Daily Archives: February 23rd, 2012

What’s in a name?

Today the Virginia State Senate effectively killed HB1, the so-called personhood bill when they hurriedly called a special calendar to re-refer the bill back to the committee it had passed out of only this morning with a recommendation to pass by for the year. In doing this they bowed to the inevitable and to the political calculus surrounding Governor McDonnell’s bid to be Mitt Romney’s VP. Thousands of Virginians stood up and made their voices heard over the last few weeks and in doing so they made it impossible for the state GOP and the Governor to proceed without doing even more damage to what remained of their national reputation and his chances at national office. Below is APV’s statement on the bill. There are still many more bills lurking in the General Assembly that we will continue to fight, but we and the many other individuals and organizations that fought against HB1 still have something to celebrate. WE DID THIS. And we can do more.

What’s in a name?

For decades our friends on the right have been railing against “activist” judges who interpret the law as they see fit, and yet the GOP controlled House of Delegates and State Senate are in the process of passing some of the most sweeping and open-ended language in recent memory; language, almost guaranteed to end up being parsed and interpreted in unforeseen ways in the courts of the Commonwealth. House Bill 1, the so-called personhood bill, passed the House of Delegates earlier this month by a healthy margin and is now awaiting debate in Committee on the Senate side, but it’s only now starting to get the scrutiny that it deserves and the more people see of it, the more they don’t like it. HB 1 requires that all the laws of the Commonwealth be interpreted to grant fertilized eggs the same rights, privileges, and immunities, as people from the moment of conception on. In doing so it opens a potential Pandora’s Box for confusion and litigation. The bill’s sponsor, anti-choice zealot Delegate Robert Marshall of Prince William, says the bill is only meant to establish a civil cause of action for wrongful death of a fetus stemming from harm to a pregnant woman, but Marshall’s record and his refusal to amend the bill to clarify the many ambiguities the language raises, tends to belie this claim. Instead the bill, which is similar to language introduced and subsequently rejected in other states threatens to outlaw all abortions in the state de facto and make most forms of birth control including the IUD and the Pill illegal if current Supreme Court precedent is ever overturned and it raises serious concerns about the legality of common procedures surrounding in-vitro fertilization. A harsh but not inconceivable reading of the law could be interpreted to require women who miscarry to report the “death” to the local authorities, who, one would assume would have to decide whether or not to investigate if the “death” was spontaneous and of natural causes or was in fact an act of murder. Such silliness we are told would never happen, but the same people who say this are the ones forever warning us of the overreach of government and the chaos caused by radical, “activist” judges bent on making law from the bench. In this case I am rather inclined to take their warnings seriously.
HB1 is a sloppy piece of lawmaking that in a few terse sentences changes the meaning of the legal term person, which appears almost 25,000 times in the Virginia code to include “unborn children” which it defines as existing from the instant of conception. The bill tries to allay some of our many reasonable fears; it acknowledges that Roe and Griswold are the law of the land… for now, and in Sections 6 and 7 it address some other obvious concerns:

§ 6. Nothing in this section shall be interpreted as creating a cause of action against a woman for indirectly harming her unborn child by failing to properly care for herself or by failing to follow any particular program of prenatal care.
§ 7. Nothing in this section shall be interpreted as affecting lawful assisted conception.

Fair enough, a woman who drinks and smokes during her pregnancy or doesn’t stay on her diet can’t go to jail for murder if the pregnancy ends abruptly… but what about a woman who takes birth control? Remember conception happens outside the womb, the fertilized egg then implants (or not) in the womb. Most hormonal birth control prevents the fertilized egg from sticking to the uterine wall. By preventing this, the woman on birth control is “directly” intervening to prevent a pregnancy from continuing. The same could go for IUDs that create an inhospitable environment for the new “person” in the womb. It’s unclear, to say the least if using many of the most common and safe forms of contraception could be seen as a crime by an overzealous judge. Believe me after Citizen’s United, we Progressives have ample evidence of what damage a runaway court can do, and again don’t tell me prosecutors won’t bring these cases or judges will throw them out. Sure there won’t be many, at first, in the sense that birth control might be illegal and women and their doctors may have to seek contraception outside the law and would thus have to hide their actions, so there may be less murder and more smuggling cases. Who knows. We’re going into uncharted territory. What happens the first time or the fiftieth time that an aggrieved husband claims his estranged wife killed their child with birth control she bought in gasp, Maryland? The party that rails against nuisance lawsuits when they target corporations is all for opening up some of the most intimate decisions a woman or a couple can make to the tender ministration of the Courts. So this is what they mean by small government and tort reform.
And, what about section 7? What happens to all the “people” that routinely get produced as byproducts of fertility treatments? Doctors often implant numerous fertilized eggs, sometimes this results in large numbers of embryos in the womb. Can the mother look forward to a government official being part of any decision she and her family might make about reducing that number? What about freezing embryos, do the fertilized eggs get a legal guardian? Can the couple be charged with child neglect if they fail to pay for the lab work? Is it legal to freeze a person without their consent? What would be the impact on stem cell research? Would a doctor who performs a risky procedure like amniocentesis that results in an unintended abortion be liable for involuntary manslaughter? None of this is addressed in the legislation and to think such cases won’t come up is absurd.
This bill along with the raft of other anti-choice bills that have made this session one of the worst in recent memory for women’s rights is part of an overall plan to make abortion and birth control effectively unavailable for women in Virginia. Similar language has failed in public referendums in Colorado and that liberal bastion Mississippi. If put to a popular vote here, I am confident the people of the Commonwealth would reject it out of hand, but the radicals and partisans in the GA and the Governor’s office would like to push this through by mean force. In doing so they are also opening a gaping breach in the law that judges and lawyers and magistrates across Virginia will be asked to plug piecemeal. It’s time to let them know that that is as bad an idea as conferring personhood on a bundle of undifferentiated cells in the first place. On behalf of the Board of Directors of the Alliance for Progressive Values I urge the legislators and the Governor to stop and consider the many unforeseen ramifications of this dangerous bill. Please say NO to HB1.

Scott Price APV Public Policy Director

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How to kill a regulation without killing it. Reason 9,999 to Occupy Wall Street ~by Jack Johnson

The idea was simple. Create a clear rule, a ‘bright line’, that bans financial institutions from trading publicly protected and subsidized funds. That means Banks, like Bank of America, which is FDIC insured, would not be allowed to reap ridiculous profits (or huge losses) by trading on their funds: funds that are guaranteed by the Federal Reserve, that is, backed by little ole tax payers you and me.

The reason for the rule is equally simple: History. During the bad old days that led up to the Great Depression, no such firewall existed and banks were notoriously over leveraged. According to the Library of Congress, “After the Great Depression, Congress examined the mixing of the “commercial” and “investment” banking industries that occurred in the 1920s. Hearings revealed conflicts of interest and fraud in some banking institutions’ securities activities. A formidable barrier to the mixing of these activities was then set up by the Glass–Steagall Act.” The Glass Steagall act was an attempt to save capitalism from its own excesses. One of the principle things the act did was introduce the separation of the bank types according to their business (commercial and investment banking). It also founded the Federal Deposit Insurance Corporation (FDIC) for insuring bank deposits.

The repeal of provisions of the Glass–Steagall Act by the Gramm–Leach–Bliley Act in 1999 effectively removed the separation that previously existed between investment banking which issued securities and commercial banks which made money through deposits. The deregulation also removed conflict-of-interest rules that had prevented investment bankers from serving as officers of commercial banks. It was the repeal of these prohibitions that contributed to the 2007-2008 economic meltdown in the U.S. allowing main street depositors’ money to flow into risky investments and exotic financial instruments like Credit Default Swaps (CDS) that confused even some of the top experts in the country. Some of these investments –like Credit Default Swaps– were nothing more than insurance policies written as financial instruments. In other words, bets that a particular investment would or wouldn’t fail, and payouts occurring if they failed; all of this outside the scope of traditional commercial financial or insurance regulation.

On January 21, 2010, President Barack Obama proposed bank regulations similar to some parts of Glass–Steagall in limiting the trading and investment capabilities of commercial (deposit) banks. This proposal was signed into law as the Dodd-Frank Act. The Volcker Rule, named after Paul A. Volcker, the former chairman of the Federal Reserve, was a small, but essential part of the act. It was meant to ban financial institutions that are protected and subsidized by the federal government (FDIC insured) from trading for their own account. That is: Traders shouldn’t speculate for their own personal gain using the money you and I pay in taxes. After the Dodd-Frank Act containing the Volcker Rule was passed, the SEC and banking regulators were required to actually implement Sections 619 and 620 through regulations of the Dodd-Frank Act (containing the Volcker Rule).

Well, the SEC/banking regulators have proposed their regulations for implementing the Volcker Rule and it is being universally panned as a bloated monstrosity, a disaster. According to Jesse Eisinger over at Pro Publica, “bank lobbyists with complicit regulators and legislators took a simple concept [the Volcker Rule] and bloated it into a 530-page monstrosity of hopeless complexity and vagueness. They couldn’t kill the rule. Instead, they are getting Congress and regulators to render it morbidly obese and bedridden. Of course, that’s no accident. The biggest banks, which are in business today only because taxpayers bailed them out, want to protect their valuable franchises.”

Paul Volcker

Now whenever a federal agency proposes a substantive new regulation, by law it is required to seek public comment first. Normally the only parties that respond to agency comment requests are the companies that are affected by the regulations, and their attorneys (i.e. lawyers at the investment banks, in this case). As you might guess, their comments are always critical of regulation. But this time things are different. The Volcker Rule’s implementation was so egregiously awful that our friends at Occupy Wall Street took notice. A small subset of the Occupy folks have rechristened themselves, Occupy The SEC. They have written a 325 page comment to the SEC’s bloated implementation of the “Volcker Rule” that is as smart and sharp as anything you might expect from a Joseph Stiglitz or Paul Krugman. “it’s pretty clear, from reading the letter, that the people who wrote it are whip-smart and extremely talented.” Says Felix Salmon of Reuters, “its main authors are worth naming and celebrating: Akshat Tewary, Alexis Goldstein, Corley Miller, George Bailey, Caitlin Kline, Elizabeth Friedrich, and Eric Taylor.”

I haven’t read the entire 325 page letter yet, but what I have perused is impressive. I personally love how the Occupy SEC folks predicate the entire letter on the Volcker Rule with a footnote reference to their own declaration:

The first line of their letter reads: “The United States aspires to democracy, but no true democracy is attainable when the process is determined by economic power.” All the rest of their arguments, in some cases, incredibly detailed arguments, follow from this main premise: people come first. I’ll list a couple of tidbits that I thought worth savoring.

“Securities and Exchange Commission Chairman Mary Schapiro told the Financial Services Committee that, “[w]e have no interest in pursuing activity where people are intending to provide market-making and get it wrong.” The banking lobby was undoubtedly heartened by this frank admission of regulatory forbearance. Even so, the Securities and Exchange Commission (SEC) and the other Agencies are reminded that Section 619 requires strict compliance and imposes strict liability. Nowhere does the statute forgive “well-intentioned” breaches of the law.”

Indeed, why should ‘intentions’ enter into it? How often does a speeding motorists get to plead that they didn’t ‘intend’ to speed?

Here’s another noteworthy admonishment:

“The Proposed Rule also evinces a remarkable solicitude for the interests of banking corporations over those of investors, consumers, taxpayers and other human beings. In their Overview of the Proposed Rule, “the Agencies request comment on the potential impacts the proposed approach may have on banking entities and the businesses in which they engage,” but curiously fail to solicit comment on the potential impact on consumers, depositors, or taxpayers.… The Agencies seem to have lost sight of the fact that “interested persons” could include human beings, and not just banking corporations.”

Corporate banking interests are paramount for the SEC, superseding day to day human beings who must live and die because of the fallout /and or failure of such regulations.

Finally this lovely slap down, worthy of Karl Marx:

“The “invisible hand of the free market,” that darling cherub of neoliberal economics, will likely push much of the current proprietary trading into the folds of hedge funds or traditional investment banks, not eliminate them outright (assuming, of course, that such activities actually add productive value to the economy). The Volcker Rule simply removes the government’s all-too-visible hand from underneath the pampered haunches of banking conglomerates.”

Translation, if you want to trade risky financial instruments, have at it, but don’t expect US tax payers to bail you out. You can be a hedge fund or a traditional bank (foregoing financially insane instruments like CDSs), but you can’t be both.

You can read the full text of the comment letter here (pdf).

Here are the steps the Occupy SEC folks recommend should you wish to write your own letter:

Read the Congressional Record from July 15th, 2010 where Sens. Merkley and Levin describe the Volcker Rule. (pdf here)

Read the statutory text for the Volcker Rule (part of the Dodd-Frank Act) here.

Read the implementation of the statute, which is the Volcker Rule Text, all 500+ pages of it (don’t worry, it’s double-spaced, pdf) here.

To send in your comment letter, here are the directions for electronic or paper comment submissions. Good luck and keep us posted!

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As always, APV thanks our friend, activist and writer Jack Johnson for contributing his work to our blog.
DCKennedy

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