An Obama Supreme Court Versus a Romney High Court

SOURCE: AP/J. Scott Applewhite

A detail of the West Facade of the U.S. Supreme Court is seen in Washington.

By Ian Millhiser | September 17, 2012

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See also: Ask the Expert: The Politicization of the Constitutionby Ian Millhiser

The most important legal development in the last decade is the Republican Party’s wholesale abandonment of judicial restraint. Less than a decade ago, President George W. Bush campaigned against “activist judges” who seize the power to “issue new laws from the bench.” And Bush’s Supreme Court appointees peppered their confirmation hearings with the rhetoric of restraint. Chief Justice John Roberts said that he would “prefer to be known as a modest judge,” and he emphasized that when judges make policy judgments, “they lose their legitimacy.” Justice Samuel Alito expressed similar sentiments, warning that judicial decisions should be narrow and focused on the facts of a particular case:

“[I]f judges begin to go further and announce and decide questions that aren’t before them or issue opinions or statements about questions that aren’t before them, from my personal experience, what happens when you do that is that you magnify the chances of getting something wrong. . . . [I]t makes for a better decision if you just focus on the matter that is at hand and what you have to decide and not speak more broadly.

Whatever Justices Roberts and Alito believed during their confirmation hearings, however, it rapidly became clear that they have little interest in restraining themselves. In their first full term together, both justices joined an opinion overruling a very recent abortion precedent because “some women come to regret” their own choices when they are allowed to make them.They claimed that a plan to desegregate public schools violates Brown v. Board of Education. And they infamously cut back on women’s right to equal pay for equal work in theLedbetter decision that was later overturned by an Act of Congress.

In later terms, the Court’s conservatives pushed to immunize corporations from state consumer protection law.They expanded corporations’ ability to force consumers to sign away their ability to enforce their rights in a court of law. And they massively expanded wealthy interest groups’ power to use their substantial fortunes to influence elections. They are widely expected to end, or at least dramatically roll back, affirmative action in public university admissions this coming term. And in Citizens United v. Federal Election Commission, the conservative justices reached far beyond the question presented to them in order to sweep away decades of law prohibiting corporate efforts to influence elections. So much for “focus[ing] on the matter that is at hand” and “not speak[ing] more broadly.”

None of this is to say, of course, that the Roberts Court can always be counted on to intervene in politically charged cases. To the contrary, on issues such as voting rights, where the Supreme Court has historically stood as one of democracy’s most important guardians, the Court’s conservatives have largely abdicated this essential role.

Moreover, as audacious as the conservative justices have been, their activism pales in comparison to Republican elected officials’ judicial wish list. The legal case against the Affordable Care Act has, in the words of a top conservative judge who was awarded the Presidential Medal of Freedom by former President George W. Bush, no basis “in either the text of the U.S. Constitution or Supreme Court precedent.” Now, however, belief in the law’s unconstitutionality is akin to gospel among Republican partisans (including four of the five conservatives on the Supreme Court). And for many Republicans, this constitutionally challenged assault on health reform is only the first item on a much longer list. As a Center for American Progress report documented last year, numerous top Republican lawmakers-governors, senators, and other members of Congress-are on record claiming that everything from Social Security to federal child labor laws to Medicare to the national ban on whites-only lunch counters is unconstitutional.

So while conservative judges use their dominance on the federal judiciary to implement many of the GOP’s deregulatory goals and slant the electoral playing field in a way that helps elect more Republicans, GOP elected officials are pushing these judges to become even more aggressive. If former Massachusetts Gov. Mitt Romney wins the presidential election in November, this Republican dominance will only be solidified. Moreover, as four of the Supreme Court’s current members are over the age of 70, Gov. Romney will likely be able to shift the Court even further to the right. If President Barack Obama should win a second term, by contrast, he could replace Justices Antonin Scalia, Anthony Kennedy, or another member of the Court’s conservative bloc, potentially giving the Court a progressive majority for the first time since the early days of the Nixon administration.

This report will explain several of the narrowly decided cases which have reshaped worker and consumer rights and changed the face of our democracy, as well as some narrow misses where the conservative bloc failed to gain a majority to achieve a Republican-favored outcome. Additionally, this report explores the future legal landscape, which will likely turn on the outcome of the upcoming presidential election. If President Obama prevails in November, many of the justices’ incursions on consumers, workers, and voters would likely be reversed in a matter of just a few years if the president has the opportunity to replace one of the Court’s five conservatives. Should Gov. Romney prevail, by contrast, his appointments could affect a massive transfer of power from the two branches-executive and legislative-the American people elect to the one branch-judicial-that would likely be controlled by Republican-nominated conservative judges for a generation or more.

Ian Millhiser is a Senior Policy Analyst, Constitutional Policy, at the Center for American Progress Action Fund and is the Editor of the Center for American Progress Action Fund’s ThinkProgress Justice.

Florida GOP Launches Revenge Campaign Against Justices Who Ruled Against Gov. Rick Scott

By Ian Millhiser on Sep 24, 2012 at 9:00 am

Florida Governor Rick Scott (R-FL)

On Friday, ThinkProgress reported that a Pennsylvania Tea Party group vowed revenge against two state supreme court justices who joined a recent decision that unanimously rejected a lower court order upholding a voter suppression law. Now, the Florida GOP wants to play this game as well:

The party announced late Friday that its board voted unanimously this week to oppose the retention of Supreme Court Justices Fred Lewis, Barbara Pariente and Peggy Quince, who were all appointed by Democratic former Gov. Lawton Chiles and who have ruled against several major priorities of Republican Gov. Rick Scott’s administration.

If the justices are not retained, Scott would appoint replacements.

“While the collective evidence of judicial activism amassed by these three individuals is extensive, there is one egregious example that all Florida voters should bear in mind when they go to the polls on election day,” said spokeswoman Kristen McDonald in a statement. “These three justices voted to set aside the death penalty for a man convicted of tying a woman to a tree with jumper cables and setting her on fire.”

The Florida GOP’s decision to base its PR campaign against these justices around a death penalty decision is rather ghoulish, but it is both familiar and unsurprising. Twenty-six years ago, California Republicans led a $5.6 million campaign to oust California Chief Justice Rose Birdand two of her colleagues. Although the campaign outwardly focused on the death penalty, its top supporters included the Independent Oil Producers Agency, the Western Growers Association, the late anti-tax activst Howard Jarvis and the Free Market Political Action Committee. Bird’s opponents knew they couldn’t run an effective campaign by attacking her for being insufficiently friendly to wealthy corporations and other interest groups, so they chose instead to hide their true motives by focusing on the death penalty.

In 1996, Tennessee conservatives ran a similar playbook, ousting Justice Penny White because she voted to overturn a single death sentence. Significantly, only 19 percent of the state’s voters participated in the retention election, demonstrating the ability of a well-funded campaign to shape the outcome of a judicial race, since the campaign only needs to rally a small group of voters in these very low profile elections.

It now appears that the Florida Republican Party is operating off the same playbook. Like the California corporate and anti-tax groups that helped turn out Rose Bird, however, it is likely that the Florida Republicans are far more concerned with giving control of the state supreme court to Rick Scott than they are with eight year old death penalty cases.

Voting Wrongs - Elizabeth Drew

Voting Wrongs

Elizabeth Drew

Comments at 

http://www.nybooks.com/blogs/nyrblog/2012/sep/21/voting-wrongs/

Jamie-Andrea Yanak/AP

Voters make their choices at voting booths set up on the stage of the auditorium at East High School, in Cleveland, Tuesday, Nov. 2, 2004.

The Republicans’ plan is that if they can’t buy the 2012 election they will steal it.

The plan, long in the making and now well into its execution, is to raise great gobs of money—in newly limitless amounts—so that they and their allies could outspend the president’s forces; and they would also place obstacles in the way of large swaths of citizens who traditionally support the Democrats and want to exercise their right to vote. The plan would disproportionately affect blacks, who were guaranteed the right to vote in 1870 by the Fifteenth Amendment; but then that right was negated by southern state legislatures; and after people marched, were beaten, and died in the civil rights movement, Congress passed the Voting Rights Act of 1965. Now various state legislatures are coming up with new ways to try once again to nullify that right.

In a close election, the Republican plan could call into question the legitimacy of the next president. An election conducted on this basis could lead to turbulence on election day and possibly an extended period of lawsuits contesting the outcome in various states. Bush v. Gore would seem to have been a pleasant summer afternoon. The fact that their party’s nominee is currently stumbling about, his candidacy widely deemed to be in crisis mode, hasn’t lessened their determination to prevent as many Democratic supporters as they can from voting in November.

This national effort to tilt the 2012 election is being carried out on the pretext that the country’s voting system is under threat from widespread “voter fraud.” the fact that no significant fraud has been found doesn’t deter the people pursuing this plan. Myths are convenient in politics. Want to fix an election? No problem. Just make up a story that the other side is trying to rig the election—and meanwhile try to rig the election. (Jon Stewart recently concluded a searing segment about the imagined voter fraud by saying: “Next, leashes for leprechauns.”)

The Republicans have been making particularly strenuous efforts to tilt the outcomes—in most of the “swing states”: Florida, Ohio, Iowa, New Hampshire, and Wisconsin. The Republican leader of the House in Pennsylvania, previously considered a swing state, was careless enough to admit publicly that the state’s strict new Voter ID law would assure a Romney victory in November. In fact a state document submitted in court offered no evidence of voter fraud. On September 18, Pennsylvania’s supreme court sharply rebuked a lower court’s approval of the law, questioning whether the law could be fairly applied by the time of the election. This battle continues despite the fact that the Romney campaign in mid-September suspended its efforts in Pennsylvania because polls show that Obama was substantially ahead. Even if the state’s electoral votes are not in question the outcome could still decide whether a great many people will be allowed to vote in November, and could also affect the popular vote.

Eight states have already passed Voter ID laws—requiring a state-approved document with a photograph in order to register or vote, a form of identification that an estimated 11 percent or over 21 million of American citizens do not possess. But these laws are just part of an array of restrictions adopted to keep Democrats from voting. Some use other means to make registration difficult, or put strict limits on the number of days before the election that votes can be cast , or cut back the hours that polling places can stay open.

In the aftermath of the 2004 election, which was characterized in Ohio by lines at voting places in black districts so long as to discourage voters, Ohio Democratic officials made voting times more flexible; after the Republicans took over the state they set out to reverse that.

Iowa, Florida, and Colorado tried to purge the voting rolls of suspected unqualified voters, but their lists turned out to be wildly inaccurate. Florida officials compiled a list of 180,000 people whose qualifications were questioned, but after voting registrars checked (some protesting the unfairness of the purge) only 207, or .0002 percent of the state’s registered voters, were found to be unqualified to vote. Nearly sixty percent of the 180,000 names had Hispanic surnames, another 14 percent were blacks. Officials said that whites or republicans were unlikely to be on the list.

While a combination of outraged citizens and legal challenges led all three states to ostensibly give up on the idea of purging voters, Florida and Iowa officials have said that they intend to pursue those who haven’t been proven innocent. As a result, hundreds of thousands of citizens don’t know if they’ll be allowed to vote—which, like a number of the restrictions, could be a disincentive to even subjecting oneself to what could be a hassle or humiliation at the polling place. Florida also enacted a voter ID law, which was struck down by a federal court. Ever on the lookout for ways to keep Democratic supporters from the polling places, the state cut short the number of days for early voting, and established rules that in effect barred outside groups such as the League of Women Voters from conducting registration drives. Though this restriction was later overturned by a federal court, voter registration groups said that important time had been lost while they contested the new restrictions on their activities.

In Ohio—the swingyest of the swing states, now in Republican control—secretary of state Jon Husted is trying to block voting on any weekend before the election; and he has appealed the ruling of a federal district judge ordering him to allow voting even during the last weekend before the election. Husted also made the extraordinary proposal that voting hours in Ohio be extended solely in white districts, but this preposterous idea couldn’t withstand a citizen outcry. Two Democratic county election officials from the Dayton area (one the few predominantly Democratic counties in the state) who objected to Husted’s proposal to permit no weekend voting were fired.

Where did all this come from?

Florida 2000 was the poisoned apple of our electoral system. Republicans saw that by manipulating the rules they could –when it comes down to it—steal an election. Ample evidence exists that a majority of Floridians intended to, did, or thought they did, vote for Al Gore. Following the success of the George W. Bush team in winning Florida and thus the election came Karl Rove’s zealous use of alleged “voter fraud” as an instrument for expanding the power of the party and the Bush White House. At the behest of the Bush White House in 2007, the Justice Department fired seven US Attorneys on the ground that they hadn’t pursued voter fraud, which the attorneys said they could find no evidence of. (Rove had other motives.) The next step would be gaining control of as many state governments as possible: The Republicans took over twelve in 2010, to reach a total of twenty-two. Through them, the Republicans launched a national drive to intimidate and hinder the Democratic party’s constituencies from voting—in the name of protecting the political system against a cooked-up threat.

Conveniently, the five conservative Justices of the Supreme Court, in an unusual bout of the “activism” they usually deplore, overturned in Citizens United over more than a century of law protecting the political process from uncontrolled contributions by corporate interests as well as labor (which cant compete on raising such funds). Corporations that would prefer more relaxed regulatory policies and lower corporate taxes have combined with the Republicans and others who want to get rid of Obama in making huge contributions to the new Super PACs. And Sheldon Adelson, under legal challenge for his management of his casinos in Macao, and willing to shell out $100 million to get a friendlier Justice Department, became one of the most powerful people in America. Candidates, including the newly chosen Republican vice presidential contender, paid court to Adelson in his Las Vegas headquarters.

The highly conservative American Legislative Exchange Council (ALEC), financed by the Koch brothers and big corporations drew up a “model law” to guide Republican-controlled states in designing ways to keep Democratic supporters from voting. Other conservative groups—some originating in the Tea Party, which is also supported by the Koch brothers—have also sprung up to join the fight to restrict voting by allies of the Democrats. The group True the Vote, for example, is operating on a theory of pure fantasy: its literature imagines busloads of unqualified You-Name-The-Democratic-Group being dropped off at registration places. True the Vote officers say that they will go to polling places to make sure that unqualified people are not permitted to vote. The country may now be entering into a period marked by confusion or even chaos in our election system. Hundreds of thousands of people are about to start to go to the polls before their states have settled their voting requirements, or without knowing what they are. Though the rules have yet to be decided in either state, voting has already begun in North Carolina, and is scheduled to begin in Ohio on October 2. Either candidate needs to win by decisive margins in both the popular and electoral college vote to avoid a legal mess.

The challengers to a democratic system think long-term, something which the Republicans are better at than the Democrats. Some of these laws cannot be finally enacted or survive court challenges in time for the 2012 election, but voting rights advocates are even more alarmed about 2016. According to census data, whites will become a minority in the coming year, a shift that is likely to spur even more attempts to restrict voting participation by blacks and Hispanics. Many also fear that the Roberts court will strike down a special provision in the 1965 Voting Rights Act – Section 5 –which requires nine states, all in the South, and parts of an additional seven states, to submit any proposed changes in their voting laws to Justice Department for prior clearance. States covered by Section 5 have long complained that they are being discriminated against and the Supreme Court is expected to take up challenges to the provision’s constitutionality in its next term.

Having covered Watergate and the impeachment of Richard Nixon, and more recently written a biography of Nixon, I believe that the wrongdoing we are seeing in this election is more menacing even than what went on then. Watergate was a struggle over the Constitutional powers and accountability of a president, and, alarmingly, the president and his aides attempted to interfere with the nominating process of the opposition party. But the current voting rights issue is even more serious: it’s a coordinated attempt by a political party to fix the result of a presidential election by restricting the opportunities of members of the opposition party’s constituency—most notably blacks—to exercise a Constitutional right.

This is the worst thing that has happened to our democratic election system since the late nineteenth century, when legislatures in southern states systematically negated the voting rights blacks had won in the Fifteenth Amendment to the Constitution.

September 21, 2012, 2:38 p.m.

10 Republicans Who Have Spoken Out Against Mitt Romney’s Remarks On The 47%

By Annie-Rose Strasser on Sep 19, 2012 at 1:21 pm

Mitt Romney is facing huge backlash from the leaked video that captured him saying 47 percent of people in the United States believe they are “victims” and that they will never vote for him. Republicans, particularly those in tight elections this year, and conservative pundits are criticizing Romney for the comments, disassociating themselves from his message. Here are 10 Republicans who have disavowed Romney in the last few days:

1. Susana Martinez (R-NM)

The governor of New Mexico knows her state won’t be won through a hard-right campaign strategy, which is likely why she’s disavowing Romney’s write-off of 47 percent of the county. Martinez said of Romney’s comments that “New Mexico has many people who are living at the poverty level and their votes count just as much as anyone else.” Where her policy is concerned, though, Martinez isn’t quite as compassionate to the working poor or those who need government assistance. She has cut food stamps, and insinuated Democrats believe welfare is a “way of life.”

2. Scott Brown (R-MA)

Brown’s campaign for re-election with Elizabeth Warren has been one of the most closely-watched, and hotly contested, in the country. Losing any voters over the comments of his party’s standard-bearer might cost him the race. So Brown ditched Romney in a statement Tuesday, saying, “That’s not the way I view the world.”

3. Linda McMahon (R-CT)

Like Romney, McMahon is extremely wealthy and has been accused of being out-of-touch. In her largely Democratic state of Connecticut, that narrative won’t get her elected, so she’s decided to chastize Romney for his 47 percent comments, saying, simply, “I disagree with Governor Romney’s insinuation that 47% of Americans believe they are victims who must depend on the government for their care.” McMahon might say she disagrees, but she’s previously said that “Forty-seven percent of the people today don’t pay any taxes.”

4. Dean Heller (R-NV)

Senator Heller told POLITICO that doesn’t “view the world the same way” as Mitt Romney when it comes to the 47 percent dividing line. “Every vote in Nevada counts,” he said. “Every vote. And as a United States senator, my job is represent every one of those votes, whether they voted for me or against me.”

5. Ovide Lamontagne (R-NH)

Lamontagne, the gubernatorial candidate from New Hampshire, said in response to Romney’s comments, “There’s no 47 percent in New Hampshire as far as I’m concerned.”

6. Mark Meadows (R-NC)

In a statement similar to Lamontagne’s, the North Carolina Congressional candidate Mark Meadows said, “I’m concerned about all 750,000 people… I am here to represent the people of this district,” jokingly adding, “It might come as a surprise, but Mitt Romney didn’t call me before he made those comments and ask for my advice.”

7. Bill Kristol

Kristol’s column about the leaked Romney video were perhaps the most damning. He titled his piece, “A Note on Romney’s Arrogant and Stupid Remarks” and went on to say that Mitt Romney “seems to have contempt not just for the Democrats who oppose him, but for tens of millions who intend to vote for him.”

8. Peggy Noonan

Noonan spoke out in a blog post that offered a harsh indictment of the Romney campaign telling them to “snap out of it.” “It’s time to admit the Romney campaign is an incompetent one,” she writes, “It’s not big, it’s not brave, it’s not thoughtfully tackling great issues. It’s always been too small for the moment.”

9. David Brooks

Brooks said that Romney’s comments “[suggest] that he really doesn’t know much about the country he inhabits… doesn’t know much about the culture of America,” “doesn’t know much about the political culture,” “knows nothing about ambition and motivation,” and that his interpretation of how the country works “is a country-club fantasy.”

10. Mark McKinnon

McKinnon, who worked for both former Pres. George Bush and presidential candidate John McCain, expressed his disappointment with Romney in an article for The Daily BeastWednesday, writing “Well, the release of the Romney tape was a moment that certainly revealed something about him. But not what I was hoping for…. How can anyone support a candidate with this kind of a vision of the country? Isn’t a divided America under Obama what folks on the right rail against?”

Romney Apologizes To Nation's 150 Million 'Starving, Filthy Beggars'

Romney Apologizes To Nation's 150 Million 'Starving, Filthy Beggars'

SEPTEMBER 18, 2012 | ISSUE 48•38 | MORE NEWS

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SALT LAKE CITY—Seeking to limit the fallout from a videotaped speech in which he asserts 47 percent of Americans “pay no taxes” and do not take “personal responsibility and care for their lives,” Mitt Romney hastily called a press conference today to apologize personally to the “150 million starving, filthy beggars [he] might have offended.”

Saying that he deeply regretted his choice of words at a private $50,000-a-plate fundraising function in May—during which he argued “[his] job is not to worry” about the lower-earning half of the nation’s populace—Romney personally appealed to the country’s “dirt-caked garbage pickers and toothless street urchins” for forgiveness.

“First and foremost, I would like to offer a heartfelt apology to all the whores, junkies, bums, and grime-covered derelicts out there who make up nearly half our nation,” a visibly contrite and solemn Romney said outside a campaign stop at a local high school. “Let me assure you that I in no way meant to offend any of the putrid-smelling, barefoot masses out there. My campaign is not about dividing this nation, but about bringing all sides together—the rich, elegant members of the upper class, as well as the 47 percent who are covered in flies and eat directly from back-alley dumpsters.”

“I am fully committed to building a better future for every American,” Romney continued, “and that means ensuring all 150 million grease-and-urine-soaked members of our society get a fair shake.”

The Romney campaign reportedly scrambled into damage-control mode after the video leaked Monday, issuing a statement late last night stating that the intended target of Romney’s remarks was ingrained big-government largesse, not the “hordes of uneducated, loathsome scum who unfortunately populate this country.”

However, with Romney’s comments continuing to dominate the news cycle today, the campaign opted to convene a press event to allow Romney to speak directly to the nation’s “grimy panhandlers and coke-addled whores” so that he could issue an apology and explain his familiarity with their struggles.

• NEWS

  Romney Campaign Sends In Champion Of The Poor Paul Ryan For Damage Control

“I know just how hard it must be to get through a miserable, destitute life that is rife with crying babies whose shrieks consistently disrupt the affluent members of society who actually contribute something to this world,” said the GOP candidate, adding that he wanted to make amends for his recent statements and reach out to what he called the country’s “snaggle-toothed street people” and “hell-spawned savages.” “I know it can be challenging to wake each morning, covered in your own feces and refuse, and get back out there on the streets to beg for spare change and food scraps, always one step from dying right there in an alley.”

“I know your challenges, and I am ready to fight for you,” he added

Romney also said he recognized that the hardships of the nation’s low-earners are made more difficult by the fact that so “very, very many of them are drug-addicted, high-school-dropout single mothers and fathers who sleep in gutters while sewer rats nibble at their necrotic flesh.”

In an effort to right his campaign and rebuild his image, Romney promised to bring his message of compassion and economic opportunity to the “ramshackle, mud-floored huts” in which half of all U.S. residents live.

“Let me make this absolutely clear: I have the utmost respect for all of the filth-encrusted, lesion-covered degenerates of this nation,” Romney said. “In the coming weeks, I look forward to meeting real Americans in their squalid, roach-infested hellholes in every corner of this country. I promise to stand up for every one of you, even the 47 percent of you huddled together for warmth, fighting your own family members for moldy crusts of bread as you wallow in your own excrement.”

Added Romney, “And I look forward to serving you as your next president.”

Occupy Wall Street - Passé Or Canary In A Coal Mine?

Occupy Wall Street - Passé Or Canary In A Coal Mine?

By JOSEPH LAZZARO: Subscribe to Joseph's RSS feed
September 16, 2012 11:32 AM EDT

The Occupy Wall Street protest movement is expected to resume Monday, on the 1-year anniversary of the protests. Is the coalition passé and irrelevant? Or is it a canary in a coalmine – a barometer of worsening economic and social problems in the United States?

********
Readers of this space know that there's little that commentator Glenn Beck says that yours truly agrees with. His correlations range from the implausible, to the stuff of fantasy, to some certifiably loopy insinuations.

But Beck, who recently returned to traditional cable TV, was correct regarding one observation: The United States could be headed for a major period of social unrest -- or worse -- but not for the reasons he stated.

Beck blamed the federal government. Or President Barack Obama. Or House Minority Leader Nancy Pelosi, D-Calif. Or the Democrats. Or liberals. Or unions. Or George Soros. Or Woodrow Wilson. Or the builders of Rockefeller Center. Or all of the aforementioned, plus the public sector, for triggering economic sluggishness and preventing the free market from doing what it is capable of doing.


Well, friends, the reality is: the free market has been doing what it's capable of doing, and it will continue to do what it's capable of doing, and the result, at least for a while, is going to be more structural changes to the U.S. economy, and more dislocation. Dislocation is a fancy policy wonk word for "job losses."

Globalization -- basically, free markets, international trade and the transfer of jobs to lower labor cost production centers -- is a system that has made the bulk of U.S-based multinational corporations massively profitable and successful. U.S. corporations are sitting on $2 trillion in cash, alone! The downside to globalization (so far)? It  has also led to four of five problems that, if not addressed, could undermine the U.S. economic system itself.

Below is a summary of each condition, from least to most capable of triggering a collapse of the U.S. economic system:

5) Poverty and an increase in no-stake citizens. Poverty, a large and generations-long underclass, massive income disparity between the Caucasian and non-white population groups, inadequate job training and a very limited social welfare state have created a social condition in which roughly 40 percent of the electorate currently has no stake in the U.S. economic system -- corporate capitalism.

For these citizens, the work environment is a place that exploits them and abuses them -- treats them as mere production beings, even as it undervalues their labor; and society is a place that marginalizes them. They have been alienated by corporate capitalism. For them, corporate capitalism is not a blessing, it's the problem. As such, they would have no qualms with seeing the downfall of corporate capitalism -- and its supporting institutions -- and its replacement by an economic system that treats them with dignity, that pays them a living wage and whose means of production serve the societal interest, not the interests of the uber-rich and upper-income groups. For many in this group, that economic system is democratic socialism.

Furthermore, if the enormous social problems listed above worsen and an educated, organized interest group coalition marshals these citizens into an effective, potent political force, they could put unprecedented pressure on U.S. institutions, including massive social unrest. A period of social chaos (or worse) could ensue, bringing the U.S. economy to a virtual standstill, including disruption of the energy supply and food delivery.

Does the Occupy Wall Street movement represent that coalition that both organizes these no-stake citizens, whom I call "The Others," and that places pressure on U.S. institutions? Occupy Wall Street is expected to resume their consciousness raising and related tactics, with demonstrations in New York on Monday, Sept. 17, the one-year anniversary of the start of the Occupy protests.

Further, long before any other economists did, in 2011, New York University economics professor Nouriel "Dr. Doom" Roubini, who accurately predicted the bursting of the housing bubble and financial crisis five years ago, said that unless public officials invest in a new, smarter social safety net to restore a balance between the free market and public goods, the social unrest seen in the Arab world and Greece, and in the United Kingdom, will hit other advanced economies and emerging markets.

4) Aging population. The Baby Boom generation, born 1946 to 1964, the largest demographic group in the United States, is starting to retire, and historically, as adults age, they buy fewer consumer goods and use health care services more. This will have a double-dose contraction impact on the U.S. economy. Consumer spending, which accounts for about 60 percent of U.S. GDP, will struggle to grow, weighing on GDP growth. At the same time, entitlement spending -- especially for Medicare -- will take up a larger portion of federal spending, diverting resources that could be used for other public goods and needs: child education, infrastructure rebuilding/development, and research and technology. The net result would be a U.S. economy that both grows too slowly to provide enough jobs and one that doesn't have enough federal revenue to meet social safety net needs.

Further, faced with a "smaller pie," pressures could build to "divvy up the pie better," including efforts aimed at: 1) achieving federal ownership of natural resources (oil, natural gas, electric); 2) creating a revenue-sharing arrangement between multinational corporations and society; and 3) achieving democratic, public stewardship of the economy -- an economy whose major decisions are determined by the people, democratically, not by corporate boards of directors.

The U.S. health care reform act (ACA) will contain and eventually lower per-retiree Medicare costs -- but only if the ACA is not repealed. House Republicans and their presidential nominee are determined to try to repeal health care reform -- something that would be a disaster regarding the goal of containing health care costs, including Medicare. Doing so will result in health care spending rising to truly ridiculous levels. Conversely, if health care reform is retained, this key cost component of the aging populace will be contained.

3) Outsourcing. Globalization has substantially increased outsourcing. If emerging markets, and in particular, China and India, continue to trigger the transfer of jobs out of higher labor-cost production centers such as the United States, the U.S. could see unacceptably high levels of unemployment linger for even longer than current projections of 7.7 percent to 7.0 percent unemployment through at least the end of 2014, according to U.S. Federal Reserve research. Also, if outsourcing continues at its current pace, job growth could remain inadequate.

2) Frugal consumers. With wages and median incomes stagnant in many job segments, Americans have adopted a new stance (for them): dramatically cutting discretionary and needless spending and increasing saving. The trend is so cross-cutting that it's led to a downsizing in the retail and restaurant sectors. To gauge the extent of the frugal consumer trend, visit a local shopping plaza and/or indoor shopping mall. Note the store vacancies.

To be sure, a savings rate at or near 5 to 7 percent per year is a good thing for a nation in terms of capital formation. The problem is, if it rises above that level and too many people save too much for decades, it will act as a brake on GDP growth. Moreover, so far during the financial crisis era, it looks like the frugal consumer trend is a long-term decision by Americans to consume less.

Another frugal consumer trend downside is that the U.S. economy is predicated on consumers spending a lot: Such a pronounced, long-term frugality trend would, again, weigh on job growth, increasing social support costs, and resultant social/economic problems.

1) Wage stagnation / unemployment. Of all the factors, or threats to the corporate capitalism  -- the U.S.'s economic system -- this is the greatest.

Simply, the whole point of the U.S. economic system is: 1) profits and 2) jobs. It's the reason Americans tolerate its harshness -- the reason Americans work so hard, don't have a national law guaranteeing six weeks of paid vacation like their brothers and sisters in France, the reason Americans don't have an adequate public pension system like Germany, or other social supports for health care and education found in social-welfare-system-adequate Western Europe.

However, if you take either profits or jobs away, the U.S. economic system, corporate capitalism, experiences stress. Take them both away, and a systemic crisis occurs.

No one knows how the American system of corporate capitalism will respond this time to a crisis -- an era of unprecedented wealth, material abundance, opulence, conspicuous consumption and technological advance, amid enormous income inequality, poverty and dislocation -- if the U.S. economy does create enough jobs to ensure that every able-bodied adult has a good job and the ability to achieve his or her potential.

At the signpost up ahead...

Poverty. An increase in no-stake citizens. An aging population. Outsourcing. Frugal consumers. Wage stagnation. Unemployment. Each, to varying degrees, poses a threat to the U.S. economic system.

The good news is ... one solution can address all of these problems/threats: massive job growth -- which is why public officials and corporate CEOs need to find ways -- both public and private -- to create many more jobs, and soon.

--

Must Read: In the United States, Who Are 'The Others'?

http://www.ibtimes.com/articles/384820/20120916/occupy-wall-street-unemployment-workers-jobs-median.htm?utm_source=buffer&buffer_share=bab1e&page=all

Fast Food Obamacare surcharges

http://www.ibtimes.com/articles/379631/20120831/obamacare-affordable-care-act-franchise-small-business.htm?page=all


Fast Food At Papa John's, McDonald's, KFC And Others May Soon Come With An Obamacare Surcharge
One franchisee considering higher health care costs: ‘We’ll have to just file for bankruptcy.'

By MORAN ZHANG: Subscribe to Moran's RSS feed
August 31, 2012 4:18 PM EDT
David Barr, who owns 23 KFC and Taco Bell outlets in Alabama and Georgia, started with two KFCs in 1998 and expanded the number of outlets in his franchise portfolio every single year until details of the proposed federal health care insurance plan began to emerge early after President Obama's inauguration. Since then, Barr hasn't added any restaurants.


"I have zero desire to expand until the uncertainty goes away," Barr said, adding that he's even thinking about downsizing.

Signed into law in 2010 and recently upheld by the Supreme Court, the Patient Protection and Affordable Care Act, or ACA, requires that employers with 50 or more full-time or "full-time equivalent" employees provide health insurance to full-time employees by 2014 or pay a penalty. For each block of 30 weekly hours of part-time work by one or more employees, a business is deemed to have one full-time-equivalent employee.

Currently, Barr provides health insurance for only 30 managers or office personnel. But under the ACA's rules, starting in 2014, he will have to extend insurance coverage to an additional 134 full-time employees among his 424 workers. "By any definition, the law applies to us." Barr said. "If we fully implement the law, we'll have to just file for bankruptcy."


As Barr figures it, with health care coverage running about $5,000 per year, he would have to lay out about a half-million dollars annually to cover his employees, even if he sets their share of the premium at the maximum allowed for their wage scales under the new law.

"This business, believe it or not, does not cash flow more than half a million dollars a year," Barr argued. "After I pay all my expenses, pay debt service, pay required upgrades and other capital expenditures required to run the business, we don't have half a million dollars a year. And I really believe that's the case for many low-wage service industries."

'A Lose-Lose Situation'

If Barr is correct, the Affordable Care Act could stifle the growth of franchise businesses at a time when many argue they are critical to economic revival in the U.S.

The franchise industry is responsible for nearly 18 million jobs in the U.S., one out of every eight private-sector positions, according to Matthew Haller, vice president of public affairs for the International Franchise Association, or IFA. Many of these jobs are targeted for entry-level, low-skilled workers, a group with some of the highest unemployment rates.

Adults without high school diplomas faced an unemployment rate of 9.1 percent in July, almost twice as high as college graduates and well above the national average of 8.3 percent, according to the Labor Department. The unemployment rate for teens, another low-skill group, was 25.6 percent.

As many as 38 percent of employers -- not all of them franchises, but quite a few -- would be at risk of violating the coverage provision in the ACA, according to a study by Mercer, a human resources consulting firm.

In a recent study, the Hudson Institute, a conservative think tank, found that many franchise businesses would be motivated to reduce the number of locations and move workers from full-time to part-time status when the employer mandate phases in, in an effort to stay below the 50 full-time employee mark. The study estimated that more than 3.2 million jobs at franchise businesses would be affected.

With higher paying jobs, employers can offer the required benefits and pay for them by adjusting wages downward. But low-wage jobs in many sectors, such as restaurant and retail businesses, leave little room for such trims. (Restaurants represent 50 percent of franchise employment.)

"You are starting to see how much of a job killer this piece of legislation is," the IFA's Haller said.

"It's bad for franchisees, and it's bad for consumers, because employers are left with a clear choice: either to eliminate jobs or raise prices. It's a lose-lose situation."

Indeed, Papa John's Int'l, Inc. (Nasdaq: PZZA) said that the health care reform will cost the company an additional 11 cents to 14 cents per pizza, which the company vowed that its many franchisees would have to ultimately ask consumers to pay for.

"We're not supportive of Obamacare like most businesses in our industry," Papa John's CEO John Schnatter said in a call to analysts. "But our business model and unit economics are about as ideal as you can get for a food company to absorb Obamacare. We will find tactics to shallow out any Obamacare costs and core strategies to pass that cost onto consumers in order to protect our shareholders' best interests."

Papa John's is hardly alone in expressing these concerns about ACA. McDonald's Corporation's (NYSE: MCD) Chief Financial Officer Peter Bensen told analysts recently that the law will add between $10,000 and $30,000 in annual costs to each of the 14,000 McDonald's restaurants in the U.S., 89 percent of which are franchisee-owned.

"Many of our franchisees will struggle with how to reconcile the financial implications ... and will likely take other measures to reduce costs," Steven Wiborg, Burger King Worldwide Inc.'s (NYSE: BKW) North American president, said.

Local Rivals Will Gain An Advantage

In the U.S., more than half of all franchise outlets are operated by franchisees that own multiple locations. They argue that they will be especially penalized by the new healthcare law and be placed at a disadvantage relative to local, nonfranchise competitors.

If a multi-unit franchisee owns four establishments with 15 full-time employees in each one, under the ACA, this store owner will be treated as a single firm with 60 full-time employees. However, if these four outlets were owned and operated separately, they would be exempt from providing health care benefits, because they would have too few workers.

In fact, if they chose to offer health insurance, they would in many cases be entitled to a tax credit. Under the ACA, if an employer has fewer than 25 employees and they earn less than $50,000 on average, a tax credit is available to defray 35 percent of the cost of providing health insurance to the workers.

While raising prices to cover health care costs is certainly an option that some franchise companies will take, in the current operating environment, it's not a very palatable one.

Standard & Poor's Capital IQ analysts said in a June 7 note that "very little pricing power exists" among restaurant owners and hiking the cost of meals will only reduce the number of customers served.

To keep up with the rising cost of commodities, most restaurant companies already raised their prices between 1 percent and 4 percent in 2011. While this is in line with core inflation, it is below the rate of food inflation, which is estimated to be running about 2 percent to 5 percent, according to Capital IQ.

And commodities prices are still going up. Market Vision, a restaurant commodities consulting firm, said the price of wheat in 2012 is expected to rise 26.32 percent, corn 19.69 percent, dry whey 16.43 percent, choice grade beef 8.08 percent, broiler chickens 5.06 percent and soybeans 3.54 percent.

"The importance of price as a competitive factor is greater than at any time in the recent past, and we see no end to the trend," Capital IQ analysts said.

That's certainly the view of John Metz, who owns more than 40 Denny's and Dairy Queen stores in Florida, Georgia and Virginia. He said that when he raises prices, people just buy cheaper items. Instead of a steak, they ask for a burger or a sandwich.

"I've been in the restaurant business since the late 1970s, and I know if I raise my prices 10 percent across the board, my average check does not go up 10 percent," Metz said. "My average check might go up 2 percent to 3 percent, if I'm lucky."

Reduce Hours, Close Stores

When the employer mandates go into effect in two years, many franchisees will likely minimize the number of hours employees are working, turning full-time workers into part-time help without benefits. Indeed, KFC/Taco Bell franchisee Barr says that a majority of his 164 full-time employees will be placed into part-time positions.

"The unfortunate part is it doesn't help me, because I'm probably losing a good employee," Barr said. "And it doesn't help my employees, because they might end up taking two part-time jobs and they still won't have [employer-provided] insurance."

But that won't necessarily negate their ability to obtain medical insurance. Employees who are not offered coverage by their employers will still be able to buy insurance directly through health care exchanges, and people making less than about $43,000 per year could be eligible for tax credits to help pay for it.

Still, those who share Barr's perspective argue that the ACA will worsen the unemployment situation in the country. In July, 8.2 million people were working part-time because they couldn't find full-time jobs, according to data from the Labor Department. That's five percent of the labor force. But if the arrival of the employer mandate adds to this group significantly, overall unemployment rates are likely to rise as well.

It's Cheaper To Pay The Penalty

Some restaurant franchisees that offer limited health benefit plans say they will drop coverage and pay penalties rather than provide the more expensive insurance required under the law. Although the details of the law are complex, simply put, for employers above the 50-employee threshold, the annual penalty per employee who is not offered medical coverage could run between $2,000 and $3,000. However, some employees will be excluded from this requirement. Metz employs about 1,200 people at his restaurants and currently provides insurance to close to 150 of them. That means, in his case, for about 1,000 uninsured full-time workers, he has to decide whether to provide insurance at a cost of about $6,000 to $8,000 per year each or pay the much lower penalty.

"I kind of did the math, and obviously I'll pay the penalty for those uninsured employees of mine," Metz said.

A View From The Other Side

To some health care experts, the franchise industry's rationale for its blanket rejection of the ACA is ill-considered and erroneous.

For one thing, the notion that the new law will burden the franchise industry with additional costs that can't be managed is misleading, they say; it fails to take into account that as with any change in economic and regulatory conditions -- any new rule or commodity price spike, for example -- companies will simply adjust workers' compensation over time to offset any added expenses. After the wage adjustments occur, it is not inconceivable that some prices will shift a bit, too.

"Relative prices change all the time in our market economy, and businesses cope with them, as they will if there are any changes in relative prices in response to the Affordable Care Act," said Henry Aaron, an economist and a longtime health policy analyst at the Brookings Institution and the Institute of Medicine. "The idea that people are going to stop eating hamburgers, buying groceries, wearing jeans and consuming the rest of the many products that franchise chains sell is silly."

The deeper issue at hand is if health insurance coverage is something that virtually everyone should have (a proposition that Aaron thinks most people, if not all, accept) and if Americans don't want to replace the entire structure of employment-based U.S. health insurance with a single-payer plan such as Medicare for all, then it is necessary to extend employment-based coverage to as many employed people as possible.

Charge A 5% Health Care Tax On Every Bill

Although most people in the franchise sector are dreading the day that the ACA mandate arrives, they are doing so while offering up some gallows humor, often in some of the more interesting ways that they can make the public pay for the added health care costs on their books.

Metz has come up with two of the most intriguing options. One possibility, he says, is to put a health care surcharge of 5 percent on every bill. He notes that since the Supreme Court ruled mandated health care legal by calling it a tax, why can't he actually apply the tax for his benefit?

His other idea, though, is a bit more practical. Metz may tell his cost-sensitive customers to tip their servers less, putting more of their tab toward their meals. Since any increase in the price of the dinner is the result of providing health care insurance for workers, waiters and the like are getting a higher percentage of the bill in benefits. Hence, customers can rightfully tip servers more frugally without feeling guilty, Metz says.

"I'm not opposed to a nationalized health care policy," Metz said. "I just think that having the employer bear 100 percent of the cost of that is, for lack of a better word, 'nuts.'"