Citizens United -- how it came to be and what we're seeing now

As you know, I'm in the process of catching up on my New Yorkers.  In the May 21, 2012, edition, Jeffrey Toobin wrote a piece titled "Money Unlimited" about how Chief Justice John Roberts "orchestrated the Citizens United decision."  For some background information, Citizens United has its roots in a 2003 case named McConnell v. Federal Election Commission, where the Supreme Court upheld most of the McCain-Feingold act.  (The McCain-Feingold Act prohibited corporations and unions from broadcasting advertisements mentioning a candidate within thirty days of a primary or caucus and within sixty days of a general election.  The purpose of the act was to clarify a meaningless distinction between "candidate" and "issue" advertisements that existed before.)  With the Supreme Court upholding an "as-applied" test of the Act, a right-wing organization that wanted to broadcast a "conservative documentary" against Hillary Clinton knew it had to challenge the Federal Election Commission's barring its broadcast and challenge the law on its face.  The case went to the Supreme Court, and during the first round of oral arguments, Tom Olsen represented Citizens United, and he stated the issue as a very narrow right.  The government made a grand faux pas in oral arguments, and the conservative justices pounced.  As the deliberations and opinion drafts circulated, it became apparent that  Justice Kennedy was viewing the case in a much broader freedom of speech for corporations scope.  David Souter wrote a scathing dissent that essentially was a "go to hell" send-off for himself that pointed out that the court was deciding the case on much wider grounds that the parties sought.  As Toobin writes, Roberts needed to preserve "the Court's credibility," and he developed the solution of a second round of oral arguments where the court wrote the questions presented, and they were written to address whether the Act violated free speech.  The parties argued a second time, but the decisions were already made, and the opinions were already drafted.  It was merely a show.  After oral arguments, Roberts was ready with Kennedy's opinion striking down the law.  The outcome was that corporations are now permitted to have unlimited spending for political campaigns.

So, beyond my suggestion for you to read the article, the question becomes what is the fallout?  The fallout has easily been seen by the most recent Wisconsin governor recall election.  Whoever can court the most corporations can win.  The Republican governor outspent the Democratic candidate 8:1, according to one new article I read.  That's an astounding difference in spending.  Taking this idea further, what we're now seeing is that corporations (which are now being created and funded by major players like Karl Rove exclusively to impact elections) are essentially buying local elections.  By buying local elections (think US Representatives, US Senators, state representatives, etc.), the corporations are slowing amassing support for their policies at capitals across the country.  NPR's This American Life highlighted this exact process in its broadcast "Take the Money and Run for Office: Act II."  Listen to the podcast.  Justice Souter has since retired, but he has continued to speak about the legal activism that Roberts led on this case in order to circumvent the separation of powers.  Other critics of the decision have warned that this decision has now permitted American elections to be bought by foreign corporations, and thus be subject to an invisible yet powerful foreign hand.  At this point, Souter's dissent has not been released, and those seeking to "correct the injustice" are hoping that it is eventually published in an attempt to fight how the decision was made and to prepare for the future  (see CU -- Souter & Toobin).  This is definitely going to become a stickier and stickier wicket as we see more elections being "bought" within the final weeks by mass cash infusions from corporations.  Candidates may no longer rely on their constant flow of money from actual voters, but they must allot massive amounts of cash for their rainy day late push to counteract corporations' attempts to control elections.  Obviously, this will affect the two political parties differently.  (I'll refrain from making a cynical statement about Republicans at this time.)  At some point, there will be push back.  I'll be watching.

Uniqlo . . . interesting economic concept, so-so experience

As I've stated, I read many articles, magazines, and books while on my trip to Taiwan and Japan.  In the March 26, 2012, edition of The New Yorker, James Surowiecki wrote about the Japanese clothing store Uniqlo.  More interesting than merely discussing its line of clothing, its particular market, or its general success, he discussed it from an economic viewpoint (because, well, finances get him excited), and he discussed how the chain has improved its financial success by hiring more workers.  Yes, that's right.  In contrast to many American stores, Uniqlo has increased its labor costs by paying its employees more, having more full-time, long-term employees, and having more employees, in general.  Surowiecki was also highlighting Zeynep Ton's recent Harvard Business Review article that described his study on four low-price retailers (Costco, Trader Joe's, QuikTrip, and a Spanish company).  Those stores, like Uniqlo, all have higher than average labor costs, but they remain efficient and in business because they are able to keep people coming in their stores.  Ton essentially recognized that there is a point where cutting labor costs begins cutting against customers coming to your store because they can't find anything.  The term "phantom stock-out" was given to the issue when a store has an item, but the consumer can't find it, so the consumer assumes the store doesn't have it.  Another related term is "customer outsource" -- when the store begins making the customer do the work (think of self-service lanes at a grocery store).  At some point, the customer just gives up.  Suroweicki then gave the perfect example of Home Depot, where the labor costs were cut by reducing the number of employees and firing all the knowledgeable employees.  Thus, consumers were left wandering the many aisles looking for things.  Eventually, they stopped going to the stores.  I know I've personally experienced that very issue at Home Depot, and it is for that reason that I often do not patron Home Depot.

So, armed with this knowledge and knowing that I was imminently headed to Japan, I made a plan to visit a Uniqlo, if I happened to stumble on one.  Sure enough, there's a Uniqlo on Ginza, and so, despite the throngs of people we could see in the store, I persuaded my sister-in-law to accompany me to the store.  Now, I realize that it was Golden Week, and I realize we were in one of the few affordable stores on Ginza, but it was packed.  In fact, we had to wait in lines to go up the escalators.  Thus, some of the employees were being used essentially as crowd-control bouncers.  Then, once we got to the various floors, we noticed the clothing essentially offered a line of clothing reminiscent of Land's End mixed with Gap.  We weren't that impressed.  Some of the shirts had Barbie and Hello Kitty themes, but other than those, there was nothing exceptional.  The second sentence of Suroweicki's article stated, "[Uniqlo] has found a way to sell basic stuff that is not only affordable by also stylish and durable."  Yep.  We agree -- basic and durable.  Suroweicki wrote that it was the incredible labor force that made Uniqlo one of the most successful retailers in the world --- possible, but I have to say things were so hectic that we didn't really get to experience any fantastic service.  Overall, I think the idea that is so alluring is that the customer is being given top-class service even when buying low/medium-class stuff.  Everyone likes to be treated like a winner, and if a company can balance its costs just right, it seems it, too, can win.  Home Depot, take note.


p.s.  here's Uniqlo's website
p.p.s.  here's its corporate page

Jeffrey Toobin's Smack Down of the SCOTUS Qs

During my trip to Asia, I read a lot (because it is what I do, as my father-in-law pointed out to me).  I used the time to catch up on my New Yorkers, and I absolutely must highlight Jeffrey Toobin's smack down of the justices' questions concerning the health care act.  In the April 9, 2012, edition, Toobin wrote:

"The key issue in the case is whether congress, in passing the [Affordable Care Act], exceeded its powers under the Commerce Clause of the Constitution, which allows the government to regulate interstate commerce.  Consider, then, this question, posed to [Solicitor General Donald] Verrilli by Justice Anthony M. Kennedy: 'Assume for the moment that this' -- the mandate -- 'is unprecedented, this is a step beyond what our cases have allowed, the affirmative duty to act to go into commerce.  If that is so, do you not have a heavy burden of justification?'  Every premise of that question was a misperception." (Emphasis added.)

Ha!  Toobin then goes on to explain that the national government has been involved with the health care market since the 60's since Medicaid and Medicare and that the heavy burden is actually on the other party (the challengers to the law) according to case law.  Toobin then remarks on how previous cases have set up a deference to Congress on such matters but that these justices were taking it upon themselves to become legislators along with justices.  He really seals his article with the zinger, "The awesome, and final, powers of the Justices are best exercised sparingly and with restraint.  Their normal burdens of interpreting laws are heavy enough.  No one expects the Justices to be making health-care policy any more than we expect them to be picking Presidents, which, it may be remembered, is not exactly their strength, either."  ZAP!  Way to go, Toobin!

I'm so glad that such a well-respected SCOTUS writer and critic has really taken the justices to the woodshed for trying to overstep their powers.  Unfortunately, as is so often pointed out, the justices live in a very secluded life and often do not interact with true American humanity or culture.  I hope that for this issue that will greatly save the country's long-term fiscal policies and sustainably provide for the people very much unlike themselves, the justices will step outside their ivory towers when issuing their decision.

Highlighting a New Yorker Article: The Poverty Clinic by Paul Tough

As many of you know, I am an avid New Yorker reader. It's just so full of interesting articles that are well-written and such clever cartoons that receiving it is really a high point of my week. As I've been knee-deep in my own writing for my recently submitted scholarly paper (Uncovering the Common Grounds of TennCare Stakeholders: A Complete Timeline from 1935-2010 with the Stakeholders' Perspectives) that I haven't posted in awhile and that I have become consumed with health care policy. In the March 21, 2011, edition of The New Yorker, Paul Tough wrote about Dr. Nadine Burke and her Bayview health clinic in San Francisco. She is busy working on research proving a relationship between a stressful childhood and later physiological problems such as heart disease, cancer, asthma, diabetes, etc. One study has been done, and it showed a causal relationship between diseases with adult-onset with higher rates of childhood exposure to violence, sexual abuse, divorce, drug exposure, and neglect. However, that study was discounted by the medical community, as a whole, because of its retrospective nature. Thus, Dr. Burke along with other researchers and a group in New Zealand are completing prospective research on any possible causal relationship.

If such a relationship is proven, it raises the bar for society to protect its children. It would also begin to question, how much violence, abuse, neglect, etc., are we, as a society, willing to accept or live with, knowing that the effects go beyond perpetuating the cycle of poverty and imprisonment and extend to massive health care costs that were preventable. Balanced in with the desire to control future costs and preserve future health of our citizens is the constitutional right to parent and raise children. Would these potential outcomes further blur the line of what is acceptable and what is not? I can see a two-tier system developing to where those who are on government-funding now would be under higher scrutiny than those wealthy enough to provide for themselves and their families because the children of needy families will likely grow up to also be needy themselves. It would be like a justified big brother system: because I'm paying for you now, and I'm going to be paying for you in the future, you've got to really toe the proverbial line so I can minimize your costs to me in the future. I think there would need to be a strong stand to protect constitutional rights for those receiving aid while also trying to put the best interest of the child first.

I recommend all read Tough's article (and have a little chuckle about the cartoon on p.30).