Wednesday, December 21, 2005

The TLC, George Bush, Lawyers and Loyalists

Here is my letter to Bruce Ackerman, Sterling Professor of Law and Political Science
at Yale Law School

Dear Prof. Ackerman:

I took your class at Columbia law in 1987 and read with great interest your piece this morning in Slate on the president’s secret domestic spy program [The Secrets They Keep]. I think your theme is universal as it put me in mind of my long-running litigation on behalf of NYC taxi driver against the NYC Taxi and Limousine Commission, albeit on a smaller, local scale

In my case, the TLC reacted to publicity by movie star Danny Glover, who claimed that cabbies sometimes him service because he is black. While the city has long had laws and TLC regulations concerning service refusals, which included a specific penalty scheme for violating those laws, the TLC blatantly disregarded it. The agency proceeded to suspend taxi driver licenses without hearings. It then sought to revoke licenses, despite the law stating that the penalty for a first violation was a fine. (Revocation is allowed—but for a third offense.)

Rather than act publicly, the TLC acted in dark of night, never announcing the new penalty scheme, never seeking to amend the governing statute or even its own rules. The TLC was aided in this respect by its chairwoman Diane McGrath-McKechnie, a political appointee, and her hand-picked general counsel Matthew Daus. At a deposition, Daus testified about his loyalty: “My duty of loyalty, in my view, is to my client, which is Diane McKechnie.” Thus the chairwoman served her bosses politics (Mayor Giuliani was about to run for Senate against Hillary Clinton) and the lawyer served the chairwoman. The law and the Constitution were not served at all.

Reading your piece this morning, it was very familiar indeed.

All the best,

Dan Ackman

For background on the case
For briefs and other case files

Saturday, November 12, 2005

Revisiting the Fulton Fish Market Shrimp King

As the Fulton Fish Market finally decamps for the Bronx, it's time to revisit by 2000 article from the Times on Donald Julich, aka the Shrimp King, now retired.

New Yorkers & Co.:
The Big Man in Shrimp

By DAN ACKMAN
07/02/00

YEARS ago, Donald Julich Sr. was eating lunch at Sweets, the famous South Street restaurant, now defunct, when a man came up behind him and said, "Excuse me, I understand you're the shrimp king of the Fulton Fish Market, and I'd like to shake your hand." The voice was familiar, and when Mr. Julich looked up, so was the face. Burt Lancaster was smiling at him.

"I'm happy to shake your hand," Mr. Julich recalls saying. "But as far as I'm concerned, you're the king. I'm just a peasant."

A king he may not be, but Donald Julich does have a throne, albeit a modest one, and a crown. The crown is Crown Fish Inc., his seafood business at the Fulton Fish Market. His throne is a bar stool on the sidewalk on South Street where for 52 years this square-shaped man with a hawkish face has presided over Crown Fish, buying shrimp and shellfish by day and negotiating with customers by night.

The Fulton Fish Market dates from 1869, when the first permanent building was erected on South Street. While fish that used to come in by boat is now trucked and flown in, the buying and selling continues as it has for decades. Fish is displayed in the open air on stands and in boxes that spill onto the sidewalk. Buyers and sellers meet face to face, without a fax machine or Internet connection in sight.

Mr. Julich, 70, the big man in shrimp, has witnessed as much of the market's history as any man alive. With the city considering plans to move the market to Hunts Point, in the Bronx, it is a history that may be coming to an end. Mr. Julich, though, is less concerned with history — "Don't put me down as an adviser to Abe Lincoln" — than with his part in what the city estimates is a billion-dollar industry.

His employees arrive about midnight to display the shrimp in sidewalk stalls. Mr. Julich shows up about 4 a.m., when the buyers start arriving.

On one recent morning, he faced off with a customer named John Kim, who owns a fish store in Queens. They spent a half hour haggling over a box of lobster tails. Mr. Kim wanted to pay $17.25 per pound. Mr. Julich held his ground at $17.50.

"Go on, get out of here," Mr. Julich said in an accent that betrayed his Newark roots. "Come back tomorrow and you'll pay $18 and feel lucky to get it." When Mr. Kim left, he said, "Don't worry, he'll be back." Sure enough, he was, an hour later. He paid $17.50 and groused when Mr. Julich told him he had just one box left to sell him.

Mr. Julich and Mr. Kim both finished with the deal, Mr. Julich's son, Donald Jr., marked the box with a black crayon and alerted a journeyman, as they are called, who grabbed the box with a cargo hook and hauled it to the parked trucks. In a concession to modernity, some of the journeymen use forklifts, which whiz by at a frightening pace.

By dawn, buyers are gone back to their stores and restaurants and Mr. Julich and his men are cleaning up and making calls to make sure that they have fish to sell the next morning.

Mr. Julich's father, Fred, once a restaurateur, started the family in this day-for-night existence in 1946. The son joined a year later after graduating from high school. In 1955, he took over the company, and the next year, his brother, Richard, joined him after a stint in the Navy. They worked as partners until Richard retired in 1992. When Donald sells his last shrimp, Crown Fish will go to his son and nephews, David and Richard, who joined in their late teens and who are now in their mid-30's. Dynasties of this sort are the norm on South Street, where businesses tend to stay in families for three and even four generations.

From the beginning, the Julichs specialized in shrimp, which has become "the No. 1 seafood item in the world today," Mr. Julich said. It is also, pound for pound, one of the most expensive, an important consideration in a business where sales space is at a premium.

OVER the years, Mr. Julich has expanded the line to include oysters, clams, scallops and lobster tails. Crown Fish has never dealt in fish, though, and the company name remains a mystery. "Why he called it Crown Fish, I'll never know," Mr. Julich says. Asked how much shrimp he sells in a week, Mr. Julich says, "Ask the I.R.S." Mr. Julich doesn't look rich. But then maybe people who work in the dead of night surrounded by the smell of fresh fish rarely do.

Buying and selling small marine crustaceans may seem a simple thing, but it is not without complexity. The 15 to 20 varieties of shrimp Mr. Julich sells come not just from the southern United States but from a dozen countries in Central and South America, along with other types of shellfish from as far away as Australia. In addition to knowing from where to buy at a given time of year, Mr. Julich has to anticipate what size shrimp his customers may want.

One of the major changes on South Street is the emergence of Asians like John Kim as a buying force. Depending on which owner is doing the estimating, Koreans and Chinese make up 60 to 80 percent of the buyers. One thing hasn't changed: the market remains a man's world. Almost no women work there. "Would you want your girl to work with these animals, these gorillas?" he says.

Mr. Julich and his fellow merchants complain that margins have shrunk in recent years. Since 90 percent of his sales are on credit, it's crucial that he know his buyers and keep after them for payments. For that reason, he says he has many acquaintances in the business but just a few friends.

"If they're a friend and you have a problem, it's harder to fix it," he says.

While the Fulton market looks a lot as it always has, Mr. Julich has seen it, like other central markets, decline in importance in the industry. He says that more buyers buy direct from sellers at the piers, sidestepping the market. Mr. Julich acknowledges the change and doesn't begrudge it when the buyer is making a substantial order. But he shows some anger at dealers who sell mostly to wholesalers like him but will sell a single box of shrimp or a single bag of clams direct to a restaurant. "I know why they do it, but in the end they're hurting their own business," he says.

While the market may not be the hub it once was, Mr. Julich agrees with his friend Dan, a fellow merchant, who says that it still sets the tone for the whole country.

Dan would not give his last name. People at the market are circumspect, knowing as they do that nearly every writer who visits focuses on its supposed domination by the Mafia. Mr. Julich says he has never had a problem with organized crime and adds, as do most people interviewed there, that allegations of mob rule are way overblown.

"I've been here 50 years and I've gotten to know pretty much everybody," he says. At other times, though, he cautions, "Be careful what you say because people could get annoyed."

The city has announced it is considering moving the fish market to Hunts Point. To Mr. Julich, the move would be a disaster. "You can't have the market behind a locked gate where you need a badge to get in and out," he said. "Buyers have to be able to walk around and look at what they want. This is an open market." He concedes that conditions at the market are primitive, but insists that they are sanitary.

There used to be a half-dozen stalls specializing in shrimp at the Fulton Fish Market, Mr. Julich says. Now there are just two. Does that mean he is now the king, as Burt Lancaster said? "Well, Lancaster's dead, so maybe that moves me up a notch. But I'm still a peasant."

Wednesday, November 02, 2005

One weekend can make you a millionaire-- seriously

Ninety minutes into a recent speech on his life and how he lives it, Robert Kiyosaki called a break. Except it wasn’t a break because Kiyosaki hates breaks. He asked his listeners to review with their neighbors what they had learned so far. Mitch, a big fan of Kiyosaki and Rich Dad books, said that for him, “The key for me is: Don’t say ‘can’t;’ say ‘can.’ I’ve heard it before, but I can’t hear it enough.” Which works because Kiyosaki can’t say it enough.

Kiyosaki is the fabulously successful author of Rich Dad, Poor Dad and a shopping bag full of sequels. His speech to Mitch and about 400 of his fellow members of the New York City Cashflow Club was a warm-up of sorts. Two days later, Kiyosaki would arrive at Manhattan’s Javits Center, where a crowd of nearly 50,000 would mass for the Learning Annex Real Estate Wealth Expo. There made headlines drawing a $1.5 million fee for a one-hour speech. But if Trump was the star of the show, Kiyosaki was the lollapalooza’s workhorse, appearing three times over the course of the weekend, the last time to introduce the Donald.

Kiyosaki has transcended real estate guru status. He has become an all-purpose dispenser of wisdom. In a nutshell that wisdom is: The rich are different because they think different. Folks like his “poor dad,” a school administrator, may work hard and earn a good salary, but are perennially broke. His “rich dad,” actually the father of a friend, was unschooled, but amassed enough real estate to become one of the richest men in Hawaii. Poor folks say, “I can’t afford it.” The rich decide what they want, tie it up, and then figure out how to pay for it.

This is the lesson he taught the members of the Cashflow Club—a group devoted to Kiyosaki’s Cashflow 101 board game, which he says will transform your mindset in just a few sessions. He preached the same sermon to a crowd of 5,000 at the Real Estate Wealth Expo, many of whom were hard core Kiyosaki fans as well They’d heard it before, but they loved hearing it again.

Entering the Real Estate Wealth Expo was like walking into the vortex of the real estate bubble and visiting the seeds of the bust at the same time. With Trump drawing the masses, Learning Annex CEO Bill Zanker fielded an undercard that included legendary success coach Tony Robbins, hypnotist and “master of persuasion” Marshall Sylver, and all manner of real estate expert. The experts covered diverse specialties, everything from buying real estate cheap at probate, to buying at real estate cheap at auctions, to buying real estate cheap and flipping it quick. Then there were generalists like Robert Shemin, whose seminar was entitled simply and directly, “How to Be a Millionaire Real Estate Investor,” though in fairness pretty much every speaker was teaching that one.

Downstairs was an overflow room, where the big stars appeared on big screens, and smaller rooms for lesser lights. These were flanked by nearly a hundred exhibitors selling real estate, financing, services and still more advice. Developers from sunny climes like Florida and Las Vegas pedaled pre-construction condos. The condos were easily financed and ripe for flipping, one developer told me, because they were priced below market and the market was sure to rise since fresh retirees were arriving daily and bidding it up. It turned out finding below-market real estate was easier than I thought as here it was looking for me.

The gurus explained that there is plenty of property everywhere available from “motivated sellers” at “below-market” prices. That the gurus were surrounded by thousands of motivated buyers, representing millions more who had already bid up property prices seemed not to register. A good guru stays on message. “We do not buy retail,” intoned Scott Scheel, a specialist in commercial properties. “Do you think Donald Trump, buys retail?” he asked, invoking the man himself.

The key was finding it soon and selling it fast, and that could be done by learning a few “secrets.” Some of the secrets were aired to the thousands in the Javits Center. But the good guru withholds just enough to sell pricy courses a few weeks hence. There, in the company of just a few hundred, the more secret secrets would come to light.

Scheel for instance offered a course valued at $10,476, and a bargain at that. But then he priced it well below market himself-- at $1497 to the first 200 to sign up. At first, there were few takers. But as he moved to the back of the room, braying his pitch, he was joined by a few, and then man, an unruly mob clamoring for the bonus available to those at the front of the line.

If Scheel and folks like Ron (“How to Quick Turn Real Estate in NY with No Money Credit or Risk”) LeGrand were infomercials for themselves, Kiyosaki mastered the soft sell. While he punctuated his speech with examples drawn from his various books and lessons from his board game, he didn’t scream it. Still, pupils were drawn to his exhibit booth, which did a brisk business in books and CDs by Kiyosaki and by advisors to Kiyosaki, as well as in the cash flow game, which was selling for $175.

Though it’s easy to denigrate self-help authors in general and the Learning Annex in particular, finding a dissatisfied customer at the expo was like looking for an atheist at a revival meeting. Part of the reason: despite the grandiose claims of the gurus, expectations of the acolytes are generally modest.

Fans—and they were everywhere—were vague about their desires, but certain they’d been met. Michael Bressler, who works “in commodities” said, “He’s probably the only person who puts it in a simple message,” and added, “I look at assets the way he looks at assets. He’s just amazing.” Marie Menerville, a real estate agent and investor, said simply, “All his books are very informative, very motivational.” Many fans said reading Kiyosaki and playing his board game did indeed spur them to take control of their financial lives.

Although his message goes beyond real estate, most of his wealth, he says, is from property. Given his propensity, it’s natural to ask him whether real estate prices are at bubble levels. “Absolutely,” he told me, going so far as to compare the U.S. today to Weimar Germany. But with a bust imminent, his wife Kim advised, it’s more important than ever to separate good real estate deals from the bad.

How to know the difference? One way is to read a book just written by his own real estate advisor, Ken McElroy, and published in the Rich Dad series, or he can listen to Kim, who spoke on “How to Spot a Good Deal from a Bad Deal.”

Though Kiyosaki seeks his counsel in-house, the ordinary gurus do seem to learn from each other. LeGrand cited the wisdom of Sylver. Probate specialist Mark Gonsalves referred repeatedly to Kiyosaki. Everyone involved cited the example of Trump and the word of Robbins to the effect that you must “take action” especially with regard to signing on for additional seminars.

Only Trump himself refused to play the game. Not to denigrate the speakers who came before him, but “it’s all about instinct,” Trump said. His instincts, for instance, led to “The Apprentice” and success after success. He also advised the aspirants to be nice to their bankers so they won’t screw you. But if they (or anyone) do screw you, “You screw them back ten times harder.” Do what you love, stay focused and never quit, he said. Finally, “Be lucky,” he advised. The crowd stood and cheered for the man who Kiyosaki called “the world’s rich dad.”

On the way out, one man who would be Trump bellowing into his cell phone, reviewing the billionaire bromides. The man paused to listen. Then he said: “Sure I’ve heard it before, but it’s good to hear it from another perspective.”

Thursday, October 27, 2005

Harriet Who?

Based on my piece in BreakingViews:

Harriet Miers’ pressured withdrawal of her nomination for the U.S. Supreme Court raises not one question of succession, but two.

Most immediately, there is the question of who President Bush will nominate to replace retiring justice Sandra Day O’Connor. If he nominates another woman, he can be accused of pandering and imposing a quota at the highest level of government—creating a de facto “woman’s seat” on the Supreme Court (or, more specifically, a Republican woman’s seat). If he appoints another marginally qualified loyalist, like Miers, it will raise serious questions of competence. If he appoints a red meat anti-choice conservative, he will provoke a fight with Democrats, and even a few Republicans, that social conservatives say they want, but which Bush has taken pains to avoid.

If that fight ensues, it will be bloody, and will test whether Bush really wants to work hard to please that part of his base—or if he just wants them handy at election time.

Perhaps more serious is the question of presidential succession. As Vice President Dick Cheney has sworn off his own presidential aspirations, there is no clear successor to the Republican presidential nomination. Bush has no one to hand the mantle of power. That means no one stands ready to advance his agenda, whatever it may be. That makes him more of a lame duck—and an earlier lame duck—than second term presidents are normally.

Bush has lost the fight over Social Security. The next big item on the domestic agenda is tax reform. Lowering taxes is easy politically. But tax reform, if revenue neutral, means winners and losers and tough choices. A president who botched Katrina and nominated Miers and whose senior advisers may be indicted any day, bogged down in Iraq, probably won’t have much political capital left to do any serious governing.

Friday, October 21, 2005

Selling of the New York Times

Let the Times be Google

A similar posting by me appeared in BreakingViews

Google, with a market value of $86bn may or may not be wildly overpriced. But the fact an upstart, selling nothing but access to information, is worth more than 20 times The New York Times Company, proud owner of the US paper of record, is a stunning fact. How can the Times get a piece of the Google magic?

Certainly it needs a boost as the company these days can’t satisfy anyone. Its quarterly earnings reported yesterday were down by 52% on higher payroll, printing and distribution coats. Editorially, it obsesses in scandals of its own making, such as Jayson Blair and, recently, the Judith Miller affair. Like all newspapers it suffers from competition from the web. The Times own web site is popular—21 million unique visitors in September-- but readers were irked when they were asked to pay for access to the newspaper’s columnists.

One would be hard pressed to say that Google is a superior portal to information than is the Times Company (which also owns other newspapers, and television and radio stations). But the Times, even more than Dow Jones or Gannett, has failed to monetize its information, and seems to have no solid plan to do so. Still in a late ‘90s era which glorified “eyeballs,” the Times has refused to charge online readers. Then it took a half-step by charging for its opinion columns.

What it should do is sell the daily paper online. Sure it will lose some readers, but if the Times is compelling, millions will pay. Then it should monetize yesterday’s papers, which no one normally pays for. It then should make the Times archive into a massive, searchable database. The database should be free, but indispensable. In other words it should be good enough that it can be funded by ads targeted to the search term: the same business that made Google rich.

Google says it wants to catalogue the world’s information. But it owns none of it. Surely the fact that the Times produces buckets of information should be worth something.

Monday, October 17, 2005

Miller's Mess

The Judith Miller affair continues to spin. Miller's own first person account of her grand jury testimony actually makes her seem worse than we knew:

"Mr. Fitzgerald asked about a notation I made on the first page of my notes about this July 8 meeting, 'Former Hill staffer.'

My recollection, I told him, was that Mr. Libby wanted to modify our prior understanding that I would attribute information from him to a 'senior administration official.' When the subject turned to Mr. Wilson, Mr. Libby requested that he be identified only as a 'former Hill staffer.' I agreed to the new ground rules because I knew that Mr. Libby had once worked on Capitol Hill".


Here, Miller agrees not just to keep Libby's ID hidden, but to lie about that ID. This strikes me as a particularly egregious practice, worse than allowing him anonymity? Indeed, it emphasizes what I wrote in Forbes back in February: The idea of a journalist shield rule is to protect the anonymity of sources who fear retribution from the powerful, whether in government or business. Shielding the identity of a top government official who is using his anonymity to mislead play the press to his benefit turns the whole rationale on its head.


Here's how I put it in Forbes.com:

Expose The Press Players
Dan Ackman, 02.16.05, 9:12 AM ET


News accounts of the appeals court decision in the Valerie Plame affair emphasize that reporters must testify to a grand jury or face jail. But that's not quite right. The court's ruling yesterday was really that anyone and everyone must testify to the grand jury, reporters being no exception.

Yesterday's ruling by the D.C. Circuit Court of Appeals upholds an earlier judgment that Matthew Cooper of Time magazine and Judith Miller of the New York Times have an obligation to testify to the grand jury about who leaked Plame's identity as a CIA agent, which could be a federal crime. Both reporters fought to stop a subpoena from a special counsel appointed by the attorney general investigating the leaks. They cited a purported journalist's privilege, which they say is necessary to protect sources who spoke to them pursuant to an agreement that their names be kept out the papers. The court said there is no such privilege either under the first amendment or federal common law.

Whether there should ever be a journalist's privilege is an interesting question. As the court pointed out in its decision yesterday, many states have enacted so-called shield laws, which protect the relationship between a confidential source and a reporter. The court also noted that the federal government has no such statute, and it declined to create the privilege on its own....

The idea that reporters should be permitted to shield the identity of confidential sources even in the face of a valid grand jury subpoena is based on the belief that an evidentiary privilege (like the one a lawyer shares with his client) will encourage sources to reveal truths to journalists. The classic example would be a witness to a scandal who tells what he knows to a journalist, who then makes the scandal known, albeit without the name of his source who leaked the information. It's hard to believe that the remote possibility of a subpoena down the road from a grand jury--which itself operates in secret--will substantially chill the source-reporter relationship.

In any event, the Plame case is nothing like the prototype that might justify a privilege. In this case, the crime, if there was a crime, was the leak itself. The sources were not witnesses to scandal; they are the scandal. Those who exposed Wilson's wife in effect used the press to do their dirty work, not to cleanse it. Their goal, at least according to Wilson, was not to reveal truth, but to punish Wilson for his revelations.

As best as we can tell, they are not brave truth tellers, but craven score-settlers, and powerful government officials to boot. Wouldn't it serve even the press' interest--along with everyone else's--to expose these scoundrels rather than continue to help them hide?

Wednesday, October 12, 2005

That Dobson is such a cutie

He told me where the body was and where I could find the murder weapon. He explained the cause of death in detail, but, no, he did not admit killing the man....

From the New York Times, Oct. 12, 2005:


Mr. Dobson said he talked to Mr. Rove on Oct. 1, two days before Mr. Bush announced his choice, and had been told that "Harriet Miers is an Evangelical Christian, that she is from a very conservative church, which is almost universally pro-life, that she has taken on the American Bar Association on the issue of abortion and fought for a policy that would not be supportive of abortion, that she had been a member of the Texas Right to Life."

Mr. Dobson went on to say that he and Mr. Rove had not discussed cases that might come before the court and that "we did not discuss Roe v. Wade in any context." The Supreme Court's 1973 decision in Roe v. Wade established a woman's right to have an abortion.

Ackman and the Cronies

Are journalists and even lawyers grromed to be liberal Democrats. More likely they start out that way. John Tierney sees it as a problem, one of self-selection or cronyism:

John Tierney writes in his October 11 NY Times Column:

October 11, 2005
Where Cronies Dwell
By JOHN TIERNEY
Journalists and legal scholars have been decrying "cronyism" and calling for "mainstream" values when picking a Supreme Court justice. But how do they go about picking the professors to train the next generation of journalists and lawyers?

David Horowitz, the conservative who is president of the Center for the Study of Popular Culture, analyzed the political affiliations of the faculty at 18 elite journalism and law schools. By checking all the party registrations he could find, he concluded that Democrats outnumber Republicans by 8 to 1 at the law schools, with the ratio ranging from 3 to 1 at Penn to 28 to 1 at Stanford.

Only one journalism school, the University of Kansas, had a preponderance of Republicans (by 10 to 8). At the rest of the schools, there was a 6-to-1 ratio of Democrats to Republicans. The ratio was 4 to 1 at Northwestern and New York University, 13 to 1 at the University of Southern California, 15 to 1 at Columbia. Horowitz didn't find any Republicans at Berkeley.

Some academics argue that their political ideologies don't affect the way they teach, which to me is proof of how detached they've become from reality in their monocultures. This claim is especially dubious if you're training lawyers and journalists to deal with controversial public policies.

I realize, from experience at six newspapers, that most journalists try not to impose their prejudices on their work. When I did stories whose facts challenged liberal orthodoxies, editors were glad to run them. When liberal reporters wrote stories, they tried to present the conservative perspective.

The problem isn't so much the stories that appear as the ones that no one thinks to do. Journalists naturally tend to pursue questions that interest them. So when you have a press corps that's heavily Democratic - more than 80 percent, according to some surveys of Washington journalists - they tend to do stories that reflect Democrats' interests.


The following day, the Times published my letter to the editor:

From The New York Times, Oct. 12, 2005

To the Editor:

As a graduate of both law school and journalism school, I find it hard to argue with John Tierney's premise that law professors and especially journalism professors tend toward liberalism. But it's harder to argue that either profession favors liberals outside the academy.

Indeed, conservative lawyers, if they are a minority, have a much better shot at judgeships or high-level government positions since it's conservatives who are doing the appointing more often than not.

More broadly, if liberals are channeling their own most brilliant acolytes into law and journalism, that just leaves more space in business schools, banks and corporations for young conservatives. Thus, the conservatives wind up wielding greater power, lacking only vague cultural influence.

If conservatives had concocted this arrangement deliberately, they could have hardly done better for themselves.

Daniel L. Ackman

Jersey City, Oct. 11, 2005

Wednesday, October 05, 2005

Why Miers?

Not only has Harriet E. Miers never been a judge, she has barely been a litigator.

She must not have done very well in law school, because had she graduated with any kind of honors, we would have heard about it.

Then, according to the blog Is That Legal,, citing New Jersey lawyer Peter Goldberger:

A quick WestLaw search suggests that Harriet Miers has never argued before the Supreme Court (nor has her name appeared on brief there), and she has argued three cases before the Fifth Circuit (with her name appearing as additional counsel on a handful of others) over the last 30 years -- two of them pro bono or by appointment of the court. Her argued cases are: Thanksgiving Tower Partners v. Arnos Thanksgiving Partners, 64 F.3d 227 (5th Cir. 1995) (commerical real estate dispute); Ware v. Schweiker, 651 F2d 408 (5th Cir. 1981) (volunteer pro bono counsel for Social Security disability applicant, through legal aid program); Popeko v US, 513 F.2d 771 (5th Cir. 1975) (sec 2255 appeal for federal prisoner, by appt of court).


Her record in the Texas state courts is equally limited.

The one defense to the cronyism charge is that President Bush and Miers are probably not all that close. You don't appoint good friends to be lottery commissioner. That's where you install friends of cousins' friends. That she was Bush's "personal lawyer," strikes me as inconsequential, too. Bush never had the kind of career, nor the inclinaion (that is an interest in doing things legally), that would lead him to forge strong ties to his lawyer.

Then there is the comparison with other non-judges to get the high court nod. These individual tended to be towering figures-- attorneys general, senators and so on.

Of recent justices who were never judges, all were either distinguished lawyers, holders of high office or top Justice Department lawyers. Here’s a list:

Owen Josephus Roberts: appointed by Hoover in 1930; was in private practice, but also had served in federal law enforcment as special counsel

Stanley Forman Reed: appointed by F. Roosevelt 1938; was U.S. solicitor general

Felix Frankfurter: appointed by F. Roosevelt in 1939; was a top tier law professor at Harvard

William Orville Douglas: appointed by F. Roosevelt in 1939; was SEC chairman

James Francis Byrnes: appointed by F. Roosevelt in 1941; was a U.S. Senator

Robert Houghwout Jackson: appointed by F. Roosevelt in 1941; was U.S. Attorney General

Harold Hitz Burton: appointed by Truman in 1949; was a U.S. Senator

Thomas Campbell Clark: appointed by Truman in 1953; was U.S. Attorney General

Earl Warren: appointed by Eisenhower in 1953; was Governor of California

Byron Raymond White: appointed by Kennedy in 1962; was Deputy U.S. Attorney General

Arthur Joseph Goldberg: appointed by Kennedy in 1962; was Secretary of Labor

Abe Fortas: appointed by Johnson in 1965; was in private practice and known as a first class Supreme Court advocate

Lewis Franklin Powell, Jr.: appointed by Nixon in 1971; was in private practice, also president of the ABA

William Hubbs Rehnquist: appointed by Nixon in 1971: was Ass't U.S. Attorney General


Harriet Miers was a top manager of her law firm, but never a leading lawyer by any lights. To be sure, may Supreme Court justices become “great” or have greatness thrust upon them. They don’t necessarily start out that way. (And after all, what is a federal judge but a lawyer who knows a senator?) Still, unlike the future justices listed here, she has not been steeped in federal law or the type work in which federal judges must know.

Tuesday, September 13, 2005

Virtual Excitement

At the Cyber Games, Even Virtual Excitement Is in Short Supply
FROM THE WALL STREET JOURNAL
By DAN ACKMAN
September 13, 2005; Page D8

New York

Cyber games may be small-time now, but Peter Weedfald has seen the future and the future is Korea. In Korea, top videogamers can earn six-figure salaries and have the status of sports stars. The "gamers" and their games are the subjects of two 24-hour cable television networks devoted to gaming the way ESPN is devoted to sports. "You'll see [gamers] on a box of Wheaties," Mr. Weedfald says. If you think his vision is far-fetched -- well, five years ago the popularity of poker on TV might have seemed far-fetched, too.

Mr. Weedfald is a marketing executive for Samsung Electronics, the lead sponsor for the World Cyber Games, whose U.S. final was held over the weekend at the Hammerstein Ballroom in Manhattan. So his enthusiasm may be understandable. But he may have to wait for Wheaties if this weekend's event is any indication.


Hoping to exploit the popularity of videogames, the World Cyber Games promotes tournaments as both sporting events and cultural festivals. But are they either?


The World Cyber Games, owned by South Korea-based International Cyber Marketing Inc., aims to both exploit and expand the popularity of videogames and to be both the Olympics of cyber-sport and "a true world cultural festival." But even at the highest level, and with all due respect to the fans in Korea, a gamer in full action is still a kid staring at a screen while twiddling his thumbs on a console or fingering a mouse. Just as videogames are essentially cartoons of the action they parody, cyber games, even at their highest level, are parodies at best of sporting competitions.

If the U.S. finals of the World Cyber Games are any indication, they are joyless and don't provide much in the way of culture, either.

That gaming has a world-wide following is undeniable. Americans spent $9.9 billion on videogames last year, including software, consoles and accessories, according to the NPD Group, which tracks the industry. World-wide, 500 million people play videogames on a regular basis, says Robert Krakoff, president of Razer, a maker of videogame peripherals and a World Cyber Games sponsor. An untold number play the games seriously enough to compete in leagues and tournaments over the Internet. Those who aspire to gaming glory devote as much as 50 hours a week to the games, though most of the top players can maintain their skills by practicing 20 hours weekly.

The World Cyber Games is not alone: The gaming circuit competes for primacy with the Electronic Sports World Cup and the World E-Sports Games. About 40,000 entered World Cyber Games qualifiers, which are open and free of charge, organizers say. International Cyber Marketing flew 185 contestants (184 boys and young men, nearly all between 18 and 22, and one girl) to New York to compete for $34,000 in total prize money and a spot on Team USA, which will compete for a world championship in Singapore next month. There the prize money will total $420,000.

Last year in San Francisco, the U.S. team placed third, its best finish in four tries at the World Cyber Games, trailing Korea and a plucky squad from the Netherlands. Why doesn't the U.S. lead the world in cyber games? Don't American kids have more computers and more free time?

A partial answer may be found in the mix of games selected. The U.S. is good at shooting games, says Won Suk Ohm, executive vice president of World Cyber Marketing. It won the world title last year in Counter-Strike, a personal-computer-based game played between teams of mock terrorists and counter-terrorists, and Halo 2, an Xbox console game that mimics gunfights between genetically enhanced super-soldiers. But America is not so good at strategy games like StarCraft or WarCraft III, both for PCs. It also lags in FIFA Soccer.

True to form, most of the excitement at the Hammerstein Ballroom on Saturday was during the shooting events. In Halo 2, Dan and Tom Ryan, twin 19-year-olds from Pickerington, Ohio, representing Team 3D, a professional squad, beat another Team 3D pair in the final. In an earlier round, two-time World Cyber Games champion Matt Leto, at 21 an aging cyber-gunslinger, was knocked out.

The high point of the event was the Counter-Strike final, where another Team 3D squad beat Complexity in a tight final match. While Team 3D was defending champ in the five-man game, Complexity had won the Electronic Sports World Cup in Paris in July. The Team 3D Counter-Strike players are among the two dozen Americans who can make a living playing videogames, according to Craig Levine, 22, the team's managing director.

For all the artificial mayhem, the atmosphere in the ballroom was subdued. To be sure, the organizers do their best to inject excitement. "Cultural events" included an appearance by Mick Foley, a professional wrestler, who signed autographs.

Organizers employed "shoutcasters," who are something like sportcasters, only louder and more frenetic, to sit on stage screaming explanations of what was happening on overhead screens being manipulated offstage if not entirely out of sight of the small band of spectators who showed up.

For the most part, though, it was hard to get a rise out of either the gamers, whose eyes were locked on their video screens, or their fans. Victorious gamers all seem to have learned to mimic the most numbing clichés of actual athletes: "We were confident going in … We knew it was going to be a tough game" and so on. Team 3D's Josh "Dominator" Sievers, for instance, when asked to express his emotions after winning the final, expounded in slightly greater detail: "I guess anyone who ever played a sport in high school and won a big competition knows how it feels."

Gamers would know how it feels, too, if they ever pulled away from the screen and had the experience.

Mr. Ackman is a writer for Breakingviews, a financial news and opinion Web site that will have a regular column in the Journal's new Weekend Edition.

URL for this article: http://online.wsj.com/article/0,,SB112655995000738479,00.html?mod=at%5Fleisure%5Fmain%5Freviews%5Fdays%5Fonly

See also: Ackman on Sports

Monday, September 12, 2005

Praising the Pitchman

From The Sunday New York Post (9/11/05)

HAWKER REDEEMED
By DAN ACKMAN

Victor Grillo Jr. has long been the red-headed stepchild of the advertising world.

Rarely singled out for praise, Grillo seemed to only get attention when folks mocked him for his informercials.

After all, it was Grillo who brought the Ginsu 2000 knife set and his Liquid Leather wonder product to late-night television.

Go ahead, raise your hand if you, too, gave Grillo's products a laugh.

Lately, though, it's Grillo and his brethren in the 1-800 advertising business that have been doing the laughing — all the way to the bank.

That's because after years of shunning the direct-response genre of advertising, the Fortune 500 crowd is moving in.

And Grillo, among the pioneers of the infomercial business, has been there to greet them, ringing up business for his Advanced Results Marketing company while still pushing his own products on the side, like the Everlife Flashlight — no batteries or bulbs!


Having several Fortune 500 companies as clients has brought Grillo not only more success, but a feeling of redemption. If Madison Avenue once considered him a cockroach, as Grillo is fond of saying, "At least now we're a big cockroach."

Feeding the growth of direct-response advertising is the ability of companies to directly gauge the impact of a commercial.

The basic idea is that rather than vague ideas such as brand-building, the advertiser knows precisely whether his ads are generating a return.

Lately, traditional advertisers such as BMW, Procter & Gamble and pharmaceutical giants including Pfizer have been spending at least part of their ad budgets on direct response. David McCracken, a spokesman for P&G, says the change in the ad mix is part of a renewed emphasis on return on investment. Grillo's ARM, based in Marlboro, Mass., now counts among its clients The Holmes Group, Conair and a half-dozen Las Vegas casinos.

Grillo, 39, is not the biggest as-seen-on-TV seller. Guthy-Renker, which claims more than $1 billion in annual sales, likely holds that title. And he is not the biggest direct-response ad agency either. But he is rare in that he does both. He is also unique as an on-air pitchman for his own ad agency, hawking ARM's services on morning cable news shows.

Grillo says his Everlife Flashlight is the No. 1 direct-response product on TV. He exaggerates, but just a little, as Jordan-Whitney, a company that ranks infomercial buys, says the flashlight has not top-ranked, but has been consistently in the top three in recent weeks. The flashlight will also be available in major retail chains this Christmas season.

Direct-response advertising, whether in long-form or full 30-minute infomericials, differs from traditional advertising. All ads have a "call to action," meaning a plea to call an 800 number, whether to buy a product or simply request more information.

Call-to-action advertising is popular because it is charged a lower fee than normal TV advertising. However, it is not guaranteed a time slot and is often banished to late-night or overnight periods.

ARM has recently merged with a Results Media, a traditional media-buying company based in Phoenix, in a $40 million deal. The combined company projects $200 in media buys this year, along with about $60 million in product sales.

Though he still relishes his Triple Edge Wiper Blades-hawking past, Grillo admits, somewhat ruefully, "We're getting to be respected."

See also my article in Forbes: Near-Perfect Pitch

The house Katrina built

This is from my column BreakingViews

Hurricane Katrina: The justly-maligned US government's Federal
Emergency Management Agency (Fema) has just contracted with
five major corporations supposedly to speed emergency housing
relief to Gulf Coast families displaced by Hurricane Katrina.
The oddity is that there is already an abundance of unoccupied
housing in the US, not least in the areas affected by Katrina.


What's the explanation? Well, at one level, one might just
shrug one's shoulders. Perhaps it should come as no surprise
that the hapless Fema, now a unit of the vast bureaucracy that
has become the Department of Homeland Security, seems unaware
of the situation on the ground. At another level, one could
view this as another example of excessive government largesse
in the face of disaster - perhaps to quell disastrous
criticism of its initial poor response.

But it is also worth questioning Fema's motives for doling out
lucractive contracts. After all, the five contractors -
Bechtel, Fluor, Shaw Group, CH2M Hill and Dewberry
Technologies - may all be expert in massive engineering
projects. But none is known as a housebuilder. Curious minds
will also note that Bechtel and Fluor happen to be actively
engaged in Iraq.

Luckily for the US, there is no shortage of home builders.
Indeed, new home building has been proceeding at a torrid rate
for the past five years. And most of the building has been in
the south and west, in areas where Katrina's victims lived and
have now dispersed.

One consequence of all that construction, and of low mortgage
rates, is that the vacancy rate for rental housing is at or
near record levels. The rate for the US as a whole is just
under 10%, according to the Census Bureau. But it's higher -
at 12% - in the south. While Louisiana's rental vacancy rate
is on the lower side for the region, nearby Alabama, Texas and
Georgia are all among the highest nationally. Vacancy rates
for lower-priced houses are even higher than for more
expensive homes.

As there are 34m rental units in the US, that means that more
than 3m are empty. With thousands of refugees now housed in
sports stadiums and convention halls, it would seem there is
little time to await the construction of even temporary
housing. If the federal government could provide just a little
grease in terms of help relocating and some rental subsidies,
the problem of housing Katrina's refugees seems quite
solvable. Bechtel's expensive help is not required.

See also: Fresh Pricks in the Housing Bubble

Thursday, September 01, 2005

Zero Tolerance... Zero Intelligence

President Bush has said many inane things on the campaign trail and during his presidency (for him, bascally the same). But some of his remarks in reaction to New Orleans have to be among the worst.

First, Mr Bush flew over New Orleans and parts of Mississippi's in Air Force One after famously "cutting short" his 33-day vacation by all of two days. Turning to his aides, he said: "It's totally wiped out. ... It's devastating, it's got to be doubly devastating on the ground."

This remark presumes that his aides had not been watching television, or worse, no one told the President about what had happened until he took off. What, one wonders, were his aides supposed to say back.

The next day Mr. Bush told Good Morning America: "I think there ought to be zero tolerance of people breaking the law during an emergency such as this, whether it be looting, price gouging at the gasoline pump, or taking advantage of charitable giving, or insurance fraud."

Say what?!? Was anyone thinking about insurance fraud? Of course, the President was talking about looters. Zero tolerance is always a dumb and empty phrase. But in this context, it proves a true moron. Should cops and judges really have zero tolerance for someone stealing food or diapers, or even if they are part of mob stealing TVs. Certainly if there was ever a time for some degree of tolerance, this is it.

Wednesday, August 24, 2005

Loosey Goosey Loans

One of the less explored angles of the recent housing booms has been the decline in lending standards. Loan officers in California and others familiar with the situation there tell me that they routinely give interest only loans and loans based on stated incomes that banks do not verify at all. See California's Home Boom Looks Like A Bubble But the question is why. Don't the banks want to make sure they are repaid?

Amazingly, the answer is they may not care. A article in today's Wall Street Journal puts a number on the selling of loans. It says: "U.S. lenders will make about $2.8 trillion in home-mortgage loans this year, according to the Mortgage Bankers Association. The MBA estimates that about 80% of these loans will end up in mortgage-backed securities. Mortgage-backed securities outstanding at the end of the first quarter totaled $4.61 trillion, up 61% since the end of 2000. In the same period, total Treasury securities outstanding grew 35% to $4.54 trillion."

Once the bank sells the loan, repayment is not a big issue. From the borrower's pint of view, many assume that if payments get difficult, they will simply re-sell at a profit. It's all reminiscent of the Tom Lehrer line about Verner Von Braun: "Once the bombs go up who cares where they come down? That's not my department." See also: Fresh Pricks In Housing Bubble.

Tuesday, August 23, 2005

Iranian Pride Project

To me the idea of invading Iraq was never nearly as bad as the justification for it. There was merit in deposing Saddam Hussein: First, he was murderous to his own people; Second, he had a tendency to invade his neighbors. But no vague or waffling justification for war can ever be valid. War is something one does when one is 100% certuan, not 51%. And lying about war and peace is a cardinal offense for any leader:

Bush and Cheney told the Congress and told the world that that Iraq had WMDs. The mistake may be forgivable, but acting on it is not. It was never forgivable to play bait and switch over matters of war and piece.

This morning's Washington Post has a similar story. It says: "Traces of bomb-grade uranium found two years ago in Iran came from contaminated Pakistani equipment and are not evidence of a clandestine nuclear weapons program," according to a group of U.S. government experts and other international scientists.

This is amazing to me (not that I have followed the Iran nukes story all that closely. But the idea that one can assert that a country has nuclear weapons or is trying to get them without being certain of the charge seems very dangerous.

The WP report quotes a "senior official" who says, "'The biggest smoking gun that everyone was waving is now eliminated with these conclusions.'"

Their conclusion is that Iran's long contention that the uranium traces were the result of contaminated equipment bought years ago from Pakistan is correct. Still, the Bush administration had pointed to the material as evidence that Iran was making bomb-grade ingredients.

That's stunning news in particular and worrisome in general that such weighty matters can be babdied about without extremely solid proof.

Tuesday, August 16, 2005

The Nation Comes to J.C.

Here is my piece from the New York Post on real estate in my adopted hometown of Jersey City.

City Dwellers

The New York Post

By Dan Ackman

August 14, 2005

The land rush under way in Jersey City is attracting some surprise players — the nation's largest homebuilders, much more accustomed to earning their profits in the greener pastures of suburbia.

But as large, profitable tracts on less crowded land are harder to come by, Pulte Homes, Toll Brothers and Centex have moved their equipment into urban landscapes for the first time.

They join a fourth builder, Hovnanian Enterprises, which had already made the move.

The new developments are part of what the companies call "urban infill" — a return to older cities.

Nowhere is the emerging business model for the publicly traded homebuilders more evident than just across the Hudson, in Jersey City and neighboring Hoboken.

Pulte Homes, based in Bloomfield Hills, Mich., and Hovnanian, based in Red Bank, N.J., both have projects in Jersey City's tony Paulus Hook section.

Dallas-based Centex is building on the west side of town overlooking Newark Bay, where Hovnanian is adding a new phase to an existing project. Toll Brothers, based in Horsham, Pa., just broke ground on condos near the Holland Tunnel exit on the Hoboken border, adding to a pair of developments in Hoboken itself.

Two causes are sharpening the companies' focus more on urban locales.

First, there is increasing demand for homes that afford an urban lifestyle that is entirely dependent on the car.

Second, suburban communities are starting to rebel at perceived overdevelopment by implementing tighter building and zoning restrictions. To maintain their heady growth rate, the companies are being forced to come back to land that has long been developed and create new types of homes attractive to couples and young families as well as empty-nesters.

The latest arrival in Jersey City is Centex, which is building 120 town homes and loft-style apartments at Westside Station, the first of which are scheduled for delivery late this year.

Robert Forniadis, a senior vice president and director of land acquisition, says the proximity to Manhattan and the desire of buyers for more traditional communities are the reasons Centex has come to Jersey City.

While Centex and others have long been in the business of building planned developments, Forniadis concedes, "We call them neighborhoods, but they're really not." Jersey City, while less dense than the five boroughs, is closer to the real thing. More of their customers want shorter commutes and homes closer to entertainment, "not McMansions where you have to drive to get to the mailbox."

At the opposite end of town, Toll Brothers is building a 230-unit condominium called 700 Grove. While prices in Jersey City and Hoboken are still not at Manhattan — or even north Brooklyn — levels, Benjamin Jogodnik, a Toll Brothers vice president, says prices on their existing Hoboken projects have gone up by about 40 percent in two years.

Hovnanian, whose headquarters are just an hour's drive south, started its first Jersey City project called Society Hill in 1985. But it has ramped up its interest in the city recently. Not only is it adding 380 town homes in a development called Droyers Point, but it is building town homes and one- and two-bedroom condos in Paulus Hook, a historic section across the river from Manhattan's financial district.

Doug Fenischel, a spokesman for Hovnanian, says the regulatory process in suburban areas has made building there more difficult. But building in urban areas has become easier, at least in the sense that new technology has made land cleanup more feasible. The combination of factors has made returning to land long occupied often by factories, or even waste dumps, more attractive for builders and home-buyers alike.

Fenischel allows that no more than 5 percent of Hovnanian's business is urban. "But we expect that to increase dramatically."

Monday, August 08, 2005

Bubble Bubble

Paul Krugman has a good piece on the housing bubble today:

That Hissing Sound
By PAUL KRUGMAN
This is the way the bubble ends: not with a pop, but with a hiss.

Housing prices move much more slowly than stock prices. There are no Black Mondays, when prices fall 23 percent in a day. In fact, prices often keep rising for a while even after a housing boom goes bust.

So the news that the U.S. housing bubble is over won't come in the form of plunging prices; it will come in the form of falling sales and rising inventory, as sellers try to get prices that buyers are no longer willing to pay. And the process may already have started....

I, however, was writing the same thing back in April (not that I was the only one):

Our Schizophrenic Housing Market
Dan Ackman, 04.27.05, 11:16 AM ET

Yesterday, the news that new U.S. home sales were up 12.2% in March to record levels caused some confusion, as most economists had expected a slowdown amid a slight jump in mortgage rates and a decline in housing starts the same month.

Sales climbed to an all-time high, a seasonally adjusted annual rate of 1.43 million units--bettering the old mark of 1.3 million units set last October, the U.S. Commerce Department reported. Prices were up sharply, too. The gains were in all regions but were most pronounced in the South, where new-home sales jumped 18.6%. In the Northeast, the rise was just 1.2%.

This disparity highlights the schizophrenia in the U.S. housing market, both in terms of price and construction. Thus the answer to the debate about the housing bubble may be, "It depends on where you are."...

Saturday, August 06, 2005

Misundertrusted

There is a good piece by Jack Shafer in Slate today on the phoniness of surveys that purport to show massive mistrust of the media. Why I Don't Trust Readers

Shafer makes the point that expressing mistrust of media is a largely political statement. To me, it's like saying "I'm counterculture," an some Republican suburbanites like to think of themselves that way, oddly enough.

I have long distrusted such surveys myself. What does it mean that 54% of the people believe what they read in the newspaper. Does that mean when the Daily News says the Mets beat the Cubs 5-3, half the folks think the Cubs, in fact, beat the Mets 4-2?

I wrote about a similiar survey a while back: For 53% Reliable Information, Click Here:

NEW YORK - According to a new survey, 52.8% of Internet users believe that most or all of the information online is "reliable and accurate."

Other highlights from the report issued by the UCLA Center for Communication Policy: About 61% find the Net "very" or "extremely" important as an information source, and Internet use is cutting into television time with Internet users watching about 4.8 fewer hours of television each week than nonusers. Among Internet users, 60.5% consider it to be a "very" or "extremely" important source of information. Just 25% consider it to be an important source of entertainment. The percentage of Americans who use the Internet actually fell, the survey says, from 72.3% to 71.1%, but the average time spent online was up substantially, to 11.1 hours per week.

That people are gravitating from the television to the Internet, especially for information, is, of course, extremely good news--at least for us. But while they are coming more, they are believing less: Last year the UCLA survey indicated that 58% of Internet users believed that most of what they read online was "reliable and accurate."

Wednesday, August 03, 2005

Return of the yellow peril (CNOOC)

As the CNOOC/Unocal drama looks over, here is a reminder of some of what i wrote for Forbes.com.


Top Of The News Yellow Peril Seeks Black Gold Dan Ackman, 06.24.05, 9:17 AM ET

OK, China, here's the deal:

You send us billions of dollars' worth of clothes and steel and fish and computers and things. Make it, say, $200 billion worth this year, and a little more each year after that. Wait, make it a lot more. We'll send you maybe $40 billion in plastics and computer chips and airplanes and all that. The rest we'll make up with dollars.

What should you do with all those dollars?

Heck, I don't know...go to Wal-Mart.

Right, Wal-Mart's got the stuff you sent us in the first place.... Right, bad idea....

OK, I got it: buy Treasury bills. We got one heck of a deficit problem here, and you can't really expect us to shoulder the whole load can you? What's that, you still have some dollars left? We can let you have some more of those T-bills. They pay 4% interest. Now that's free money, that's what that is.

What? You say you want oil....

Our oil! You want to buy a whole oil company?...

One of our oil companies?...

One of our Texas oil companies....

California, OK, I see....

That's a little better. But, wait a minute, China.... Just slow down there, fella! We gotta think about this....

I'm gonna put you on hold....

You sure you don't want more T-bills?...

OK, we'll get back to you. OK, China, I did some checking with the boys back at the home office. And I gotta be honest, this oil scheme of yours--they don't like it.
For MORE: http://www.forbes.com/home_europe/energy/2005/06/24/unocal-cnooc-chevron-cx_da_0624topnews.html

More on CNOOC:

Unocal's Bid For Asia June 27, 2005 CNOOC is not buying a U.S. company as much as it is buying Asian oil and gas assets owned by Americans.

CNOOC: Wave Of Future; Blast From Past June 23, 2005 Is China now about to put its export earnings to work buying U.S. assets, just as Japan did in the 1980s?

Tuesday, August 02, 2005

The First Justice Roberts

President Bush’s nomination of John G. Roberts Jr. to the Supreme Court comes, as it happens, on the 50th anniversary of the death of the Owen J. Roberts, a Supreme Court justice who is almost completely forgotten. The story of Roberts I illustrates the difficulty of predicting a nominee’s tendencies, a fairly well-worn point. But it also shows that few Supreme Court justices prove as important as we believe they’ll be at the time of nomination.

The first Justice Roberts had been a corporate lawyer in Philadelphia who gained some fame as a special prosecutor following the Teapot Dome scandals. President Hoover settled on him as a safe choice after his first choice, John L. Parker, was voted down by a Senate that was more heavily Republican than today’s senate. (Mr. Parker had made some racist remarks on the bench.)

The first big case after Justice Roberts’ confirmation was Near v. Minnesota, which involved a state law that allowed the state to enjoin publication of “malicious, scandalous and defamatory newspaper [or] magazine” articles. The case sounds like a no-brainer, and the Supreme Court did strike down the law. But the vote was 5-to-4, with Justice Roberts siding with Chief Justice Charles Evans Hughes, also a Hoover-appointee. If the term “swing-vote” had been invented yet, Justice Roberts would have been deemed the swinger.

Justice Roberts did join the majority in the 1935 Schechter Poultry case, in which the Supreme Court held invalid a federal law that empowered the president to enact labor codes regulating the wages, hours and minimum wages of industrial employees. But the vote in that case was 9-0, and it did not prevent such regulations per se, but said Congress could not delegate regulatory power to the executive without some reasonably clear guidelines. Congress soon reworked the legislation in a constitutionally acceptable manner.

In 1937, Justice Roberts joined the majority in N.L.R.B. v. Jones & Laughlin Steel Corp., a case where the court upheld the National Labor Relations Act. He was again the swing vote in the sense that he was one of five necessary to uphold the legislation. He joined another 5-4 majority in upholding validity of the federal payroll tax imposed as part of the Social Security Act (Steward Machine Company v. Davis). He sided again with the chief justice in another 5-4 vote upholding the validity of state minimum wage laws (West Coast Hotel Co. v. Parrish).

Justice Robert’s proudest moment on the high court may have been in dissent. If Brown v. Board of Education is the case lawyers and law students use to cast the Supreme Court in a heroic light, Korematsu v. United States is its polar opposite. In that case, the justices greenlighted the placing of Japanese-Americans, U.S. citizens, in internment camps. Of course, the decision came in time of a world war. But three justices voted ‘no,’ and Justice Roberts was one of the three.

No one remembers Justice Roberts today. He was not a leader on the court; his dissents don’t ring out. No one has written his biography. There is a school district in Pennsylvania named after him, but that’s about it.

Still, he serves as a reminder. First, as is often remarked, Supreme Court justices are often surprises. And second, in the long run, justices rarely prove as consequential as they first seem.

Roberts and Roe and Rove

With all the hue and cry about Judge Roberts and his nomination, I think there are still a few points yet to be made.

First, despite what they would have their own Christian right supporters believe, the last thing Bush and Rove really want is for the Supreme Court to overturn Roe v. Wade. The Republicans have been gaining support and money based on their supposed distate for Roe for decades. if the decision is actually overturned, they would be faced with a real governing responsibility about what to do. If states started outlawing abortion, there would be a groundswell among the now understandably complacent pro-choice majority. The political force would switch sides. In other words, the Republicans would rather have the issue to campaign on than the actual victory.

Second, Roberts is above all a law man. He is, by all appearances, not an idealogue. He believes in the rule of law. And a belief in the rule of law translates into a belief in precedent. This belief is all over his jurisprudence. Here, for instance, is something from Ramaprakash v. F.A.A.,
displayTruncatedTitle("346 F.3d 1121") 346 F.3d 1121, 1124 (D.C. Cir. 2003), Roberts' very first decision on the D.C. Circuit: “[A]gency action is arbitrary and capricious if it departs from agency precedent without explanation. Agencies are free to change course as their expertise and experience may suggest or require, but when they do so they must provide a ‘reasoned analysis indicating that prior policies and standards are being deliberately changed, not casually ignored.’” (citations omitted).

Third, Roberts is a Bush I man. George H.W. Bush tried to get him a seat on the D.C. Circuit, but could not get him confirmed. Bush I appointed Clarence Thomas, but he also appointed David Souter. Roberts is too smart to be Thomas. I think he'll more likely be like Souter.