This story on NPR is why I teach Law and Theology (occasionally). Our ideas and beliefs, whether implicit or explicit, about the nature of God's judgement and grace impact our ideas about human behavior and markets, and therefore about law.

Medicare is not sustainable, due to spiraling health care costs. Republicans successfully bashed Democrats last fall over the cost control measures in the Affordable Care Act (or "Obamacare," if you prefer); Democrats are successfully bashing Republicans right now over the voucher approach in the Ryan budget proposal. Neither is particularly responsible, in my view, nor unexpected. I defer to Professor Huhn on the details of these approaches. But today I saw something that helped me think about the problem. It was this entry in Ezra Klein's column. It turns out that we're spending $3 billion a year on a common and popular surgical procedure that provides no benefit over a placebo. Should Medicare pay for it? Should your insurance company? If not, would that be rationing?

Democrats tend to prefer regulatory solutions–thus ACA includes a panel of experts to assess the efficiency of various medical treatments and make recommendations. If you fear regulation, you suspect that this panel will eventually abuse its power, leading to rationing.

Republicans tend to prefer market solutions–thus the Ryan plan vouchers would turn Medicare patients into consumers of insurance who would bear more of their own costs and therefore would monitor the effectiveness of procedures themselves, or else be wasting their own money.

Of course, market forces are what we have now, in the non-Medicare sector, and they don't seem to be working, for a variety of reasons. Instead, costs (and therefore premiums) continue to rise, leading to more and more consumers going uninsured. This is a different kind of rationing, but it is rationing nonetheless.

I'm not dogmatic on these issues, although I am probably more skeptical of the magic of markets than many. I just wish we could be having a discussion rather than a holy war.

In the aftermath of Hurricane Katrina, there were reports of widespread looting in New Orleans, and in the debate about the justification for looting, arguments tend to revolve around whether the behavior in question is perceived as exploitive criminality, for which a law enforcement crackdown would be in order, or foraging for necessities in extreme circumstances, for which sympathy would be a more appropriate response. As such judgments can be subjective, mis-categorization can occur.

In the ongoing tsunami/earthquake/nuclear power catastrophe in Japan, commentators have begun to discuss the apparent lack of looting behavior.  Most attribute this to Japanese cultural values and norms. In one discussion thread on the Daily Dish, one reader reported the following:

My Japanese wife has been glued to the TV since Thursday.

All of her extended family is in Tokyo. She called her father and sister, imploring them to stock up on food, sundries, water, batteries, plastic wrap, and duct tape in anticipation of the Fukushima nuclear power plant failing and releasing tons of radiation into the atmosphere.  In addition, the chance of a major aftershock in Tokyo is quite high, so they should be prepared.

Her sister's response: That would be selfish.  If they hoarded, others would go without.

Can you imagine a society in which the general, internalized cultural norm is self-sacrifice for the good of the larger society? I couldn't help being reminded of some of the current political debates in the United States. The fear of mild health care reform leading to socialist rationing seems quaint in comparison.

Yes, I know there are downsides to this kind of non-individualistic behavior. Less incentive for entrepreneurial creativity. Great psychological damage resulting from pressure to conform that can be oppressive. Even a certain political passivity that can make it easier for authoritarian central governments to come to power (see North Korea). As an Asian American, I'm aware of the dangers of mythologizing and essentializing Asian racial differences.

Still…we seem to be at the other extreme here. Left and right accuse each other of being greedy, of not being grateful for what we have, of not being willing to share sacrifice, and both are to some extents right. I fear that in similar circumstances, proud individualistic Americans would not fare as well. The rich would be hoarding and the poor would be looting.

In a larger sense, that's exactly what we are doing already.

     I felt that I counted for three at John Stewart's and Stephen Colbert's rally yesterday on the National Mall.

     They were there in force – tens if not hundreds of thousands of young people at a rally that attempted to imbue rationalism with a sense of fun.

     The participants were patient, friendly, and cheerful.  I waited an hour and half to purchase Metro tickets in a line that snaked all through the huge parking lot at Greenbelt Station.  There was no linecutting and no complaining.  One young lady and I went up and down the line getting "The Wave" started.  My "Fear the Roo" shirt was cheered by some Akron students.  The trains were cattle cars, but we mooed contentedly just to finally be underway to the rally.

     It was a Halloween parade, young adults dressed up as friendly fruit and animals (including a Big Banana and a Red Duck), Sesame Street characters (Cookie Monster and Elmo), Men in Black, cowboys, princesses, businessmen (though I suppose they might have been businessmen) and odd characters out of dreams.  They were decorative in other ways as well, draped over tree branches like icicles.

     The signs were ironic ("I hate intolerance"), self-referencing ("Conspiracy theories seem more persuasive if written in chalk on a blackboard" – written in chalk on a blackboard), and sometimes unintentionally self-defeating ("Restore Sanity – Legalize Pot").  It took me awhile to understand some of them (I initially thought "Down with Zippers" was a slam against the denizens of the University of Akron). 

     The leaders of the rally are a bit younger than I am and the music they provided dated from when they were young – Yusuf Islam (formerly Cat Stevens) and the O'Jays.  It was playful, joyful, and hopeful. 

     All in all, I came away with the feeling that, with young people like these, America is going to be just fine. 

     Here is coverage of the rally from Hope Yen of AP, Brian Montopoli at CBS News, Quinn Bowman and Sarah Sullivan at PBS, and FoxNews.  

     Why did I count for three?  Because I was about three times older than the average person there; my feet think that I walked about three times further than I should have; and, upon finally finding my youngest daughter near the stage, I was three times happier than any other person possibly could be.

This article in the New York Times (with graphics) tells how the polarization at the Supreme Court is reflected in clerkship hires. Conservative justices hire conservative clerks who previously clerked for conservative lower court judges. The same with liberal justices.  In Congress, too, moderate Republicans and Democrats are losing primaries to "true believers." Voters seem polarized as well. Are we really settling into a world in which we each believe we are simply at war with each other, each believing that we are fighting for good against evil opponents? When does reconciliation come back in style?

The University of Akron School of Law�s Joseph G. Miller and William C. Becker Center for Professional Responsibility will offer its inaugural Journalism and the Law Lecture titled �Covering the Roberts Court in the Obama Era: A Reporter�s Reflections.� The lecture will be given by Adam Liptak, Supreme Court Correspondent and columnist for The New York Times. The lecture, which is free and open to the public, will be held Tuesday, April 6  at 4 p.m. at The Quaker Square Inn at The University of Akron, 135 South Broadway, Akron, Ohio. One hour of free CLE credit will be offered.

In his presentation, Liptak will discuss the Supreme Court in a time of rapid change. After a decade without new justices in the final years of the Rehnquist Court, the Roberts Court has welcomed three new justices and it may well see a fourth appointment in the near future. Liptak will also consider the leadership of Chief Justice John G. Roberts Jr., the impact of Justice Sonia Sotomayor and the implications for the Court of the fact that it has become, given Democratic control of Congress and the Presidency, the most conservative of the three branches of government.

The lecture is offered free of charge, however registration is required. Click here to register.

The University of Akron School of Law�s Joseph G. Miller and William C. Becker Center for Professional Responsibility will offer its inaugural Journalism and the Law Lecture titled �Covering the Roberts Court in the Obama Era: A Reporter�s Reflections.� The lecture will be given by Adam Liptak, Supreme Court Correspondent and columnist for The New York Times. The lecture, which is free and open to the public, will be held Tuesday, April 6  at 4 p.m. at The Quaker Square Inn at The University of Akron, 135 South Broadway, Akron, Ohio. One hour of free CLE credit will be offered.

In his presentation, Liptak will discuss the Supreme Court in a time of rapid change. After a decade without new justices in the final years of the Rehnquist Court, the Roberts Court has welcomed three new justices and it may well see a fourth appointment in the near future. Liptak will also consider the leadership of Chief Justice John G. Roberts Jr., the impact of Justice Sonia Sotomayor and the implications for the Court of the fact that it has become, given Democratic control of Congress and the Presidency, the most conservative of the three branches of government.

The lecture is offered free of charge, however registration is required. Click here to register.

The fundamental premise of the Court's decision in Citizens United v. FEC is that a corporation should have the same First Amendment rights to engage in political speech as any citizen, because a corporation is simply an "association of citizens" in the "corporate form." I think this is going to lead to the politicization of everyday economic life.

The Court's reasoning that corporate speech is simply the collective speech of individual citizens does ring true for certain non-profit, ideologically-oriented corporations, especially when they are membership-driven. When the NRA or the Sierra Club takes members' dues and uses that money to speak on political issues, they in a rough way are simply amplifying the voices of their members, even if an individual member disagrees with one policy or another advocated by the group. That person can always quit.

BUT I don't think that most stockholders in for-profit corporations think that those corporations represent the stockholders' political views. We expect that corporation to be an economic actor, to be interested in making money, and to be generally agnostic with regard to political matters. They are the subjects of government regulation, not the makers of government regulation. Yes, we understand that our bank probably has a lobbyist that advocates a position with regard to banking regulation, but they aren't representing us in any but the most attenuated way. I suppose there's a sense in which we expect the bank to favor regulation that allows them to make money in the long run, but that could lead them to either support or oppose any particular proposal, depending on their political ideology, and I doubt that many people choose their bank based on its political ideology and attitude towards regulation.

So we tend to think of our market decisions and our political advocacy in different ways. We buy the best or the cheapest pizza without regard to whether the founder of the company and its top executives ardently oppose abortion.  We buy stocks of promising corporations without regard to whether its board of directors believes that global warming is a hoax.

This is of course a false barrier, and always has been. And it has already been breaking down. Recently several companies resigned from the Chamber of Commerce because of its strong political stance in opposition to legislation aimed at climate change. In the last election cycle there were websites rating companies as "blue' or "red" based on the proportion of employee contributions given to one party or the other. Readers were encouraged to support those companies that reflected the readers' political allegiances.

SO NOW the Supreme Court has exposed the connection between our political and economic commitments, and cognitive dissonance is no longer sustainable. The Court is telling us that Wal-Mart's speech is our speech when it works to oppose fair pay rules. That the Teamsters' speech is our speech when it opposes trade agreements. That Citibank speaks for us when it fights against banking regulation.

I don't see how I can now avoid making political calculations with regard to my investments and purchases. No, I won't be able to be pure in my judgments, and yes my decisions surely will be incomplete and inconsistent.  But the Court's decision challenges those who disagree with certain aspects of free market ideology to step out of it. It tells us that our corporate associations are not only economic but political. It's on.

There was an interesting article in the Wall Street Journal recently about the economist Arthur Cecil Pigou (1837-1959).  The article describes Mr. Pigou as an economist �whose intellectual legacy is being rediscovered, and, unlike those of Messrs. Keynes and Friedman, it enjoys bipartisan appeal.�  This bipartisan appeal may be a reflection of the fact that Mr. Pigou�s appreciation of markets was apparently tempered by a recognition of their limitations:

[W]hile Mr. Pigou believed capitalism works tolerably most of the time, he also demonstrated how, on occasion, it malfunctions.  His key insight was that actions in one part of the economy can have unintended consequences in others.

But what really caught my eye was the following quote from Milton Friedman:

The great advances of civilization, whether in architecture or painting, in science or in literature, in industry or agriculture, have never come from centralized government.

Now, I am not sure this statement is factually correct even if you believe that it is possible to neatly divide humanity�s creations into those arising from centralized government and those arising from the private sector.  For example (and at the risk of setting off a flurry of Al Gore jokes), I believe the defense department is generally credited with creating the internet.

But what I�m really interested in is this idea that one can in fact neatly separate centralized government and the private sector.  And this is where the Buddha comes in.  Buddhism, as I understand it, includes a belief that �all existences are not discrete and separate but are interdependent.�

Another way of putting this in the current context would be to ask whether a creation that arises at a time when centralized government exists could have arisen but for the presence of that centralized government.  If all things are interdependent, the answer is �no�.

Interestingly, it seems this is a realization modern science is coming to as well:

In nineteenth-century science the relationship between various elements of the world was understood in purely mechanical terms. The causal relationship described by classical physics implied a discreteness between objects. The Cartesian scheme of the world as a movement of innumerable but logical cogs was clean and simple: "cog it out, here goes a sum" (304.31). The subatomic experiments of quantum physics, however, indicated that the discreteness is only superficial and that ultimately all matter is united in a profound way that simple causal relationships do not suggest.

(For a somewhat interesting and related movie experience, check out Mindwalk.)

All this comes full circle in a very interesting way in the light of our recent financial crisis.  Arguably, our failure to recognize the interconnectedness of the various players in our markets was part of the problem.  Conversely, a greater appreciation of the interconnectedness of all things might lead us to adopt regulation limiting the ability of entities to get "too big to fail" or for keeping better track of the various financial derivative dominoes.

This is what I wrote a while back in my paper "Finding State Action When Corporations Govern" (last revised April 15, 2009):

This Article argues that corporations have for some time been increasingly taking on roles as pseudo-governmental actors without incurring the accountability to the people generally associated with state action.  This is happening via �new governance,� and while the recent financial crisis may suggest that the problems associated with new governance are waning, the reality is that the corporate consolidations likely to follow in the wake of the downturn . . . will result in even more powerful corporate actors with an even greater ability to govern.

This is what David Cho wrote in The Washington Post this past Friday:

The crisis may be turning out very well for many of the behemoths that dominate U.S. finance.  A series of federally arranged mergers safely landed troubled banks on the decks of more stable firms.  And it allowed the survivors to emerge from the turmoil with strengthened market positions . . . .  [N]o consequence of the crisis alarms top regulators more than having banks that were already too big to fail grow even larger and more interconnected.

Stay tuned.

Yesterday, the Obama administration unveiled its most recent proposals for financial regulatory reform, calling for "A New Foundation."  The proposals break down into five key objectives: (1) "Promote robust supervision and regulation of financial firms," including creation of a new "Financial Services Oversight Council of financial regulators to identify emerging systemic risks and improve interagency cooperation" and increased regulation of hedge funds; (2) "Establish comprehensive supervision of financial markets," including "[c]omprehensive regulation of all over-the-counter derivatives"; (3) "Protect consumers and investors from financial abuse," including creation of a new Consumer Financial Protection Agency and requiring public companies to "implement 'say on pay' rules, which require [non-binding] shareholder votes on executive compensation packages"; (4) "Provide the government with the tools it needs to manage financial crises," including increased governmental power to take over failing firms posing significant systemic risk; and (5) "Raise international regulatory standards and improve international cooperation."  As should be expected, early reactions span a wide spectrum.

Simon Johnson complains that the proposals don't go far enough.  He identifies the key issue underlying the recent financial crisis as being the existence of entities that had gotten "too big to fail."  But as far as addressing this issue, the new proposals provide "little reason to be encouraged."

The reform process appears to be have been captured at an early stage – by design the lobbyists were let into the executive branch's working, so we don't even get to have a transparent debate or to hear specious arguments about why we really need big banks. . . . In order to get to the point where you can reform like FDR, you first have to break the political power of the big banks, and that requires substantially reducing their economic power – the moment calls more for Teddy Roosevelt-type trustbusting, and it appears that is exactly what we will not get.

Meanwhile, Lawrence Cunningham describes the proposals as "exquisitely moderate and modest"–a "prudently simple set of ideas."  Finally, Larry Ribstein seems to lean to the other end of the spectrum in suggesting the proposals go too far, though he adds a most important qualifier:

First, we have to keep in mind that this isn't really a legislative package, but a kind of starting gun to let the intense lobbying begin. It will be interesting to compare the proposal to the sausage that emerges at the other end of the grinder.

My own initial take is that the majority of the proposals seem sensible, at least in theory.  Of course, the devil is in the details.  Ultimately, I agree with Prof. Ribstein that it is still too soon to tell how these proposals will fare.  Stay tuned.

Not a lot of analysis here, just a personal reflection. In the fall of 1990 I was fresh out of law school and had been Counsel to the Senate Judiciary Committee, Subcommittee on the Constitution, for less than a year.

My boss was the very authentic, old-fashioned, country liberal from Illinois, Senator Paul Simon. As a partisan, I was deeply suspicious of the nomination from the first President Bush. I had worked on the Dukakis campaign and I'm sure I held a grudge. In my memory, the White House was giving conservatives all kinds of signals that they could trust Souter, and I remember thinking that there must have been some kind of private assurances given that Souter was more conservative than he could be shown to be, especially on the subject of abortion/choice.

One exchange from the confirmation hearings I remember in particular. Senator Howard Metzenbaum of Ohio was pressing Souter hard on the abortion issue, and Souter delivered a response that had clearly been prepared very carefully. He told a story about a friend in college who had found herself pregnant, and who had come to Souter for advice. So he paints this picture that shows great empathy for the circumstances his friend was in, but the bottom line was, of course, what advice did he give?

And Souter says, something like (I'm sure someone can find this in the transcript): "Senator, I'm not going to reveal what we said, and I'm sure you will respect the privacy of that conversation."

It looked to me at the time like a huge dodge. And it worked! Metzenbaum was nonplussed, which was not an easy thing to do, and we couldn't gain any additional traction on the issue. I was a callow 28-year-old, and I was sure he had just made the whole thing up to feign sympathy for women.

Of course, we all know how things ended up. It was conservatives and pro-lifers who felt betrayed, and liberals and pro-choicers who were pleasantly surprised. Souter's story was a calculated hedge that worked in both directions. I still don't know if it was true.

Ever since the U.S. government starting taking ownership stakes in businesses as part of its response to the current financial crisis, people have been expressing concern about the possible negative consequences of "active" government ownership.  This concern was expressed again this week, with the prospect of the government becoming an 80% owner of GM.  Questions about "conflicts of interest" were prevalent:

The Obama administration has said it isn't interested in running an auto company, but with that big of a stake, some analysts say the government would probably be tempted to push its own policies on such issues as alternative fuel vehicles and unions.

But the opinion of some that the proper role of government in a case such as this is to act as a source of capital and nothing more is just that–an opinion.

The government is always an active player in private enterprise.  The fact that our government often chooses to defer to the free market is an active policy decision, subject to change should circumstances warrant.  The belief: "That government is best which governs least" does not express some sort of inviolable natural law.

So, will the government have free rein to exercise its ownership power to pursue "selfish" interests (such as protecting the environment) beyond short-term stock price maximization?  As a controlling shareholder, it is subject to certain duties.  Professors Iman Anabtawi and Lynn Stout point out that, while

[C]ourts have held that majority shareholders, like corporate officers and directors, owe a fiduciary duty of loyalty to minority shareholders that precludes them from using their positions as controlling shareholders to extract material economic benefits from the firm at the minority's expense. . . . [S]hareholder fiduciary duties are commonly understood to exist … principally in the contexts of freezeouts and closely-held companies.

However, it shouldn't take much to cobble together a sufficiently reasonable argument that producing fuel-efficient cars is good for business so as to withstand a challenge based upon fiduciary duty.  And the ultimate decision on matters such as these will rest with the board of directors, which is subject to its own set of duties to act in the best interests of the corporation and the shareholders as a whole.  Furthermore, as a matter of principle, I have no real problem with the government advancing its "selfish" interest as a shareholder to the extent the law allows.  After all, wasn't it the management of all those avowed profit-maximizers that brought the company to its knees hat in hand before the government?  If there's a less "offensive" source of capital out there dying to invest in your car company, you are certainly free to take their money instead.

The Group of 20 summit of world leaders is underway, and our new president is facing some challenges from his European allies on how best to deal with the economic crisis.  German Chancellor Angela Merkel and French President Nicolas Sarkozy presented a unified front that wants more than just stimulus funding.  In presenting this challenge, President Sarkozy raised a concern that regulation is just an "empty word" in the United States:

"We do not want results that have no impact in practice," said Ms. Merkel. "Germany and France will speak with one and the same voice," Mr. Sarkozy added, citing an on-and-off political alliance that has previously pitted the two countries against the U.S. or the U.K. over Europe's direction. "As the chancellor rightly said, we demand results," he said. "Regulation is not simply a word, an empty word… It is a major objective."

With all the talk of increased regulation coming out of Washington, why would these European leaders express this kind of concern?

Could it have something to do with the perception that our government, even in this time of crisis, remains in the pocket of Wall Street?  For the opinion of someone with real expertise in this area we might seek out a former chief economist of the IMF.  Here's what one is saying (hat tip to Kristina Melomed, a student in my Corporations class, for this link):

The crash has laid bare many unpleasant truths about the United States.  One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government�a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises.  If the IMF�s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform.

Matt Taibbi, over at (WARNING: explicit language at the link) Rolling Stone Magazine (that bastion of legal analysis) takes a bit more conspiratorial tone:

The reality is that the worldwide economic meltdown and the bailout that followed were together a kind of revolution, a coup d'état. They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations.

What's the saying?  Just because you're paranoid, doesn't mean they're not out to get you.

Even Eliot Spitzer (yes, that Eliot Spitzer) is chiming in:

Does it strike you as odd that the American government has invested $115 billion in TARP money alone in Citibank, JPMorgan Chase, and Bank of America, fully 70 percent of their market cap ($164.5 billion, as of March 30), yet we have virtually no say in the management or behavior of these banks? Does it seem even odder that these banks are getting along extremely well with the government regulators who should be picking them apart for having destroyed the economy and financial system?

What does all this add up to?  Perhaps simply that some may be forgiven for wondering whether all our rhetoric of regulation will have substance.

(WARNING: shameless self-promotion to follow.)

I have argued elsewhere that one part of the solution to this problem of capture may be to turn it on its head:  When corporate actors capture government, treat the corporate actors as state actors.

In researching the blogosphere for material for today's post, I came across a post quoting former SEC Chief Accountant Lynn Turner that I thought might be of interest.  What stood out to me was Turner's defense of our current regulatory system at a time when bashing it seems to be all the rage.  He argues that it is not the system that is the problem, but rather the fact that it "had been almost entirely dismantled by Congress and the various Administrations" over the past two decades.  Some of the dismantling he points to includes:

1. Passed Gramm-Leach-Bliley guaranteeing large financial supermarkets that can only be too big to fail, while prohibiting the SEC from being able to require regulation of investment bank holding companies.  When legislation was passed saying one could put all these businesses under one roof, without a single word in the law requiring regulation of the inherent conflicts, it was sealed in stone that there would be huge institutions the government would HAVE to bail out if they failed.  And this legislation was specifically passed to permit the merger of CitiBank and Travelers to form CitiGroup, now one of the largest institutions requiring a bailout. . . .

3. As new products such as credit derivatives were created and introduced to the credit markets, Congress and the Administrations took action to ensure those products could not be regulated.  Companies such as Enron and AIG used the law to avoid regulation of these products.  And history now has another chapter on how these products became financial weapons of mass destruction.

4. As hedge and private equity funds grew exponentially in the past two decades, Congress again exempted them from any regulatory oversight, even as they took in increasing amounts of retail money. . . .

7. The credit rating agencies were granted exemption from accountability by the investing public it turns out they were misleading as well as by the securities regulators.  Yet it was mandated that their ratings be used.  To this day, the SEC must judge the work of these credit rating agencies by the policies and procedures the rating agencies themselves decide are sufficient, even if the rating results in a bad rating.  That is quite simply still the law today.

It's not often one sees the blame due the "free" market laid out so starkly.  Certainly these are points we should reflect upon as we consider adopting an entirely new regulatory regime.  And it looks like the current administration is taking note.

The entire post is here.

The evidence

Yes, it's the Associated Press v. Shepard Fairey. Turns out that the famous poster by artist Shepard Fairey (is that a great name or what?) was confessedly based on a photograph by freelance photographer Mannie Garcia.  The AP is claiming that the poster violates their copyright in the photo.

AP made the headlines by making the claim without actually filing a lawsuit. Now Fairey has sued AP preemptively, trying to get a court to determine that his use and alteration of the photo came under the "fair use" exception to the general prohibition on copying protected work. Predictably, at least some photographers think the poster definitely infringes the photographer's rights. Others think the poster is sufficiently different from the photo to make it a fair use. Various opinions here and here.

Of course, the whole claim is premised on AP owning the rights to the photo, which many have assumed is true. However, now it seems that the photographer is claiming he owns the rights, not AP. Stay tuned…

Here is the portion of President Obama's inauguration speech most obviously relevant to business law:

Nor is the question before us whether the market is a force for good or ill.  Its power to generate wealth and expand freedom is unmatched, but this crisis has reminded us that without a watchful eye, the market can spin out of control — and that a nation cannot prosper long when it favors only the prosperous.  The success of our economy has always depended not just on the size of our gross domestic product, but on the reach of our prosperity; on our ability to extend opportunity to every willing heart — not out of charity, but because it is the surest route to our common good.

However, I was more intrigued by a portion of the speech that preceded this, wherein President Obama referenced "the ideals of our forebearers" and the necessity to remain "true to our founding documents":

Forty-four Americans have now taken the presidential oath. The words have been spoken during rising tides of prosperity and the still waters of peace. Yet, every so often, the oath is taken amidst gathering clouds and raging storms. At these moments, America has carried on not simply because of the skill or vision of those in high office, but because We the People have remained faithful to the ideals of our forebearers, and true to our founding documents.

How do these ideals and documents relate to the burning questions of corporate law and corporate governance that we face today?  Not wanting to miss an opportunity to plug a scholarly project of mine, I thought the following excerpt from my current research project, "Finding State Action When Corporations Govern," might provide some food for thought:

"While James Madison located the threat of abuse of government power in the majority of the community, today he might well express the same concern vis-à-vis the corporation:"

Wherever the real power in a Government lies, there is the danger of oppression.  In our Governments the real power lies in the majority of the Community, and the invasion of private rights is chiefly to be apprehended, not from acts of Government contrary to the sense of its constituents, but from acts in which the Government is the mere instrument of the major number of the Constituents.  This is a truth of great importance, but not yet sufficiently attended to . . . . (5 Writings of James Madison 272 (Hunt ed. 1904).)

Many will argue that whatever the ability of corporations to influence government and act as the modern equivalent of Madison's feared "factions" may have been, the current financial crisis has sapped any power they may have had to unduly influence our government.  But I believe that the current financial crisis will lead to consolidation, rather than mitigation, of corporate power.  And, when the government makes its inevitable exit from the "bailout ownership" of these private entities, we will be left with corporate actors more powerful than ever.  How Madison's "republican remedy" will deal with these factions — in some ways perhaps more powerful than any he ever envisioned — will be interesting to watch.  Perhaps we are seeing one small part of the answer in one of President Obama's first acts in office, slowing down the revolving door between government and lobbyists.

This past Tuesday, a student approached me before class and thanked me for my military service.  I have to admit I was caught a bit off guard by the gesture, but I was also quite touched.  It led me to reconsider my planned post for the week (I was going to write about taxes –  aren't you glad I reconsidered?).  Instead, I've decided to take a moment to comment on a subject that touches on my status both as a U.S. Army veteran and current business law professor — the military industrial complex.

The phrase "military industrial complex" is most often associated with the farewell address of former President Dwight D. ("Ike") Eisenhower, wherein he warned:

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex.  The potential for the disastrous rise of misplaced power exists and will persist.  We must never let the weight of this combination [of our national military and private industry] endanger our liberties or democratic processes.  We should take nothing for granted.

Today, I'm sure the phrase "military industrial complex" conjures up another three words for at least some of you: Cheney, Halliburton & Iraq.  Whatever your opinion about the possible conflicts of interest arising out of that threesome, concern about the influence of private corporate interests on government — particularly the war-making function of government — should not be a partisan issue.

In the past few years, books such as Paul Verkuil's, Outsourcing Sovereignty: Why Privatization of Government Functions Threatens Democracy and What We Can Do about It, and Peter Singer's, Corporate Warriors: The Rise of the Privatized Military Industry, have sought to refocus our attention on the issue.

Certainly, the law will be a key battleground for trying to balance the various interests at stake here.  Personally, I find myself fascinated by the role of our conception of the corporation as a "person" with free speech rights that make anyone challenging their right to freely petition/influence government appear downright un-American.

Finally, I am proud to be a veteran.  And, I am proud of the men and women who make up our armed forces and who serve with dedication at often great personal cost.  But I also heed Ike's admonition that:

Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.

A friend of mine is fond of saying that we are always at crossroads, faced with choices about which direction we will take from here that will impact the rest of our lives.  Last night, President-elect Obama echoed those sentiments when he said:

[E]ven as we celebrate tonight, we know the challenges that tomorrow will bring are the greatest of our lifetime — two wars, a planet in peril, the worst financial crisis in a century.  Even as we stand here tonight, we know there are brave Americans waking up in the deserts of Iraq and the mountains of Afghanistan to risk their lives for us.  There are mothers and fathers who will lie awake after their children fall asleep and wonder how they'll make the mortgage, or pay their doctor's bills, or save enough for college.  There is new energy to harness and new jobs to be created; new schools to build and threats to meet and alliances to repair.

The road ahead will be long.  Our climb will be steep.  We may not get there in one year or even one term, but America — I have never been more hopeful than I am tonight that we will get there. I promise you — we as a people will get there.

In the face of all that, the impact of an Obama presidency on business law may seem a bit mundane.  But, for those of you who just can't get enough of the topic, here's what's floating around out there this Wednesday morning:

Over at "The Race to the Bottom" they note that:

First, Barak Obama has indicated sympathy with some of the issues promoted by shareholders.  He has introduced a bill on Say on Pay in the Senate….

Second, Obama will get to appoint a new chairman of the SEC….

Third, Obama will appoint a new Secretary of the Treasury.

Professor Ribstein points out that, "Big business thinks it can control the feds, but that's less clear than ever with powerful forces lined up in favor of a bigger federal role."

Meanwhile, The Wall Street Journal stays true to its mantra that with every significant event someone makes money and someone loses money, asserting that:

Among the potential losers from big Democratic gains in Washington are banks, private-equity funds and Big Oil.  Congress has vowed to undertake a complete restructuring of financial-services-industry regulation, potentially creating a financial "super-regulator."

But really, we'll have plenty of time to pick regulatory winners and losers.  Right now I just want to breathe in the fresh scent of change.  And so, I leave you with a few more words from President-elect Obama:

So let us summon a new spirit of patriotism; of service and responsibility where each of us resolves to pitch in and work harder and look after not only ourselves, but each other.  Let us remember that if this financial crisis taught us anything, it's that we cannot have a thriving Wall Street while Main Street suffers — in this country, we rise or fall as one nation; as one people.

….

This is our moment.  This is our time — to put our people back to work and open doors of opportunity for our kids; to restore prosperity and promote the cause of peace; to reclaim the American Dream and reaffirm that fundamental truth — that out of many, we are one; that while we breathe, we hope, and where we are met with cynicism, and doubt, and those who tell us that we can't, we will respond with that timeless creed that sums up the spirit of a people:

Yes We Can.  Thank you, God bless you, and may God Bless the United States of America.

Hail to the Chief!

I, for one, don't think an Obama administration would be that much different than a McCain administration on gun-control issues.  Both candidates have come out in support of closing the gun-show loophole in the Brady Law background-check requirement.  McCain is against assault-weapons regulation, but most people know that the 1994-2004 assault-weapons ban didn't do much but change the way a few weapons were configured (in order to get around the simplistic express definitions of the ban).  Most importantly, D.C. v. Heller (pdf) has been decided, so the most basic question — Is there an individual right to bear arms in self defense? — has been answered affirmatively.  As the Brady Campaign has opined, Heller, which takes the extreme positions of both sides of the gun-control debate off the table, should help clear some of the wedge politics that have marked the debate.  Whether there's much federal movement on gun control probably has more to do with 1) whether the Dems get a filibuster-proof majority in the Senate, and 2) whether the Dems really want to take on this relatively toxic issue.

But don't bother telling that to Dan Cooper.

Mr. Cooper, co-founder and president of Cooper Firearms of Montana, Inc., was asked by his board of directors to resign "after word that he supports Democratic presidential candidate Barack Obama led to calls on pro-gun Web sites to boycott the company�s products."  Mr. Cooper went along with the request in an attempt to help the company and its 40 employees avoid a backlash over his personal views.

So much for clearing some of the wedge politics…  Of course, people have every right to boycott.  By the same token, I suppose Obama supporters in the market for a beautiful long gun should consider making their next purchase from Cooper Firearms.  Maybe Biden could buy one to put in his gun safe next to those Beretta shotguns of his…

The passage of Issue 6 will not make it easier for Indian tribes to open casinos in Ohio. Tribes have significant hurdles to overcome in order to operate casinos in the state.  Opponents of Issue 6 are attempting to link it with Indian casinos, but the two issues are separate and distinct.  In order for voters to make an informed decision on November 4, it is necessary to dispel the myths about Issue 6 and its relation to Indian gaming. 

The "Vote No Casinos Committee" submitted to the Ohio Ballot Board arguments against Issue 6, stating that voting in favor of Issue 6 "will make Ohio a Class III gambling state, making it easier for Indian casinos to open."  This statement is wrong. 

First, the possibility of an Indian casino opening in any state, including Ohio, is dependent on a multitude of factors.  Perhaps the most important factor is the requirement under federal law that Indian gaming must be conducted on Indian lands. The Indian Gaming Regulatory Act (IGRA) – legislation passed by the U.S. Congress for the regulation and oversight of Indian gaming – defines Indian lands as lands within an Indian reservation, or lands title to which is held in trust by the U.S. for the benefit of an Indian tribe or individual.  At this time, no Indian reservations are in Ohio and no lands in Ohio are held in trust by the U.S. for the benefit of a tribe.  The likelihood of lands in Ohio being designated as Indian lands in the near future is remote.  Even if Ohioans vote in favor of Issue 6, it is not a vote to create Indian lands or usher in Indian casinos.  It is a vote concerning one, privately-owned casino.   

Second, Ohio has a state-run lottery and allows for pari-mutuel wagering on horse races.  Class III gaming includes lotteries and pari-mutuel wagering on horse races.  Thus, Ohio already conducts and authorizes at least two forms of Class III gaming within the state.  Furthermore, Ohio has authorized Class III gaming for many years, beginning in 1933 with the Ohio legislature's approval of pari-mutuel betting and again in the early 1970s when Ohioans voted to amend the state's constitution to allow for state-run lotteries.  The argument that voting for Issue 6 will make a Ohio a Class III gambling state is flawed since Ohio already authorizes Class III gaming. 

Finally, opponents of Issue 6 argue that a loophole in the language of the constitutional amendment may allow the proposed casino to be exempt from state taxes if an Indian casino is opened in Ohio.  The argument goes that casinos on Indian lands pay no state taxes, and Issue 6 provides that should another casino open in Ohio, the proposed casino's tax rate would be lowered from 30% of gross casino receipts to the lesser tax rate, 0%, of the Indian casino.  According to the media, casino proponents have conceded that this loophole exists and they are working to correct it.  However, the opponents' argument really plays into fears that Class III Indian gaming operations do not generate monetary benefits for the states.  In fact, for a Class III Indian gaming operation to open in Ohio, federal and Ohio laws require a compact between the state and the tribe.  In all likelihood, if Ohio were to negotiate a compact with an Indian tribe for Class III gaming, the state would take a share of the casino's revenues.  Thus, the state would be receiving a monetary benefit from the Indian casino. 

Whether a proponent or opponent of Issue 6, it is not about Indian gaming and its passage will not open the door for Indian casinos in Ohio.

So, National City is being bought by PNC.  Putting aside the jokes about Pittsburgh (PNC's home) extending its football dominance over Cleveland, there are a number of interesting points floating around about the deal:

Professor Oesterle, of the Moritz College of Law at The Ohio State University, notes that this acquisition (which is a "take-under"–with PNC paying less than market value) is tax-payer financed and raises serious questions about the federal government's role in deciding which institutions live or die in the drama that is Financial Crisis 2008.  (He also points out that by selling themselves to PNC, National City executives get to avoid having to deal with those nasty limits on compensation that come with partaking of the government dole.)

The Wall Street Journal today adds the news that PNC will also benefit from a very favorable tax treatment of  the deal.

My own take is that, while there has been much wailing and gnashing of teeth about "socialism," it is very much my expectation that this is the beginning of some serious consolidation in the financial sector (and elsewhere); the government will cash out its stakes sooner rather than later; and, we will be left with more powerful corporate interests than ever before.  This power will then be used to "capture" whatever grand regulatory scheme rises out of the ashes of this crisis and, before we know it, we will be back to wondering how long it will be before corporations rule the world.

As a class project in my Election Law class, two of my students prepared a brief, nonpartisan "Elizabeth and Clarissa's Handy Dandy Summit County 2008 Election Guide." (I have changed their names to protect their anonymity.) They were dismayed to find how difficult it was to find information about various candidates and issues. They recommend such websites as Project Vote Smart, the League of Women Voters, the Summit County Board of Elections, and the Ohio Secretary of State. Their guide, with sources noted, is after the break.

The following is not a political advertisement, and nobody approved it.

Elizabeth and Clarissa's Handy Dandy Summit County 2008 Election Guide!

(Made in Association with Rock the Vote and Professor Lee's Election Law class)

Disclaimer: There are the issues according to our interpretation. All of our sources are listed. If you would like more information, you can look it up yourself. However, if you feel that we have blatantly misrepresented an issue or candidate . . . whine about it in your blog.

Happy voting!

Representatives

13^th District Court Congressional Representatives

David S. Potter

Bio:

• worked for Johnson and Johnson, Proctor and Gamble, and Cardiva Medical.

Issues:

• Supports Energy Independence – reducing our reliance on foreign oil, but using our own resources.
• Promotes exploration of alternative energy sources including nuclear power plants
• Will give tax breaks to companies using better energy sources.
• Increase efficiency of Medicare and Medicaid system, reducing government spending in these areas.
• Supports legislation to reduce illegal immigration and opposes any legislation that will offer more amnesty programs.
• Supports continuing the war on terrorism
• Supports increasing funding to intelligence agencies.
• Wants to widen I-71
• Implement Free Choice Flat Tax, Eliminate Death Tax and Capital Gains Tax
• Set single income tax rate at 17% for everyone. Information gathered at

Source: http://www.potterforcongress.com/issues.html

Betty Sutton

Bio:

• member of the House Rules Committee and the House Judiciary committee

Issues:

• Work toward keeping Oil prices down.
• Three part plan to revitalize the economy
  • Support Ethics regulations
  • Support Entreperneurial Innovation
  • Supports better education oppertunites

• Supports increasing veteran benefits.
• Dedicated to fighting corruption
• Would allow reimportation of drugs from Canada and other countries and supports legislation to set prices on prescription drugs.
• Supports protecting pension and retirement benefits, improving acess to health care and increasing the minimum wage.
• Supports legislation that would encourage small business.

Source:  http://www.bettysuttonforcongress.com/index.asp?Type=B_BASIC&SEC={7B4FF5BC-F1CD-4EA2-953C-67E866D3C429

14^th District Congressional Representative

Steven C. Latourette

Bio:

• Served Seven Terms in the House of Representatives
• Graduated from the Cleveland Marshall College of Law

Issues:

• Support legislation to prohibit the funding of abortion and would allow abortions if the mother's life is in jeapordy
• Supports decreasing Taxes
• Eliminate Inheritance taxes
• Supports constitutional amendment that would define marriage at between a man and a women
• Supports increasing funding to the war on drugs
• Supports strengthening environmental control standards
• Supports Oil Drilling in Alaska
• Opposes time lines in Iraq
• Supports legislation to provide healthcare to the uninsured
• Help support legislation to fix Ohio roads.

Source: Information found at http://votesmart.org/npat.php?can_id=21798

Bill O'Neill

Bio:

• Vietnam veteran
• Appellate judge until he ran for congress

Issues:

• Supports reducing the number of troops in Iraq and Increased veteran benefits
• Supports reducing imports from China until they meet labor and environmental regulations
• Supports expanding healthcare to all Americans and expanding Stem Cell research
• Opposes the No child Left behind act
• Supports increasing Pell Grants and Reducing Interest on Student loans.
• Supports reducing greenhouse gas emissions and clean energy standards.

Source: http://www.oneill08.com/homepage

David Macko

Issues:

• Never vote to institute a draft
• Never vote to increase taxes or regulations
• Promises to always support his constituents unless it violates the above principals

17^th District Congressional Representative

Duane v. Grassell

Bio:

• Math teacher

Issues:

• Supports balancing the budget and reducing the nations debt
• Supports imprisoning illegal immigrants living off welfare
• Opposes income tax
• Supports separating Medicare and Social Security from the general treasury, so that it can only pay out what goes into it
• Opposes funding for abortions and stem cell research
• Supports local government over federal government
• Opposes earmark legislation
• Opposes federal regulation of education – Supports State funded education
• Opposes any legislation that spends federal money to fight Global Warming
• Increase funding to the nation's intelligence agencies
• Supports reducing medical malpractice suits to drive down costs of healthcare

Source:  http://www.grassellforcongress.info/

Tim Ryan

Bio:

• Stuff

Issues:

• Supports eliminating public funding for abortions
• Supports increasing funding to public health services and universal healthcare
• Opposes the national missile defense program
• Supports campaign finance reform
• Supports measures to increase crime prevention and criminal rehabilitation
• Supports increasing funding to education programs
• Supports strengthening environmental regulations
• Supports improving the area through rivers, museums and amphitheaters

Source:  http://votesmart.org/npat.php?can_id=45638

28th District State Senator

James R. Carr

• No Information available

Thomas C. Sawyer

Bio:

• Ohio House of Representatives 1977-1983
• Mayor of Akron 1984-1986

Issues:

• Voted â��yes' on â��Gambling Restrictions' Bill in 2007
• Voted â��no' on â��Lethal Force Against Intruders' Bill in 2008
• Voted â��yes' on â��Short Term Loans' Bill in 2008

Source: http://www.votesmart.org

Attorney General

Richard Corday

Bio:

• State Treasurer since 2006
• Previously worked in Attorney General's office
• University of Chicago Law School
• Clerked for 2 U.S. Supreme Court Justices

Issues:

• Wants to "enforce legal standards at charter schools that receive state funds."
• Advocates for stricter disclosure laws for lending companies when giving loans to students to pay for college.
• Target on prosecuting online predators, scam artists who target the elderly, white collar criminals.

Source:  www.cordrayforohio.com

Mike Crites

Bio:

• Former United States Attorney
• Vietnam veteran
• Ohio Northern School of Law
• Experience as a federal, state, and local prosecutor

Issues:

• Streamline procedures for consumer complaints against companies.
• Expanding new criminal justice technologies to help law enforcement.
• Restore credibility to the AG's office.

Source: www.critesforohio.com

Robert M. Owens

Bio:

• County Prosecutor
• Clerked for U.S. District Court Judge
• Capital University Law School

Issues:

• Opposes "overreaching bureaucratic regulation being imposed by government agencies on small businesses and government managed free trade agreements which favor large corporations and special interests over small businesses and consumers."
• Make more AG's office activities available online for the public to review.
• Eliminate the "slush fund" system at the AG's office
• Expand law enforcement training of conceal and carry laws.
• Supports the choice of parents to home-school children.
• Enforce legal restrictions on abortion according to ORC §2919
• Reduce judge activism

Source: www.owens2008.com

Justice for the Ohio Supreme Court

Maureen O'Connor

Bio:

• Magistrate in Summit County 1985-1993
• Summit county Prosecutor 1995-1999
• Lieutenant Governor 1999-2003
• Ohio Supreme Court Justice since 2003
• Cleveland-Marshall College of Law

Judicial Philosophy:

• Interpret the law as written, not based on personal beliefs
• Importance of Separation of Powers

Source: www.oconnorforjustice.com

Joseph D. Russo

Bio:

• Cuyahoga County Common Please Court Judge, 2001-present
• Case Western Reserve School of Law

Judicial Philosophy:

• Restore philosophical and political balance to the Supreme Court.
• Reduce the influence of cash contributions to judicial elections.

Source: http://www.toledoblade.com/apps/pbcs.dll/article?AID=/20080928/NEWS09/809280322/-1/NEWS

Justice for the Ohio Supreme Court

Peter Sikora

Bio:

• Judge for the Cuyahoga County Court of Common Pleas
• President of the Ohio Association of Juvenile and Family court Judges
• Graduated from Case Western Reserve University of Law

Judicial philosophy/endorsements:

• Believes in protecting voter confidence by lessening favorable judicial decisions for large campaign contributors
• Supports increasing affordable legal help
• Recommended by the Ohio State Bar association
• Supports Scared Straight program for female offenders

Source: http://www.sikoraforjustice.com/About.html & http://www.lwvohio.org/pdf/LWVOEF%20Fall%202008%20Voter%20Guide.pdf

Evelyn Stratton

Bio:

• born to missionary parents in Bangkok Thailand
• Graduated from The Ohio State University College of Law

Judicial Philosophy/endorsements:

• Voted favorable to large campaign contributors 55%, and against 45%
• Encourages affordable legal help
• Led efforts to streamline appeals in adoption cases
• Helped form the Supreme Court of Ohio Advisory committee on Mental Illness – dedicated to mental health initiatives in the court system
• Won award for her leadership on behalf of abused and neglected children
• Supported by the Fraternal Order of Police of Ohio

Source: http://www.strattonforsupremecourt.com/?page=about_justice_stratton &             http://www.lwvohio.org/pdf/LWVOEF%20Fall%202008%20Voter%20Guide.pdf

9^th District Court of Appeals Judge

Eve Belfance

Bio:

• Member of the Akron Human Society
• Member of the League of Women voters
• Helped develop the Akron Court's DUI Court.

Judicial Goal:

• Interested in ensuring public safety, securing neighborhoods and families, and a fair judicial system.

Source:  http://judgebelfance.com/home.aspx

William Wellemeyer

Bio:

• Graduated from the University of Akron School of Law
• Currently the assistant prosecuting attorney for the Summit County Prosecutor

Issues:

• Supports an impartial and restrained judiciary
• Member of the NRA and Sons of the American Legion
• Endorsed my May Taylor, CPA, Ohio Auditor of State

Source: http://wellemeyerforjudge.com/_wsn/page2.html

Summit County Executive

Jim Laria

Bio:

• Clerk of Akron Municipal Court since 1997
• University of Akron graduate
• Bailiff for Judge Spicer 1979-1980

Source: www.electjimlaria.com

Russ Pry

Bio:

• Summit County Executive since 2007
• Kent State graduate
• University of Akron School of Law graduate

Issues:

• Job creation as #1 priority
• Open-door policy of interaction between political groups and public interest groups.
• Stressed importance on regionalism, economic development, tax incentives.

Source: www.russpry.com

State Issues

State Issue #1 : Change deadline for submitting signatures on initiatives from 90 days pre-election to 125 days pre-election.

Pro:

1) "ISSUE 1 PREVENTS WASTE OF TAXPAYER DOLLARS.

In 2007, taxpayers paid more than $300,000 to advertise information about a ballot issue that ultimately did not qualify for the ballot.  Additional expenditures were incurred by local boards of elections to verify signatures.  Issue 1 helps prevent this wasteful spending of taxpayer dollars from occurring in the future by establishing firm deadlines for the administration of state ballot issues and resolving legal challenges.

2) "ISSUE 1 HELPS MAINTAIN VOTER CONFIDENCE IN ELECTIONS.

Only statewide issues that qualify for voter consideration should be printed on the

ballot.  During the last two general elections, however, litigation had not concluded at

the time ballots had to be printed so voters considered issues that were ultimately not

counted.  Issue 1's new deadlines helps maintain voter confidence in elections by

preventing this waste from occurring.

3) "ISSUE 1 PROMOTES EFFICIENT AND EFFECTIVE ELECTIONS.

Issue 1 establishes clear timelines for filing and reviewing statewide issues petitions, and for filing legal challenges to those petitions.  This helps ensure smoother and more

efficient elections."

Source: Ohio State Representatives Jon Peterson and Dan Stewart, the group appointed by the Ohio General Assembly to prepare the argument for Issue 1

(http://www.sos.state.oh.us/SOS/Upload/ballotboard/2008/1ArgFor.pdf).

Con:

1) "Issue #1 creates delays in new laws taking effect.

The Constitution reserves to the People the power to propose laws, amendments to the

constitution, and to approve or reject laws passed by the legislature.  Issue #1 creates earlier filing deadlines which can cause a referendum petition to effectively delay for months the effective date of a law passed by the legislature.  This is because the deadline for filing a referendum petition depends on when the law being referred to the voters was passed by the legislature.  If the deadline to file the petition is after the new proposed deadline in the Constitution, the law referred by the petition won't be able to be on the ballot until the next election, which could be over a year away.

2) "The immediate effect of the filing of a referendum petition is to stop the law from going into effect until voters decide the issue at the ballot.  State Issue #1 gives people with the money to circulate petitions for hundreds of thousands of signatures increased power over the state legislature to delay laws passed from going into effect for months or even more than a year.

3) "Issue #1 means More Expensive State Issue Campaigns.

The delays caused by Issue #1 can be expensive.  Putting the issues off so long may mean that large amounts of money will have to be spent to get the attention of voters.  Millions of dollars are already being spent for issues that are fresh in the voters' minds.  More money is likely to be spent to inform voters when the issue is stale.  With these powers reserved to the People, this proposed amendment makes it even more expensive and difficult for ordinary citizens to undertake the efforts to speak through the state initiative and referendum process."

Source: Prepared by the Ohio Ballot Board in the absence of any submission in opposition, as required by Ohio Revised Code Section 3505.063(B)

(http://www.sos.state.oh.us/SOS/Upload/ballotboard/2008/1ArgAgainst.pdf).

State Issue #2: Borrow $400 million for environmental conservation, preservation, and revitalization purposes.

Pro:

1) Voting YES for Issue #2 l "protects clean water, creates jobs, conserves natural habitat, preserves family farms and does not raise taxes.

Source: Ohio State Representative Barbara Sears, Ohio State Senators Mark Wagoner and Sue Morano, the group appointed by the Ohio General Assembly to prepare the argument for Issue 2 (http://www.sos.state.oh.us/SOS/Upload/ballotboard/2008/2ArgFor.pdf).

Con:

1) "Issue #2 Would Authorize the Government to Spend More in Bond Money.

The economy is in bad condition. When times are hard, this is when we must tighten our belts and spend only what is necessary and only what we can cover with incoming revenues. Issue #2 authorizes the government to take out more debts to pay for environmental revitalization and conservation. While this may be worthwhile, the State of Ohio should not be going into further debt.

2) "Passing Issue #2 Means Taxpayers Will Have to Pay Back These Bonds.

Issue #2 authorizes $400 Million Dollars in debt to be used for conservation purposes.  You and your children will have to pay this money back.  This money could be retained by taxpayers for their own purposes or used for other plans and directly helping people in need."

Source: Prepared by the Ohio Ballot Board in the absence of any submission in opposition, as required by Ohio Revised Code Section 3505.063(B)

(http://www.sos.state.oh.us/SOS/Upload/ballotboard/2008/2ArgAgainst.pdf).

State Issue #3: Creates constitutional amendment protecting property rights along with the passage of the Great Lakes Water Compact.

Pro:

1) Voting �yes' on Issue #3 "protects the private property rights of Ohioans, safeguards

Ohio's natural resources, and maintains the stability of Ohio's jobs and economy by

recognizing and protecting property interests in ground water, lakes and watercourses."

Source: Ohio State Senators Timothy J. Grendell and Capri Cafaro, the group appointed

by the Ohio General Assembly to prepare the argument for Issue 3

(http://www.sos.state.oh.us/SOS/Upload/ballotboard/2008/3ArgFor.pdf).

Con:

1) "Issue #3 is an unnecessary addition to the Ohio Constitution. 

The Supreme Court of Ohio already determined that private property owners have rights to the ground water underlying their land and to the watercourse flowing on and through their land.

2) "Issue # 3 makes changes to the Constitution so specific that they mention legal doctrines that are not contained in the Constitution.

What if those legal doctrines change by court rulings? Parts of our Constitution would no longer be relevant. That is not appropriate for our Constitution, which is supposed to be the voice of the People.

3) "Issue #3 does not give an accurate picture of a private property owner's rights.

Property owners do not actually own the water beneath their land.  They have a right to a reasonable use of that water, but the state always has the power to regulate how it is used and take it for just compensation.  Issue #3 gives private property owners the false sense of security that their land cannot be taken away at a later date.

4) "We do not know what the future will hold.

We should not limit ourselves by passing this amendment.

Source: Prepared by the Ohio Ballot Board in the absence of any submission in opposition, as required by Ohio Revised Code Section 3505.063(B)

(http://www.sos.state.oh.us/SOS/Upload/ballotboard/2008/3ArgAgainst.pdf).

Issue 5: Referendum on legislation making changes to check cashing lending.

• Caps Interest rate payday lenders may charge at 28%.
• Limit borrowable amount to 25% of their monthly income, not to exceed $500.
• Limits barrowers to four loans per year.
• Minimum of 30 day period for barrower to pay back loan.

A YES vote will cap the annual interest for payday lenders only at 28%.

A NO vote will not put the issue into effect

Pros:

1) Lenders may currently charge up to 391% interest.

2) It breaks the "cycle of debt" many customers are trapped in.

3) Helps insure that customers only barrow what they can pay back.

Cons:

1) Payday lenders say they will be forced out of business by this law

2) Will take away access to emergency assistance loans that are cheaper  (if repaid on time) then overdraft fees

3) Limits barrower options. Each barrower has the right to choose the terms of their loans and what they do with their money.

Issue 6: Constitutional amendment to allow for a casino near Wilmington in southwest Ohio.

• Authorizes a privately owned casino in Clinton county that will be taxed 30% of its Gross Casino receipts.
• The tax allocation would be used to:
• Fund a gaming regulatory committee
• Up to 1% would be used to support programs for gambling addicts
• 10% of the tax would go to Clinton County. The remaining proceeds would be distributed to the remaining counties.
• Casino operator must make an initial investment of 600 Million dollars in a casino resort, including hotel and other amenities.
• Licensing fee caped at $15 million, which will be credited against the tax on the gross receipts.
• The state may not limit the amount of wages or hours of operation of the casino.
• If another casino enters Ohio, this Casino will pay the same tax rate as that casino.

A YES vote allows the Casino Amendment

A NO vote does not allow it.

Pros:

1) Keep competitive with the other 38 states that have casinos, instead of losing money to other states.

2) All counties in Ohio could receive some tax revenue from the casino.

3) Casino will create jobs and stimulate the economy with hotels, restaurant and other business.

Cons:

1) Will increase the number of Gambling addicts in Ohio and the allocated money for treatment of such problems may not be sufficient.

2) If an Indian Casino that is tax exempt enters Ohio, the casino may not pay at all.

3) Amendment reads more like a business contract with one Casino. It is not appropriate for a constitutional amendment.

Source: http://www.lwvohio.org/pdf/LWVOEF%20Fall%202008%20Voter%20Guide.pdf

Because what the world needs now is one more blogging head, starting today I will be posting here on business law related issues every Thursday.  Apparently, there has been something going on the last few weeks that a corporate and securities law professor might opine on.

As this is my first post, I thought I'd start with an overview of the current financial crisis.  This will be very much of a bird's eye view.  Since there has been non-stop coverage of this the past few weeks, I will mainly flag topics and provide links I think make for good further reading.  In the coming weeks, I plan to expand on several of the issues raised here.  Please, let me know what you want to hear more about.

This will also be a somewhat light-hearted overview.  This is not because I am insensitive to the seriousness of the current crisis, or the hardship it is causing, but rather because I believe we have all had enough wailing and gnashing of teeth to last us at least through October.  So, here are my 7 easy steps for getting into your very own financial crisis:

1.  Make a lot of bad loans. Call it a perfect storm, but when money is cheap, the government is pushing the American Dream of home ownership, real estate speculators are crying "the sky's the limit" on housing prices, and you've started making your money more on the securitization potential of loans than their credit worthiness-what's a lender do but say: "Credit check?  What credit check?  If the rates go up, we'll just refinance."

2.  Spread those loans around to others. "Securitization" is the process of pooling illiquid assets and selling interests in the anticipated returns from this pool.  But please note, pooling bad loans does not turn them into good loans.  For more on Steps 1 & 2 (and a look at Cleveland in the BBC News) go here.

3.  Have the bubble burst. Despite what some would have you believe, housing prices do not go in only one direction.

4.  Realize the well has run dry. Investors don't mind risk.  It's unknown risk they avoid.  A confluence of events made assets extremely hard to value and so cash stayed on the sidelines.  As one commentator described it in the context of AIG:

"Among its many products, AIG offered insurance on derivatives built on other derivatives built on mortgages.  It priced those according to computer models that no one person could have generated, not even the quantitative magicians who programmed them.  And when default rates and home prices moved in ways that no model had predicted, the whole pricing structure was thrown out of whack."

5.  Blame others. Actually, it might be even better if you get someone else like, say, John McCain, to do it for you.  Here's what the presidential candidate had to say about the SEC and those evil short-sellers:

"The primary regulator of Wall Street, the Securities and Exchange Commission kept in place trading rules that let speculators and hedge funds turn our markets into a casino . . . . They allowed naked short selling-which simply means that you can sell stock without ever owning it.  They eliminated last year the uptick rule that has protected investors for 70 years. Speculators pounded the shares of even good companies into the ground."

But, Professor Bainbridge (who sounds like he'll be voting for McCain) responds: "There's so much stupidity here, it's hard to know where to begin."

Short-sellers?  Deregulation and the repeal of Glass-Steagall?  Mark-to-market accounting?  Suffice it to say, there is plenty of blame to go around.

6.  Go on welfare. For a quick guide on how to ask for help for your multi-billion dollar enterprise when times get tough, go here.  Hey, it worked for Bear Stearns, Freddie and Fannie, and AIG.  And what's another $700,000,000,000 to taxpayers if we can really fix things and there's chance of an upside?

7.  Ponder the future. While you may have to make do with just your 2007 bonus, you can console yourself by pondering the myriad of looming questions.  Possible contenders for contemplation include:

• Is the bailout Constitutional?

• Do we need help like a "third world" country?

• What's the big deal about "moral hazard"?

• Will there be money left for anything else?

• Who exactly is this guy that we'll be writing a $700,000,000,000 check to?

• Has the choice for Secretary of the Treasury become the most important issue in the presidential race?

• What about the homeowners?

• Oh, and perhaps not too tangentially related to the preceding question-will you be doing jail time?

Till next we meet, here's to interesting times.

Ohio looks to be an important swing state (again!) in the upcoming Presidential elections. But you might not have realized that legal issues may determine the outcome. Efforts to settle these issues in advance seem to have failed. Here are a few of the battles currently being fought:

Five-Day Window: Republicans have sued to try to prevent voters from registering to vote (must be at least 30 days before the election) and then, on the same day, voting by absentee ballot (may be done up to 35 days before the election) during the 5-day window when they are eligible to do both. They claim to be concerned about vote fraud.

Vote Caging: Democrats are seeking to end the practice in some counties of eliminating or challenging the registration status of some voters based on mailed notices having been returned undelivered. They claim that typos, students away at college, and military personnel may have their votes unfairly taken away.

Meanwhile, in Cincinnati, voters who responded to an erroneous absentee ballot application mailed out by the McCain campaign may find their applications ruled invalid by Democratic Secretary of State Jennifer Brunner, although she has offered an easy way for voters to correct their applications. Pho has the statutory language.

Wouldn't it be nice if we could just focus on which candidates were supported by more people?