Small banks and other regulated businesses now live at the permission of arbitrary regulators in a legal system that no longer protects individual rights. That’s the message of a letter sent to shareholders earlier this year by Frank H. Hamlin III, CEO of the small Canandaigua National Bank in upstate New York. In particular, Hamlin cites the way the office of New York attorney general Eric Schneiderman has pushed around two other upstate banks (not his) on ill-defined redlining charges based on doing too much of their lending in the suburbs. I write about it in a new post at Cato at Liberty.
I write at Cato about the accomplishments of Ida Wells (1862-1931), who after being born into slavery in Mississippi became the leading voice documenting the horrors of lynch law in late nineteenth century America, as well as a free speech heroine (a mob in Memphis attacked and destroyed her printing press). Wells is also the subject of today’s Google Doodle. And as I learned from Nicholas Johnson’s post last year at Volokh, she was a notable figure in the history of the Second Amendment as well.
As I recount at Cato at Liberty, a new report from the Equal Justice Initiative on the long history of lynching in the South, combined with a federal judge’s widely noted speech upon sentencing three men in a racially oriented Mississippi killing, can bring us to think about how far America has fallen short of the ideal of the rule of law in some periods, and how far it has come since. [& Rod Dreher]
I could find about a thousand far more sympathetic examples of folks screwed over by government land use regulations — e.g. people whose puddle in the backyard is suddenly a wetlands that they can’t build on. But for some reason Conservatives all rushed to pile on this one example. Stupid.
Only a thousand?
If you imagine that Nevada rancher Cliven Bundy is some sort of constitutional conservative, Josh Blackman wants to direct your attention to the Property Clause as well as the Supremacy Clause of the (actually existing) U.S. Constitution. He also has some thoughts on the Equal Footing Doctrine (states come into the union on an equal footing to the original 13), and on the rule of law in the context of the alleged right to flout court orders. Earlier here, with many reader comments, and more from Charles C. W. Cooke.
Last week twenty-eight Democratic senators sent a letter (PDF) to Acting CPSC Chair Nancy Nord the gist of which can be summed up as, “Never mind the law we passed, start enforcing the more reasonable law we wish we’d passed”. Neat move, if somewhat at odds with the concept of the “rule of law”.
Rick Woldenberg scrutinizes the politics (with particular attention to ATVs/minibikes) and also points out something seldom brought out in press accounts: the last 23 commission votes on CPSIA have been settled by 2-0 votes, with reputedly “good” CPSC commissioner Thomas Moore (cozy with Congress, vocally pro-CPSIA, a Democrat) voting exactly the same way as Nord, the reputedly “bad” commissioner (at odds with Congress, unenthusiastic about much of CPSIA, known to be a Republican, etc.) Which particular decisions, one wonders, would have turned out differently had some new appointee been installed in the vacant third seat, as Rep. Henry Waxman is reputedly demanding as a precondition for even considering hearings on the law? Woldenberg makes the same point today in a Chicago Tribune letter to the editor, responding to an exceptionally lame April 4 editorial in that paper. More on CPSC politics: news-side WSJ; Nord responds to attack from Sen. Durbin, and requests that President Obama name permanent chair to replace her (more). (Update: the National Law Journal is out with coverage of the “furor” CPSIA has set off in Washington).
On a brighter note, AmendTheCPSIA has posted videos (slow loading) of the Capitol Hill rally two weeks ago to demand action on the law. Here’s the video of dirtbike racing dad Rod Yentzer and 6-year-old (!) son Chase:
And here’s bike dealer Steve Burnside of DSD Kawasaki in Parkersburg, West Virginia:
Also, Carol Baicker-McKee has a another excellent post on the rally, while Rick Woldenberg discusses the politics of the event. Earlier rally coverage here.
Public domain image: Yankee Mother Goose (1902), illustrator Ella S. Brison, courtesy ChildrensLibrary.org.
I’ve got a new piece just up at City Journal on last week’s occupation of the Republic Windows and Doors factory in Chicago, led by a union on the left fringe of the American labor movement. The action ended after six days with the capitulation of Bank of America and Chase under intense political pressure. Earlier coverage here. A few points:
- You’d have had trouble guessing from a lot of the coverage, but it’s far from clear that the window factory owners owed any severance at all under the terms of the federal WARN (plant-closings) act. And it’s abundantly clear that the actual targets of the protest, the two banks, owed nothing.
- The whole point of this sort of illegal action is to resolve by force a dispute that would otherwise be consigned to the ordinary processes of law — put differently, to make sure the action’s targets never get their right to a day in court to put forth their (quite possibly meritorious) defense. When Chicago and Illinois officials jumped in to arm-twist the targets into settling, they endorsed this way of resolving disputes. That may come as little surprise given the reputation of Chicago governance. But why should anyone feel secure in locating a politically sensitive business in that city (or state) from now on?
- Among those who either cheered the illegality or viewed it with complacency are not only high public officials but law professors, commentators and leaders of the legal profession. Indeed, President-elect (and former law professor) Barack Obama vocally backed the union’s cause at a press conference while pointedly saying not a word about its unlawfulness of its actions. Should we ever again take seriously the rumblings of any of these parties about the all-importance of the rule of law?
- Some in the media, like Boston Globe columnist James Carroll, applauded the illegal action and left-leaning Washington Post columnist Harold Meyerson called for more of the same: “Barack Obama means to build a more equitable nation, but it would help him in that task if more workers sat down”. Does Obama agree?
(cross-posted from Point of Law).
Overlawyered is a natural read for mediators such as myself. The high cost of litigation. Expensive. Procedurally encrusted and, with electronic discovery, a 21st century e-Bleak House. Endless legal process for those with the funds to foolishly waste on pre-trial dispositive motions; appeals; returns to the trial court; verdicts; motions for new trials and judgments notwithstanding the verdict, further appeals. A process that is brutal on the people and an enjoyable though intense board game to the lawyers who participate. Lawyers for whom winning everything because that’s our job. Win. Not write a brilliant motion. Not make a cogent closing argument. Not buy our witnesses $150,000 in new clothes. All that might be necessary. But without the win, pointless.
Having said that — and having personally experienced the case that went to trial only after it was “old enough to drive” (the Stringfellow Insurance Coverage Litigation) — what I am about to say may surprise Overlawyered’s readers.
The rule of law (and the human resources necessary to keep its machinery running) accounts for a full 57% of the wealth of developed nations like ours.
This statistic comes not from the ABA, some self-serving trial lawyers association (i.e., the Plaintiffs’ bar) or a left-leaning academic at an Ivy League University. No. This comes from the World Bank!
Human capital and the value of civil institutions – as measured by the rule of law – constitute not just a part of the economic well-being of nations, but the largest share of wealth in virtually all countries.
The statistics compiled by the World Bank should surprise you as much as they did me:
Once one takes into account all of the world’s natural resources and produced capital, 80% of the wealth of rich countries and 60% of the wealth of poor countries is of this intangible type. [According to] the World Bank[‘s] economists . . . . the rule of law explains 57 percent of countries’ intangible capital. Education accounts for 36 percent.
We need only return to the first principles we were taught in law school — certainty of contracts, for instance — for the following figure to be less than completely astonishing:
the natural wealth in rich countries like the U.S. is a tiny proportion of their overall wealth—typically 1 percent to 3 percent.
Why? Because we
derive more value from what [we] have. Cropland, pastures and forests are more valuable in rich countries because they can be combined with other capital like machinery and strong property rights to produce more value.
And the role of the rule of law here? Predictability — trust in civic, political and financial institutions (cf. the stock market when it’s working productively) — freedom of contract, the internalization of legal precedent for managing disputes that are never litigated, and many more efficiencies made possible by the mere presence of a working justice system in America.
I write this as we experience an unprecedented Presidential campaign, the result of which is uncertain and, to many people, frightening.
All I can say to those filled with fear of a McCain or of Obama presidency, is to remember this — America’s political institutions and the people who elect representatives to serve them are more powerful than any single man (or woman). Whoever is elected, we retain the power to eject him if he over-reaches. So let’s get past this ENDLESS campaign and laissez le bon temps roulez!