As we enter the 64th day of the nation’s worst environmental disaster, Americans’ opposition to offshore oil drilling continues to grow. CAP’s Daniel J. Weiss has the details.
One of the most abusive corporate practices embraced by the Supreme Court in recent decades is the use of “forced arbitration” clauses to kick injured parties out of court. As the Wonk Room previously explained:
The scam works like this: beginning in the 1980s, the Supreme Court rewrote federal law to endorse a practice known as “forced arbitration.” Under this practice, companies ranging from nursing homes to cell phone companies to employers can refuse to do business with anyone who doesn’t give up their right to sue or be sued in a regular court presided over by a neutral judge. Instead, consumers and employees are shunted into a privatized, corporate-run judicial system, which overwhelming favors corporate parties.
Until today, however, ordinary Americans had one safety valve they could invoke to escape from some of the most abusive arbitration clauses–they could challenge the arbitration agreement itself under various legal grounds sufficient to void any contract. They might claim, for example, that they were defrauded into signing the arbiration agreement, or that the agreement is so one-sided in favor of the corporate party that it should be invalidated. Such claims rarely worked, but they at least provided a small check on this abusive practice, and they at least allowed the claim to be considered by a real judge in a real court.
Today, in a 5-4 decision in Rent-a-Center v. Jackson, the Supreme Court largely closed this escape valve. In a difficult-to-follow opinion by Justice Scalia, the Court holds that, with very rare exceptions, a party claiming that they were tricked, trapped or forced into an arbitration clause is no longer allowed to challenge that clause in court. It’s as if BP said that all suits brought by victims of the Gulf oil disaster must present their complaints to a BP executive, and only that BP executive can decide whether or not they are entitled to damages.
Without access to a neutral and unbiased judge, victims of arbitration clauses are trapped into corporate-owned courts that virtually never rule in ordinary Americans’ favor. The practical effect of today’s decision is that millions of Americans will be left with absolutely no recourse whatsoever when they are harassed at work, scammed by their credit card company, or even raped by co-workers.
Last week, Bloomberg reported that BP experienced serious problems with its Deepwater Horizon operation in early February — two months before the fatal explosion that sunk the rig in April — when it struggled to seal cracks found in the well. It informed the Minerals Management Service on February 13th that the cracks were causing uncontrollable bursts of natural gas. Gas surges “are common in oil drilling,” and companies sometimes abandon wells if they determine the risks are too high, but BP chose to press on anyway. Today, under the headline “Should Pres. Obama Resign Over Feb. 13?,” right-wing radio host and Fox Forum contributor Kevin McCullough picked up the story for Fox Nation and jumped to the remarkable conclusion that President Obama is somehow responsible and should probably resign for BP’s negligence:
While defending his own policies President Obama has routinely been rude and sarcastic to his predecessor, George W. Bush. Yet Obama appears to be making the resident of the previous White House look like a genius compared to his own serious missteps in office. [...]
It seems incomprehensible that the president and other members of the administration still have jobs when it is now being reported that the federal government was apprised by BP on February 13 that the Deepwater Horizon oil rig was leaking oil and natural gas into the ocean floor.
What’s “incomprehensible” is that McCullough would skip straight to calling for Obama’s resignation, without even pausing to consider that perhaps someone from BP — say, the actual person in charge of the well, BP CEO Tony Hayward — should resign first for ignoring this obvious warning sign, along with many others. McCullough offers no criticism of BP, and instead paints them as a helpless victim, begging for the administration to bail them out. After praising newly-crowned “genius” Bush some more, McCullough sagely advises Obama to “change your tactics” and “appear to care” — “Otherwise resign.”
In the wake of the financial crisis — which was driven in large part by Wall Street firms fueling the subprime lending bubble — the Federal Reserve has been looking at ways to rein in Wall Street pay packages, which incentivized bankers and traders to take excessive risk without fear of losing their gargantuan bonuses should their risk-taking backfire. Back in October the Fed began this process, and today it released its final guidelines.
In order to form these guidelines, the Fed looked at what steps banks have taken since the financial meltdown to mitigate riskiness in their pay. To put it mildly, the Fed was not impressed by what it found, announcing that it will “be following up on specific areas that were found to be deficient at many firms”:
– Many firms need better ways to identify which employees, either individually or as a group, can expose banking organizations to material risk;
– While many firms are using or are considering various methods to make incentive compensation more risk sensitive, many are not fully capturing the risks involved and are not applying such methods to enough employees;
– Many firms are using deferral arrangements to adjust for risk, but they are taking a “one-size-fits-all” approach and are not tailoring these deferral arrangements according to the type or duration of risk; and
– Many firms do not have adequate mechanisms to evaluate whether established practices are successful in balancing risk
“Many large banking organizations have already implemented some changes in their incentive compensation policies, but more work clearly needs to be done,” Federal Reserve Board Governor Daniel Tarullo said. “The Federal Reserve expects firms to make material progress this year on the matters identified as we work toward the ultimate goal of ensuring that incentive compensation programs are risk appropriate and are supported by strong corporate governance.”
While the Fed is undertaking this endeavor on its own, the conference committee reconciling the House and Senate financial reform bills also has a role to play in stamping out compensation practices that can ultimately end in systemically risky financial firms going under. The House’s version of the bill gives federal regulators the statutory ability to determine if compensation structures at financial companies (and only financial companies) are aligned with sound risk management. The Senate’s contains no such provision, so the House’s conferees should be fighting for their own chamber’s version.
As Federal Deposit Insurance Corp. Chairman Sheila Bair said, there is “an overwhelming amount of evidence that [compensation structure] is clearly a contributor to the crisis and to the losses that we are suffering.” It’s a good thing that the Fed is acting to prevent a repeat performance by Wall Street, but setting in stone some rules for the regulators to follow would be even better.
This afternoon, Faisal Shahzad pleaded guilty in federal court in Manhattan to trying to detonate a homemade car bomb in Times Square. Shahzad has been “cooperating with federal authorities,” the New York Times reported.
His failed bombing attempt in May touched off a heated debate about whether Shahzad — a naturalized American citizen — should be Mirandized and tried in federal court, or be subject to a different, dubious legal protocol. Those who opposed the Constitutionally-based law enforcement approach argued Shahzad would not cooperate after being told he had the right to remain silent, and thus authorities would be unable to collect intelligence or convict him.
As the Washington Independent’s Spencer Ackerman sarcastically noted, Shahzad’s guilty plea is “obviously another crucial failure for a law-enforcement-based response to terrorism.” Indeed, Shahzad’s guilty plea puts the National Review’s Andrew McCarthy in an awkward spot. Just this morning — hours before the announcement of the guilty please — McCarthy gleefully declared the failure of the law enforcement approach, citing the Department of Justice’s failure to secure a guilty plea:
Now comes word from the U.S. attorney’s office for the Southern District of New York that Shahzad has been indicted.[...]
Attorney General Eric Holder has been telling anyone who would listen that Shahzad is cooperating and providing valuable information. Civilian due process has been no obstacle at all, Holder insists: no problem posed by Miranda, the appointment of counsel, the prospect of providing discovery, and the dynamics of plea-bargaining. Yet it is highly unusual to indict a cooperator, precisely because it is so strategically disadvantageous to the government. When someone is cooperating, the standard practice is to strike a deal, complete with a cooperation agreement and a guilty plea, in what is known as a “criminal information,” rather than to file an indictment. [...]
An indictment, on the other hand, is the throwdown moment in a criminal case, the opening bell for the first round of a prize fight. It signals that the parties have been unable to work out an agreement and are in an antagonistic posture.
Unfortunately for McCarthy, his eagerness to bash President Obama put him on the wrong side of the facts by about five hours. Of course, this probably won’t stop McCarthy from making up another reason for why the Obama administration has botched this terrorism prosecution.
Here, we use an extensive dataset of 1,372 climate researchers and their publication and citation data to show that 1) 97-98% of the climate researchers most actively publishing in the field support the tenets of ACC outlined by the Intergovernmental Panel on Climate Change; and 2) the relative climate expertise and scientific prominence of the researchers unconvinced of ACC are substantially below that of the convinced researchers.
That is the conclusion of an important first-of-its-kind study published today in the Proceedings of the National Academy of Sciences, “Expert credibility in climate change.”
The findings will come as no surprise whatsoever to 97% to 98% of scientists or regular CP readers — but it could theoretically open the eyes of those in the status quo media who keep suggesting the ‘experts’ they cite that keep pushing anti-science disinformation are somehow close to being equal in number, credibility, or expertise to the broad community of climate scientists, thereby implying serious disagreements among mainstream scientists (see here, here, and here).
A 747 just left:
— I’d volunteer to serve as a “decoy Jew” in Amsterdam in exchange for plane tickets.
— Jerusalem government moving ahead with plan to demolish 22 Palestinian homes in East Jerusalem to make room for a tourist center.
— European bank balance sheets are a mess.
— State governments have room to raise taxes on the rich.
— Greta van Susteren and Glenn Beck debate soccer.
Going to see The New Pornographers tomorrow, here’s “A Bite Out of My Bed”.
On Thursday, Sen. Orrin Hatch (R-UT) introduced two separate measures to repeal “the unconstitutional individual mandate and the job-killing employer mandate, the most egregious elements of this devastating health law.” Now, in a new interview with the National Review the conservative senator who had once supported the individual requirement to stop health reform in 1993, explains his strategy of targeting the individual requirement:
“By attacking the mandates, we take away the Democrats’ arguments against our calls for full repeal, where they say we’d take away protections for people with preexisting conditions,” Hatch explains. “ Focusing on the mandates enables us to shine a light on the most unconstitutional aspects of this lousy piece of legislation. It compels them to talk specifics. Let’s remember that these mandates are the central tenets of Obamacare. Gut them and the law falls apart.” [...]
“President Obama, if reelected, will try to move the country to a single-payer system. That’s my theory, at least,” he says. “They know this system isn’t going to work, so they’ll be ready to say, ‘Why don’t we let thegovernment take care of it, and we won’t tax anybody.’ That’s what they want to see happen. And if that happens, it’ll be over.” What’ll be over, senator? “The greatest country in the world,” he says. “We’ll lose our status as the greatest.”
The single-payer paranoia aside, all of this makes very little sense. By revoking the mandate, Hatch is eliminating the incentive for younger and healthier individuals to purchase coverage and is actually encouraging people to buy insurance only when they become sick. Under these circumstances, the pool of applicants will eventually become weighed down with sick people, increasing costs for everyone and actually forcing healthier people out of the pool. The result is a death spiral in which coverage becomes increasingly expensive and undoes all the consumer protections that Hatch is touting — i.e. protections for people with preexisting conditions. And it’s these increasing costs that Hatch is not very concerned about. As his staffer explained to me on Thursday, “[cost] might be the concerns of some, our concern is about the constitutional questions about it.”
Here’s a great chart Chad Alderman pulled from a Knight Commission report taking a look at spending priorities in the SEC:
It’s important to note here that the vast majority of schools lose money off athletics. In 2008, less than a quarter of sports powerhouses made money off their athletics programs, and collectively these same institutions lost nearly $1 billion on sports. These funds must be made up by state taxpayers or student tuition bills. Find out how much your school spent with this handy database put together by researchers at USA Today.
The aggregate impact of all this on American educational attainment probably isn’t all that big, but it’s not nothing either. We pioneered mass higher education in this country, but more recently we’ve been falling behind, and our habit of combining the function of a college with the functions of a professional sports franchise isn’t helping.
It’s trendy to be undead these days. Sure sexy teenage vampires get all the media attention. But don’t forget those mad (political) scientists who toil tirelessly in their labs, assembling the best (worst?) parts of corpses, mixing in 100 million gallons of oil, and zapping the finished product with, say, the enormous power furnished by an electric (utility) cap.
I think we might call the resulting assemblage Lugar-Kerry-Lieberman-Graham-Cantwell-Collins-Waxman-Markey-Bingaman. The conventional wisdom for months in this town, as I’ve noted many times, has been that a climate bill is dead, dead, dead. How dead? We’re talking stick a fork in it and eat it with fava beans and a nice chianti!
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