Category Archives: Commentary

CEOs, Politics, and Other People’s Money

By James Kwak

I am, on paper, a corporate law professor, because—well, I guess because I used to work for a corporation (two, actually), and the books I write sometimes have corporations in them, and I teach business organizations as part of my day job. (Secret for those looking for a job as a law professor: UConn was looking for someone to teach corporate law, and I wanted the job, so that’s what I said I could do.) But I’ve made it this far writing exactly one corporate law paper (my summary here), and that was actually about corporate political activity—namely, whether and how shareholders can challenge political contributions that they think are not in the corporation’s interests.

It is well known by now that, in Citizens United, Justice Kennedy committed one of the true howlers of recent Supreme Court history:

With the advent of the Internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters. Shareholders can determine whether their corporation’s political speech advances the corporation’s interest in making profits, and citizens can see whether elected officials are “‘in the pocket’ of so-called moneyed interests.”

The obvious problem is that there is no disclosure of corporate contributions to 501(c)(4) social welfare organizations and 501(c)(6) associations (such as the Chamber of Commerce), and even contributions to 527 Super PACs can be easily laundered through intermediary entities whose owners are secret. The second, slightly less obvious problem is that, under existing standards, there is precious little that shareholders can do to “hold corporations accountable” for political donations. Given the traditional deference that courts show to decisions made by corporate directors and officers, the latter have pretty much free rein to do what they want with their shareholders’ money.

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Candidates Who Matter

By James Kwak

Nine months ago I endorsed Larry Lessig for president because, as I wrote at the time, “If we want real change in the long term, we have to fix the system. That means real equality of political participation, not just the formal equality of one person one vote.” There is no more fundamental issue we face than a political system that is distorted by money from top to bottom. (If you think Donald Trump somehow disproves this idea, consider that fact that, right now, the campaign topic getting the most attention is the Trump campaign’s financial situation, and the strongest evidence that Clinton is likely to win is her financial superiority.)

Larry Lessig’s campaign, unfortunately, never got off the ground, in part because the Democratic establishment bent its own rules to keep him out of the debates. That’s one reason why I’m not giving money to Hillary Clinton or the DSCC or the DCCC—that and, frankly, none of them have prioritized political reform. Sure, I want Clinton to win, but I can’t afford to donate to everyone I’d like to see win. In the long run, what we need are candidates who will put political reform first—not second, or third, or fifteenth.

So here are a two. One is Zephyr Teachout, a law professor better known for embarrassing Andrew Cuomo by winning a third of the vote in the 2014 New York gubernatorial primary despite being outspent by seventy gazillion to one. She’s also an expert on corruption in the political system, having written a serious history of corruption in America. Teachout is running for Congress in New York’s 19th district (which has a primary on Tuesday). She’s already famous, so enough said. (There’s also a documentary about her run against Cuomo that’s raising money on Kickstarter, and could use donations.)

The other is Sean Barney, a classmate of mine at the Yale Law School who is running to be Delaware’s congressional representative. Sean has made political reform his top priority, and he supports a six-for-one public match for small contributions, a new Voting Rights Act, and non-partisan redistricting commissions to end gerrymandering of congressional districts. He’s also been endorsed by Larry Lessig. (And he’s a marine who was almost killed by a sniper in Fallujah before going to law school.)

Running for Congress is hard. Running on a platform of undermining the current system . But if we have a Congress that is wholly dependent on big money, we’re never going to roll back the influence of big money. At the end of the day, whether your big issue is climate change, or workers’ rights, or financial reform, that’s the only thing that matters.

I’m sure there are other candidates out there who are also dedicated to political reform. If you care about the political system, with the June 30 reporting deadline coming up—ironic as it may sound—these are the kinds of people you should consider donating to. So that one day, whether or not you can afford the donation will no longer matter.

Yes, I’ll Vote for HRC. No, I’m Not Happy About It.

By James Kwak

Now that Hillary Clinton has wrapped up the nomination, I have no problem with Clinton supporters saying that Sanders supporters should back her in the general election. I’m certainly voting for Clinton (not that my vote matters, since I live in Massachusetts), and every liberal Democrat I know who likes Sanders is going to do the same. (Yes, there are probably some Sanders voters who will vote for Trump or stay home, but they are largely anti-establishment independents who were always unlikely to vote for Clinton.)

Apparently that’s not enough for many in the Clinton camp, however, who insist that I should be happy that Hillary Clinton is the Democratic nominee, and that this is actually a good thing for progressives—defined loosely as people who want higher taxes on the rich, less inequality, stronger social insurance programs (including true universal health care), and better protections for workers. The argument is basically that Clinton is (a) more pragmatic, (b) more skilled at getting things done, and (c) more likely to be able to work with Republicans to achieve incremental good things, while Sanders would have simply flamed out in futility.

To which my first answer, which I’m sure I share with many other liberals is: Yes, I know how the Constitution works already. I know we have three branches of government, and that the Republicans control Congress.

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The Value of the Humanities

By James Kwak

In the Washington Post, Harvard Medical School professor David Silbersweig argues for the continuing value of a liberal arts education in today’s world. The “liberal arts”—usually meaning anything other than math, science, engineering, and maybe business—do seem to be under attack from all quarters, and not only from know-nothings like Marco Rubio. Just this week, the president of Queen’s University in Belfast said this (explaining why students will no longer be able to concentrate in sociology or anthropology):

Society doesn’t need a 21-year-old who is a sixth century historian. It needs a 21-year-old who really understands how to analyse things, understands the tenets of leadership and contributing to society, who is a thinker and someone who has the potential to help society drive forward.

That’s the new conventional wisdom: we need “leaders” who can “help society drive forward,” whatever that means.

Silbersweig himself majored in philosophy before becoming a doctor and a medical researcher. He makes a number of points, but this is the one you usually see in articles like this:

If you can get through a one-sentence paragraph of Kant, holding all of its ideas and clauses in juxtaposition in your mind, you can think through most anything. If you can extract, and abstract, underlying assumptions or superordinate principles, or reason through to the implications of arguments, you can identify and address issues in a myriad of fields.

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Why Justice Is So Rare

By James Kwak

Today was a victory for justice. In Foster v. Chatman—a case brought by the Southern Center for Human Rights and argued by death penalty super-lawyer Stephen Bright—the Supreme Court overturned the death sentence imposed on Timothy Foster by an all-white jury in 1987. In that case, the prosecution made sure it had an all-white jury by eliminating  (striking) all black candidates from the jury pool. In Batson v. Kentucky (1986), the Supreme Court ruled that it is unconstitutional to strike potential jurors on the basis of race, but the prosecutors’ own notes made clear that they knew what they were doing. Here are just a few examples, from the appendix. They pretty much speak for themselves.

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It’s hard to read, but next to the green blotch in the picture above are the words “represents Blacks.”

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Moral Worldviews and Empirical Beliefs

By James Kwak

Funny thing, Twitter. My most-viewed tweet ever is the following:

That’s a retweet of this, from Neel Kashkari:

The quotation about the survey is from the WSJ article about Russ Roberts that Kashkari originally tweeted.

Most of the comments on my tweet were some version of “duh.” But then there were a bunch who said some version of “correlation doesn’t imply causality” (which is an excuse to link to my favorite XKCD cartoon).

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Economics 101, Good or Bad?

By James Kwak

Over at the Washington Post, Michael Strain of the American Enterprise Institute is upset that people are picking on Economics 101. He singles out Paul Krugman and Noah Smith in particular for claiming that “the pages of economics 101 textbooks are filled with errors, trivia and ‘useless fables.'” Instead, Strain insists, “an economics 101 textbook is a treasure.” He continues by discussing some of the key insights that you can gain from the basic models presented in an introductory economics class.

Except, for the most part, Strain is rebutting an argument that no one is making. He is right to say that Economics 101 provides many valuable lessons—the competitive market model, opportunity cost, diminishing marginal returns, comparative advantage, the labor-leisure tradeoff, etc. But no one denies the analytical power of those abstract concepts.

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