Wednesday, August 23, 2017

Luther, Roy, and Alabama

Old times there are not forgotten. . . .
Dixie Land

Alabama is back. It hadn’t gone far, but whenever it returns, it fills the heart of the observer with wonder. Its most recent re-entry onto the national stage is occasioned by its September run-off election to fill the senate seat left vacant when Jeff Sessions became DJT’s attorney general.

The qualities of the Republican candidates running in that election bring to mind, for reasons unrelated to the upcoming election, (except that it also happened in Alabama,) the letter sent out to parents by the W.F Burns Middle School in Valley, Alabama, in 2015. The letter suggested that all children attending that school be armed with “canned goods” to protect themselves should an intruder enter their classroom. The letter said: “We realize at first this may seem odd, however, it is a practice that would catch an intruder off-guard. The canned food item could stun the intruder or even knock him out until the police arrive. The canned food item will give the students a sense of empowerment to protect themselves. . . .” It takes someone who lives in Alabama to feel secure when contemplating a roomful of middle schoolers throwing cans of food at an intruder who would, in all probability, be armed with something more lethal than a can of corn. As odd as this may seem, it is no odder than the run-off election that will take place in Alabama in September, where the two Republican contestants are Roy Moore and Luther Strange. On a comparative basis, Roy is stranger than Strange. The strange thing about Strange is how he became the replacement for Jeff Sessions as United States Senator, when Sessions gave up his senate seat in order to become DJT’s attorney general. The strange thing about Roy is Roy.

In April 2016, the Alabama House announced that articles of impeachment would be introduced to impeach then Governor Robert Bentley for corruption and neglect of duty because of an affair the Governor had with one of his former aides. The House Judiciary Committee conducted the investigation on behalf of the House. In early November, Luther, who was the attorney general for the state, wrote the Judiciary Committee saying it: “would be prudent and beneficial to delay the work of the House Judiciary Committee on impeachment. . . . I respectfully request that the Committee cease active interviews and investigation until I am able to report to you that the necessary related work of my office has been completed.” In response, the Judiciary Committee suspended its activities. On February 11, 2017, the governor appointed Luther to the United States Senate. On April 10, 2017, Governor Bentley resigned. Only someone familiar with how things work in Alabama would tie Luther’s instructions to the House Judiciary Committee to the Governor’s appointment of Luther to the United States Senate.

Luther’s competition in the September 26 run-off election is Roy Moore. Roy has the distinction of being, probably, the only person in the history of the United States to have served as the Chief Justice of a state’s highest court, and to have been removed from his position the first time he served, and barred from continuing to act the second time he served.

Roy’s career as Chief Justice began in 2000 when he was elected to that post. One of the first things he did upon assuming the chief justice’s office, was to have a 5,280-pound granite monument of the Ten Commandments built, and following its construction, installed in the central rotunda of the State Judicial Building. Litigation over the propriety of this installation followed and the 11th Circuit Court of Appeals upheld a district court order for removal of the monument. Roy refused. As a result he was removed from the court by the Alabama Court of the Judiciary and the monument was removed from the rotunda by a large crane.

Ambition awakened again in Roy, and in 2012 he decided he would make a good chief justice notwithstanding his earlier disgraceful departure from that office. He ran again, and was elected to the position by the people in Alabama who had either forgotten about or didn’t care about his earlier service. Once again, Roy believed himself to be above the law. After a federal judge ordered Alabama probate judges to issue marriage licenses to same-sex couples, Roy ordered the judges to ignore the federal court order. After a trial before the Judicial Inquiry Commission, he was found guilty of 6 violations of the Judicial Ethics by the commission and suspended as Chief Justice of the Court. He continued to draw a salary, but the commission’s order said he could not remain an active member of the court. On April 17, 2017, the ruling of the Commission was upheld by the Alabama Supreme Court and on April 27, 2017, Roy resigned from the Court. One day later he announced that he was running for the United States Senate seat held by Luther Strange. The primary election that took place on August 15, 2017, provided Roy with enough support to permit him to compete against Luther in the run-off election.

The foregoing goes to show that in Alabama you can’t keep a good man down. The quality of the two candidates in the run-off, however, suggests you may have trouble finding good men.


Thursday, August 17, 2017

More Banking Follies

A power has risen up in the government greater than the people themselves, consisting of many and various and powerful interests . . . and held together by the cohesive power of the vast surplus in the banks. 
—ohn Calhoun, May 27, 1836 Speech

It was a sad coincidence. It occurred within a couple days after the public was apprised of Wells Fargo’s new foray into discovering ways to make more money by bilking its customers. It was not, of course, a first for that venerable institution. Last year it was learned that millions of customers of the bank had bank accounts and credit cards opened for them by employees of the bank, without being authorized to do so by the customer. If the employee had not only opened the account, but had caused the bank to deposit, for example, $1000 into the account in order to give it life, the practice would not have upset the unsuspecting customers. Instead, the employees simply opened the accounts and, instead of depositing money into them, charged the account holders fees for creating the accounts and associated fees for services that accompanied the new accounts. That, of course, did not please the customers and, when the practice was discovered, caused the bank to pay a $185 million dollar fine and $142 million to the millions of its customers who were victims of the bank’s practices. Wells Fargo was just beginning to recover from the reputational losses it suffered from what, in Trumpian terms would be described as “fake” bank accounts, when it was disclosed that its employees had discovered a new way of bilking customers-insurance sales connected with car loans.

In late July 2017, we learned that approximately 500,000 bank clients were sold car insurance when taking out car loans with the bank, even though they already had car insurance. According to reports, the bank will pay $80 million to clients who were bilked. Whether fines will be imposed on the banks will not be known until some time in the future. (In fairness to Wells Fargo it should be noted that in 2013 JPMorgan Chase paid $13 billion in fines and penalties for some of its activities. It makes Wells Fargo’s recent activities seem trivial.) The other event of note that happened at the end of July was purely coincidental.

The coincidence occurred when we learned that Congress was on the verge of getting rid of a new rule that had been proposed by the Consumer Financial Protection Bureau. The rule, if permitted to go into effect on January 1, 2018 as planned, would let consumers band together when they were defrauded by banks, and sue the banks as a group in what is known as a “class action.” Under current practices, individuals defrauded by bank practices, such as those undertaken by Wells Fargo, cannot bring class action lawsuits, but are forced into arbitration by virtue of the agreements they signed when entering into transactions with the bank. The rule proposed by the Consumer Financial Protection Bureau and was to take effect on January 1, 2018, would ban compulsory arbitration. Once it became effective it was estimated it would cost banks approximately $1 billion a year. That seems to many observers like a lot of money, but banks are believed to have roughly $171 billion in profits annually, so the rule is not as onerous as it might at first seem.

Keith Noreika, the acting Comptroller of the Currency, has said he has no plans to try to block the rule even though he thinks it is a bad rule. Indeed, in addressing the effects of the rule were it to go into effect he said: “Ultimately, the rule may have unintended consequences for banking customers in the form of decreased availability of products and services, increased related costs, fewer options to remedy consumer concerns and delayed resolution of consumer issues.” What he is, of course suggesting, is that if the rule were to go into effect, banks, confronted with the possibility of law suits and the need to defend their practices in front of juries instead of boards of arbitration, might decide to no longer issue credit cards or otherwise deal with consumers. Because of the actions of the House of Representatives and, once it returns to Washington, the Senate, Mr. Noreika will never have to explain what he meant when he said that: “The rule [if put into effect] may turn out to be the proverbial straw on the camel’s back.” Mr. Noreika will never have to explain why, a $1-billion-dollar reduction in profits for the camels (qua banks) would be the straw that would put them out of business. That is because, availing itself of procedural steps it can take under the Congressional Review Act to avoid the implementation of recently enacted regulations it dislikes, the House of Representatives passed a “resolution of disapproval” to revoke the rule before leaving on its well-deserved five-week vacation. The Senate is expected to follow suit when it returns from its holiday. The camel, whose back was threatened by a straw, can be heard breathing a big sigh of relief. The consumer can be heard simply sighing. Christopher Brauchli can be emailed at brauchli.56@post.harvard.edu. For political commentary see his web page at http://humanraceandothersports.com


Tuesday, July 18, 2017

A Letter to Trump

When one knows thee, then alien there is none, then no door is shut.
Robindranath Tagore, Gitanjali (1913)

Dear Mr. Trump,
Forgive me for not addressing you as president but the words do not permit themselves to be formed when I think of that word and you. If you read my columns you have probably noticed that in order to overcome this shortcoming, I only refer to you as DJT. Notwithstanding my feelings, I have a suggestion I am imparting, because I think you would find it would eliminate the need for you, when attacking the press, to limit yourself to 140 characters. If you follow my suggestion, you will be able to bring the press to heel and free up your twitter account for other kinds of ad hominem attacks that you so obviously enjoy.

I am writing to tell you that you are not the first ruler of a country to be troubled by a meddlesome press. You, of course, know that there are countries today ruled by friends of yours, like Vladimir Putin in Russia or Recap Erdogan in Turkey, who deal with a press they perceive to be hostile by imprisoning or arranging for their members to have unfortunate encounters. Although that is efficient, you probably realize that, in the United States today, that is not possible. What you are less likely to know, given your aversion to matters of substance, is that that was not always the case in the United States. Proof of that can be found in the Alien and Sedition Acts that were passed by Congress and signed into law by President John Adams in 1798. They comprised four laws, and you’d have loved each of them. The first was the Naturalization Act. Talk about a winner! That law made it harder for immigrants to become citizens, extending the time they had to live here in order to get citizenship, from five to fourteen years. Two other laws you would have liked were the Alien Friends Act, that gave the president authority to deport non-citizens the president thought were dangerous, and the Alien Enemy Act that permitted the president to deport non-citizens from hostile nations. Talk about “Making America Safe Again!”

But I’m not referring you to the Alien and Sedition Acts because of those laws. It’s because of the Sedition Act of 1798. That Act criminalized speech.  Fines and imprisonment could be used against those who “write, print, utter, or publish . . . any false, scandalous and malicious writing against the government of the United States or the President of the United States with intent to defame. . . or to bring them into contempt or disrepute.” Talk about dealing with “fake news” purveyors without having to rely on a tweet. The most famous example of the application of this law can be found in the case of a sitting United States Congressman, Vermont Representative Matthew Lyon. In 1798 Rep. Lyon wrote a letter critical of President John Adams that could easily be written today by a congressman speaking of you. In his letter he criticized President Adams for his “unbounded thirst for ridiculous pomp, foolish adulation, and self avarice.” For his comments Rep. Lyon was sent to prison for four months and, while imprisoned, re-elected to Congress.

My suggestion for you assumes that sending CNN and all its reporters to prison, would be far more gratifying for you than simply tweeting about them. Of course, tweeting offers more instant gratification and I know that is important for you. But I think a few front page pictures of CNN reporters entering a prison in handcuffs would ultimately prove to be far more gratifying for you than a tweet. My suggestion is that you send a 21st Century version of the Sedition Act to Congress ASAP.

I know that some of your advisors may counsel against trying to enact a new Sedition Act. They may tell you that in the case of New York Times Co. v. Sullivan, the U.S. Supreme Court said: “Although the Sedition Act was never tested in this Court, the attack upon its validity has carried the day in the court of history.” In a concurring opinion in another case, Watts v. United States, Justice Douglas said: “The Alien and Sedition Laws constituted one of our sorriest chapters; and I had thought we had done with them forever. . . . Suppression of speech as an effective police measure is an old, old device, outlawed by our Constitution.” Your response to those advisors is a simple one. By the time you have convinced Congress to pass the Sedition Act of 2017, and it arrives at the U.S. Supreme Court, that Court will be, if it not already is, a Court that will see nothing wrong with such a law, and will gladly support the criminalization of free speech when applied to those speaking of you.

I hope this letter helps you as you continue to make America Great Again.

Very Truly Yours,
Christopher R. Brauchli

P.S. You may also find that someone who says the sorts of things about you that Mr. Lyons said about President Adams, can be sued by you for libel.