money has been awarded for something. The argument proceeds by saying this figure is way too high and concludes with: ergo we should abolish that law. This is exactly how insurance companies look at things but this approach seems to have traction with the general public. In truth this is not an argument at all and again is little more than an appeal to prejudice or sometimes sympathy for the perpetrators of tortious conduct.

Mr. McKenna believes that sovereign immunity should be re-instituted in Washington after having been abandoned in the 1960’s. His argument goes like this: The State of Washington has paid over $500 million in the last 25 years. If the State could not be sued, it would not have to pay anything and there would be no problem. End of argument. He spices this up a little by adding that the trial lawyers are always expanding the State’s liability. With that he has pretty much covered everything.

Why didn’t we think of this with drunken driving?  That costs a lot too.  This would be a good approach to cutting down crime.  Make homicides legal.  Washington has already pursued this approach with construction defects and disasters.  Why not expand the approach.  It’s working isn’t it?