quotas

Four Radicals Renominated to Federal Judgeships

by Hans Bader on January 8, 2011

in Legal

On Wednesday, President Obama renominated four radicals to federal judgeships, even though their nominations previously died in the Senate. A week earlier, he made six controversial recess appointments. Those sharply partisan and ideological acts contradict his recent rhetoric about the need for “bipartisanship.”

Obama once again nominated John J. “Jack” O’Connell, who gave hundreds of thousands of dollars to liberal politicians.  O’Connell used $2.5 million in state-settlement money to pay off a creditor, in an unethical diversion of state funds. Using political influence, he got himself hired to bring a costly and futile lead paint lawsuit that “achieved nothing, other than waste thousands of hours of attorney time.” The U.S. Chamber of Commerce opposed O’Connell’s nomination — the first time it ever opposed a federal judicial nomination.

Obama renominated Edward Chen, a fervent advocate of racial preferences who unsuccessfully challenged a provision of the California Constitution banning racial discrimination and preferences. Chen also “objected to the singing of ‘America the Beautiful’ at a funeral because of his ‘feelings of ambivalence and cynicism when confronted by appeals to patriotism.’”

Radical law professor Goodwin Liu was also renominated. As lawyer Ted Frank noted in the Washington Examiner, Liu once claimed that racial quotas are not merely permitted, but constitutionally “required.”  If confirmed, Liu would sit on the Ninth Circuit Court of Appeals, a sharply-divided federal appeals court with jurisdiction over a whopping one-fifth of the American people. Liu wrongly argued in the past that the Constitution requires some forms of welfare, although he denied supporting such a constitutional right to welfare in his more recent testimony before the Senate Judiciary Committee, when he experienced a politically-convenient confirmation conversion after his nomination became controversial.  Although Liu briefly worked for a law firm, Liu has no experience actually trying cases, despite the fact that judges are supposed to have “substantial courtroom and trial experience” (a fact that did not keep the staunchly liberal ABA, which shares Liu’s ideology, from supporting his nomination despite his lack of this basic qualification).   Liu has claimed that “‘free enterprise, private ownership of property, and limited government” are right-wing concepts and ideological “code words.” Liu is also a big user of politically-correct psychobabble, writing that a judge is supposed to be a “culturally situated interpreter of social meaning” rather than an impartial umpire who interprets the law in accord with its plain meaning or its framers’ intent.

Obama also renominated Louis Butler, who was so extreme that he was removed from the Wisconsin Supreme Court by voters in 2008 (the first time the state’s voters had removed a Justice since 1967).  Butler’s empathy for criminals was summed up by his nickname, Loophole Louis.

Sex in the Board Room!

by Fred Smith on October 21, 2010

in Culture, Odds & Ends, Politics as Usual

Over at the Boards at their Best blog, James Kristie, editor of the journal Directors & Boards, recently proposed a rule requiring that at least 40 percent of corporate board members be women.  Support for diversity on corporate boards has become customary.  But, for some diversity advocates, voluntary change is no longer viewed as sufficient.

In 2003, Norway enacted a law setting a 40 percent gender quota for that country’s corporate boards.  Firms that fail to comply face dissolution!  Now Kristie wonders why we don’t bring just such a law here to the United States, and his is not an isolated view.  Having asked the question, though, Kristie sought out a range of opinions from various experts, and these are featured as the cover story in the fall 2010 edition of the journal.  You can read my contribution here.  Since the length was tightly limited, I thought I’d expand on my thoughts and add a few points I couldn’t make in that shorter format.

It’s no surprise that a proposal like this would be adopted first in Norway. After all, including women in political governance has long been a Nordic tradition – Gro Harlem Bruntland became the first female (and youngest) Norwegian Prime Minister way back in 1981.  But is it wise to dictate that kind of diversity in corporate governance?  I suggest the answer is no.

There are important differences between politics and business, and it does no one good to blur those distinctions.  Governments may need diversity to legitimize their ability to exert coercive power, but firms have only the power granted them by consumers.  Whether women or men, Catholics or Protestants, engineers or accountants would strengthen a board’s ability to meet these challenges is best determined by consumers via competition.

Corporations are specialized entities organized to meet specialized human needs.  Corporate boards oversee these institutions, seeking to ensure that top managers effectively coordinate the firm’s employees to achieve that task.  And the modern corporation has been extremely effective in aligning the self-interest of firms and their employees to advance human welfare, as John Micklethwait and Adrian Wooldridge document so well in their book, The Company.  They achieve in the large what Adam Smith noted long ago happens in the small: “It is not from the benevolence of the butcher the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”

Corporate boards oversee these management decisions, so the challenge of selecting the appropriate mix of individuals to play these roles is critical.  Why would we expect politicians (focused on the general duties of government) to better select the specialized team needed to achieve these highly specialized tasks?

Not surprisingly, proponents see the Norwegian law as a “great success.”  Kristie, for example, notes that, “In 2003 women represented 7% of board directors in Norway.  Today, that total is 40%.”  What else would we expect when the law mandates that at least 40 percent of corporate directors be women?  But, while this surely benefits those women who’ve been promoted to the boardroom, is it good for their firms?  Is it good for society?  A recent University of Michigan study notes that the law has reduced corporate performance.  The reasons for this are unclear, though the authors suggest it may reflect the shorter workplace experience of the women appointees.

As in so many cases, politics is impatient.  Technological and institutional innovations have reduced the biological pressures for differentiated sexual roles, and those factors are having major impacts (note how the proportion of women in MBA and legal programs has exploded in recent decades).  Feminists may argue that “justice delayed is justice denied!”  But is it wise to promote those women now playing valuable mid- and senior-management roles to the boardroom before they’re ready?  The Norwegian experience suggests not.

The private world experiments and adopts changes as they prove their competitive value.  It is not surprising that these factors will operate very differently in different business sectors.  But, when innovations prove their worth, they are adopted.  Politicians may gain voter support by promoting such policies, but they may well harm consumers far more than we realize.  It is far better to strengthen competition and allow the market to determine what firms do — and with whom they select to do it.

Regulation of the Day 131: Airport Vendors

by Ryan Young on April 1, 2010

in Deregulate to Stimulate, Economy, Mobility, Politics as Usual, Regulation, Regulation of the Day

A regulation passed in 2005 states that “at least 10 percent of all business at the airport selling consumer products or providing consumer services to the public are small business concerns (as defined by regulations of the Secretary) owned and controlled by a socially and economically disadvantaged individual (as defined in section 47113(a) of this title).

The requirement that the size of a business be taken into account is puzzling; a company’s size has little to do with whether it will do a good job or not.

I would also argue that airports are disadvantaged enough, having already to deal with the TSA, the FAA, the DOT, and others. Snark aside, airports are poorly run, almost without exception. Forcing them to hire vendors and contractors on factors other than price and performance is unlikely to improve matters.

Disadvantaged business quotas bring up a third issue: What happens if a disadvantaged business owner prospers through her hard work, and can no longer be considered disadvantaged? Does she get kicked out of the airport?

That thorny question would have been put to rest on April 21 of this year, when a built-in sunset provision would have made the regulation expire. Wayne Crews and I have written before favoring sunset rules for all new regulations. It’s a painless way to automatically get rid of rules when they become obsolete, or that turn out to be more trouble than they’re worth.

If a rule merits another five years on the books, Congress should be able to vote on it.

In this case, however, the Department of Transportation is getting set to renew the disadvantaged quota program all by itself. Permanently.

According to the DOT, leaving in the sunset provision “would simply cause confusion and disruption, making it more difficult for all parties concerned to carry out their responsibilities under the statute.”

Laws are supposed to be made by legislative branch, not the executive. What we have here is one more case of regulation without representation, out of thousands. You can read all about it in today’s Federal Register.

Unemployment Rises to 26-Year High of 9.8%; Obama’s Policies Worsen Unemployment and Credit Crunch

by Hans Bader on October 5, 2009

in Bailout Watch, Deregulate to Stimulate, Economy, Employment, International, Labor, Politics as Usual, Stimulus to Nowhere, Trade

Unemployment has risen to 9.8 percent, a 26-year high.

That’s much higher than the Obama administration predicted unemployment would rise, if Congress had refused to pass his $800 billion stimulus package.  The administration claimed unemployment would rise to 8 percent without a stimulus.

Small businesses are finding it more difficult than ever to borrow badly needed money to meet their payrolls.  New financial regulations backed by the administration are contributing to a terrible credit crunch.  Meanwhile, the wealthy Wall Street investment bank Goldman Sachs, perhaps the biggest donor to liberal politicians, received billions of dollars it didn’t even need from the taxpayers’ $170 billion bailout of AIG.

The administration claimed that the stimulus package would deliver a short-run “jolt” that would quickly lift the economy, but unemployment rose very rapidly after its passage, and the package has actually destroyed thousands of jobs in America’s export sector.

Countries that refused to adopt big stimulus packages have fared better than those that imitated Obama. And the biggest-spending countries have suffered worst in the recession.

President Obama claimed the stimulus was needed to prevent an “irreversible decline,” but the Congressional Budget Office said it would actually shrink the economy “in the long run.”  It subsidizes lots of waste, corruption, and welfare, and repeals welfare reform.   It also contains racial set-asides (which are costly) and prevailing-wage rules (which will waste $17 billion).

Stimulus = Welfare + Quotas + Corruption

by Hans Bader on June 20, 2009 · 3 comments

in Economy, Employment, International, Labor, Legal, Personal Liberty, Politics as Usual, Regulation, Stimulus to Nowhere, Trade

Obama’s $787 billion stimulus package is now being used to force states to adopt racial quotas in government contracts, even if their state constitution or civil-rights laws forbid such quotas. Slate’s Mickey Kaus reports that “CalTrans, the huge state agency that spends billions in federal highway construction funds, ‘sets a quota of having 6.75 percent of contracts go to women or members of a targeted group–African American, Asian-Pacific American, and Native American.’”

The stimulus package also repealed welfare reform, as Kaus and the Heritage Foundation have noted. Obama ran campaign ads claiming to support welfare reform, even though he had actually fought against welfare reform as an Illinois legislator.

Obama claimed the stimulus package was needed to prevent the economy from suffering from “irreversible decline,” but the Congressional Budget Office admitted that the stimulus package would shrink the economy “in the long run.” The stimulus package has since destroyed thousands of jobs in America’s export sector, and subsidized countless examples of government waste and corruption.

Recently, Obama fired an inspector general, Gerald Walpin, who uncovered millions of dollars of waste and fraud in the AmeriCorps program, including by a prominent Obama supporter, endangering the Obama supporter’s ability to administer federal stimulus spending in Sacramento.

At least four states (California, Michigan, Nebraska, and Louisiana) have state constitutions that ban racial set asides, but most of those bans contain exceptions for racial set-asides that are requirements for receiving federal funds. No such exception exists to the California Equal Rights Amendment, which was construed in Connerly v. State Personnel Board (2001) to bar gender-based set-asides even when they are permitted under federal law.