The Wall Street Journal is criticizing the Supreme Court's recent securities class action decision that refused to overrule 25 years of precedent because of the "mischief" of successful investor class actions, even though the Court adopted a compromise that the Journal had previously advocated for.
On June 23, the Supreme Court ruled in Halliburton v. Erica P. John Fund that investors who had been harmed by corporate fraud could continue to rely on the "fraud on the market" theory to pursue class action lawsuits. That theory, first outlined in Basic v. Levinson in 1988, recognizes that in a relatively efficient regulated market, publicly available information about a corporation will be reflected in its stock price, including fraudulent statements or disclosures made by corporate officers. "Fraud on the market" allows a subsequent lawsuit on the presumption that when making investment decisions, shareholders are relying on the assurance that the stock price is not distorted by a corporation's fraud.
As the Journal knew, Halliburton had the potential to gut this well-established precedent for investor class actions, which allow institutional investors -- like union pension funds -- to protect their investments from fraud, because it would be nearly impossible to litigate individualized reliance on the fraudulent information before buying or selling stock. Often, these misrepresentations are buried in thousands of pages of financial disclosure documents, but nevertheless are incorporated into and impact the overall price of a company's stock. Rather than accept Halliburton's invitation to reject both its own case law and subsequent federal legislation that affirmed the "fraud on the market" theory, the Court instead adopted a version of a "midway compromise" discussed at oral arguments. The Court held that corporate defendants can now introduce studies at the class certification stage (before the class action commences) that show that the price of the stock was not affected by material misstatements made by corporate officers, evidence that has typically been evaluated later at trial.
But the Journal is upset at this turn of events -- even though it had previously lobbied the Court to "require some evidence of price movement resulting from a misstatement before a class is formed," because securities class action lawsuits are supposedly "economically destructive." The Journal is no great fan of class actions in any form, despite the fact they are often the most efficient and economical way for groups of injured people to access justice and obtain legal relief. In its coverage of Halliburton, the editorial board has parroted right-wing myths propagated by the U.S. Chamber of Commerce, calling class actions "frivolous" and not much more than a "windfall" for plaintiffs' lawyers.
For two years, the National Organization for Marriage (NOM) has been peddling the theory that the IRS intentionally leaked its donor list to a gay rights organization as part of an Obama administration conspiracy. Two separate investigations and a ruling by a Reagan-appointed judge have debunked that theory. But right-wing media, which have widely touted NOM's initial accusations, have largely ignored or denied the conspiracy theory's demise.
In the spring of 2012, an IRS employee inadvertently leaked an unredacted list of NOM's donors in response to a public records request. The pro-equality group Human Rights Campaign (HRC) got its hands on the list, highlighting past contributions to NOM by prominent conservatives like then-presidential candidate Mitt Romney.
Noting that key HRC officials were prominent supporters of President Obama's re-election campaign, NOM alleged a conspiracy between the organization and the Obama administration aimed at embarrassing NOM and its supporters.
In April 2012, NOM filed a formal letter of complaint to the IRS. Conservative outlets like The Daily Caller and The Weekly Standard touted the complaint, focusing particularly on the revelation that Romney was one of the group's donors. For most of the next year, however, media interest in the story was scant.
That changed in the spring of 2013. In May, U.S. Attorney General Eric holder ordered the FBI to begin a criminal probe into allegations that the agency had targeted tax-exempt conservative political groups. While the IRS actually scrutinized progressive groups more extensively than conservative ones, the IRS "scandal" became a rallying cry for right-wing media. The controversy also meant newfound interest in NOM's allegations against the agency.
Mainstream and conservative media outlets were quick to pick up on NOM's call for an investigation into the IRS's activities.
The Wall Street Journal 's James Taranto spotlighted NOM's claims in a column on the IRS controversy, asking "How pervasive is the Obama IRS scandal?":
As the current Supreme Court term winds down, a number of highly anticipated cases will be released in the coming week. Here are five of the decisions right-wing media have repeatedly misinformed about, as well as the top myths and facts.
Right-wing media are criticizing the Obama administration for bringing Ahmed Abu Khattala, the alleged leader of the Benghazi attacks, to trial in a U.S. criminal court. But federal civilian courts have proven significantly more successful at convicting terrorists than military commissions, give terrorists tougher sentences, deprive terror suspects of the "honor" of being considered enemy combatants, and do not prevent the gathering of intelligence.
The Wall Street Journal is celebrating a recent Supreme Court ruling that will allow an anti-choice activist group to challenge the constitutionality of an Ohio law that bans false statements in election campaigns, a state statute that is opposed by free speech advocates across the political spectrum. But the WSJ went on to erroneously argue that the false statement at issue in the case -- that the Affordable Care Act (ACA) funds abortions -- is actually true, because contraceptives are actually "abortifacients."
On June 16, the Supreme Court unanimously ruled that the group, Susan B. Anthony List, had standing to sue over the Ohio statute. Susan B. Anthony List, which is "dedicated to electing candidates and pursuing policies that will reduce and ultimately end abortion," ran into trouble when it tried to take out a billboard calling Ohio congressman Steve Driehaus' vote for the ACA a vote for "taxpayer funded abortion." Driehaus filed a complaint against Susan B. Anthony under the Ohio statute, but ultimately withdrew it after he lost his election. Nonetheless, the organization challenged the constitutionality of the false statement law, claiming that it violated their First Amendment rights.
The Court's decision did not address the merits of Susan B. Anthony's claim. But that didn't stop some right-wing media outlets from calling the ruling "a big win ... for the pro-life movement." The Wall Street Journal evidently agreed with this analysis and added that the decision is "a rebuke to politicians who don't want to be criticized" in a June 16 editorial. The WSJ went on to argue that the billboard at issue had been "vindicated" because the ACA forces "religious groups to finance abortifacents."
From the editorial:
Monday's decision concerned whether Susan B. Anthony was able to sue. The Sixth Circuit Court of Appeals had said it could not because Mr. Driehaus withdrew his complaint after he lost. But Justice Clarence Thomas wrote for the Court that this decision improperly minimized the burden on groups whose speech is chilled for fear that they could be sanctioned or sued. Lower courts will now revisit the constitutional challenge.
As it happens, Susan B. Anthony's billboard claim has been vindicated by the Obama Administration's rule forcing religious groups to finance abortifacients in their health-care policies for employees. In a democracy, voters rather than a priesthood of regulators are obliged to sort out the truth or falsity of political claims. Congrats to Susan B. Anthony, and perhaps the Sixth Circuit will seek out some remedial First Amendment education.
Business media have been spreading the myth that the Environmental Protection Agency's plan to rein in carbon pollution will harm the American manufacturing industry by increasing electricity prices. But a new report by a group of business leaders found that the manufacturing industry is at far greater economic risk from the extreme weather events that the EPA's clean power plan would help prevent.
When the EPA proposed standards for the carbon pollution driving climate change for existing power plants, several top U.S. business media outlets promoted claims that the rules would harm manufacturers. Reuters published two articles that uncritically repeated utility industry lobbyists' claims that the rules will "destroy jobs" at "manufacturing plants." The Wall Street Journal cited a steel industry spokesman that claimed the rules will "impede the post-recession growth of American manufacturing" without criticism, and the newspaper's editorial board suggested that the rules will "punish" regions that rely on manufacturing. Fox Business' Lou Dobbs Tonight hosted Steve Milloy, a policy director at coal giant Murray Energy, who lambasted the rules, stating: "if you work in manufacturing, do you want to see your job exported to China?"
However, an analysis by Business Forward -- an association of American business leaders focused on sound public policy -- found that extreme weather events will have severe economic impacts on the automotive manufacturing industry in the United States, while any increase in electricity prices as a result of turning to clean power will have minimal costs for the manufacturing industries. The analysis has not been covered* by the prominent business media outlets that promoted claims that the standards would harm manufacturers.
For example, automakers, who represent the nation's largest industrial sector, are extremely vulnerable to disruptions in the global supply chain caused by extreme weather events. The study found that extreme weather events -- many of which are happening more frequently -- can cause an auto assembly plant to shut down at immense costs of $1.25 million or more per hour. Business Forward explained that even when extreme weather events happen on the other side of the globe, they impact manufacturers:
Because supply chains are global, disruptions on the other side of the planet can slow down or shut down an American factory. For example, in October 2011, severe floods in Thailand affected more than 1,000 industrial facilities. Production by consumer electronics manufacturers in the U.S. dropped by one-third.
The carbon standards, by contrast, would cost the automotive industry far less because electricity is a "comparatively small portion" of their total costs. The report found that if electricity costs increased by 6.2 percent by 2020, it would add less than $7 to the cost of producing car that sells on average for $30,000. Overall, this would cost the average auto assembly plant about $1.1 million, or the equivalent of less than an hour of assembly line downtime at a single auto plant each year. The EPA estimates that electricity prices will increase slightly as a result of the standards, but efficiency improvements will lower electric bills by 2025.
A Wall Street Journal editorial dismissed the student loan relief plan outlined by President Obama as a distraction from the so-called Bowe Bergdahl "scandal," even though conservative media had previously declared Bergdahl's release a distraction from other alleged "scandals."
In a June 9 editorial, the Journal's editorial board attacked Obama's plan to extend income-contingent loan repayment options to all recipients of federal student loans. The Journal chided Obama's decision to extend through executive action reduced payment options to 5 million previously unqualified borrowers who had taken out loans before October 2007. The Journal also invoked myths that college loans are driving up attendance costs and represent taxpayer handouts to college graduates.
The Journal concluded its anti-loan relief tirade by claiming that the president's announcement, along with Sen. Elizabeth Warren's (D-Mass.) proposal to lower student loan interest rates, amount to little more than "attempts to change the subject" from alleged "scandals" and "government failures." From the editorial:
The Warren bill has no chance to pass the House, as Democrats know. The Warren bill and the Obama debt-forgiveness-by-fiat are attempts to change the subject from the cascading examples of government failure -- the VA scandal (see nearby), the Taliban prisoner swap, the rising cost of health insurance under ObamaCare. In the Obama era, government failure is never a failure. It's another political opportunity to call for more of the same.
The Journal's claim that proposals to relieve millions of student loan borrowers buried under more than $1 trillion in outstanding debt are a distraction from "the Taliban prisoner swap" is just the latest in a series of right-wing media outlets obsessing over the notion that each policy proposal or news development from the White House is a "distraction" from something else:
The Journal's decision to force the "distraction" talking point into the student loan debate proves that no news item is safe from being uncritically dismissed by right-wing media outlets bent on turning every issue into a political scandal.
Right-wing media are disappointed that the Supreme Court decided to rule narrowly in a domestic criminal case that nonetheless had big implications for the United States' standing in the global community, rejecting a conservative legal challenge to Congress' long-standing powers under the U.S. Constitution to enforce ratified international treaties.
The Supreme Court recently ruled in Bond v. United States, holding that federal prosecutors had overreached when they charged the defendant, Carol Anne Bond, with violating the Chemical Weapons Convention Implementation Act of 1988, a statute enacted by Congress to fulfill the international obligations of the United States. Local authorities in Bond's home state of Pennsylvania declined to prosecute her assault of her husband's mistress -- she had "spread harmful chemicals on [her] friend's car, mailbox and doorknob" -- because her activities didn't result in any injuries worse than a burnt thumb. Nevertheless, Bond was prosecuted in federal court for violating the international Convention on Chemical Weapons, a treaty that was ratified by the United States in 1997 and codified into federal law by Congress in 1998. Bond argued (in part) that her conviction should be overturned because Congress has no constitutional authority to enact legislation that would help implement ratified treaties like the Convention on Chemical Weapons. This extreme and ahistorical argument was concocted by the libertarian Cato Institute, and contradicts not only the Framers' clear intent to transcend the dysfunctional Articles of Confederation that hampered early America on the global stage, but also hundred-year-old precedent of the Supreme Court.
The Court ultimately avoided that result by reading the statute and reasonably concluding that Congress never intended a treaty guarding against the mass slaughter of modern warfare to be applied to what has been described as nothing more than a "sad soap opera" that nevertheless "caught the attention of a group of conservative lawyers, who saw in her shabby act of domestic vengeance a chance to further an agenda centuries in the making." Writing for the unanimous Court, Chief Justice John Roberts held that federal prosecutors should not have gone after Bond because federal law "does not cover the unremarkable local offense at issue here."
Right-wing media outlets like The Wall Street Journal and National Review Online were clearly upset that the Court refused to adopt the radical concurring opinions of conservative Justices Scalia, Thomas, and Alito. Scalia and Thomas, for their part, "uncritically embraced" the outlandish constitutional argument put forth by Cato that "Congress lacks any specific power to pass legislation necessary and proper to ensure that the United States abides by its treaty commitments."
Ta-Nehisi Coates' much-praised essay, "The Case for Reparations," that recently appeared in The Atlantic has given right-wing media a fresh opportunity to argue that the best way to address racially discriminatory laws or policies -- such as housing segregation -- is to never speak of them, let alone litigate them under civil rights law.
In Coates' essay, which ultimately calls for a congressional study on the long-term effects of the treatment of African-Americans in the United States, he explores the country's history of racism and oppression, from slavery to the Jim Crow laws to the present. Although right-wing media have been known to erroneously claim that racism is no longer a problem, the systemic effect of state and federal laws that favored whites and oppressed people of color is still felt today. As Coates explains, institutionalized oppression of black people was often sanctioned by the federal government, either through legislation that inadequately addressed racial discrimination or by agencies that propagated biased policies rooted in federal law. For example, agencies like the Fair Housing Administration often refused to insure mortgages in neighborhoods that they deemed unsuitable, perpetuating systematic housing segregation that in turn fueled other disparate racial impacts that continue today, such as separate and unequal schools. Despite the fact that redlining was outlawed in 1968 with the passage of the Fair Housing Act, the housing market is still hostile to black buyers and renters, even in neighborhoods that have taken steps to improve residential housing segregation.
Ultimately, Coates argues that the best way to even begin to evaluate how whether the government owes a debt for the generations of stolen wealth and opportunity it sanctioned would be to allow Rep. John Conyers' (D-MI) bill, HR 40, also known as the Commission to Study Reparations Proposals for African Americans Act, to proceed. The bill calls "for a congressional study of slavery and its lingering effects as well as recommendations for 'appropriate remedies.'" Conyers has introduced this bill -- which does not actually authorize the disbursement of any funds -- every year for the last 25 years, but it has never proceeded to the House floor. For Coates, HR 40 represents an opportunity to finally study the impact state-sanctioned discrimination has had and continues to have on black communities, and provide a vehicle for a "a serious discussion and debate ... we stand to discover much about ourselves in such a discussion."
But yet again, members of right-wing media have no interest in such a discussion.
The Environmental Protection Agency's forthcoming regulations on greenhouse gas emissions will provide legally required protection for the health and welfare of Americans at a cheap cost, while allowing states flexibility -- contrary to media fearmongering about the landmark standards.
The Wall Street Journal continued its crusade against clean air, calling on the Supreme Court to put an end to centuries-old state lawsuits that hold polluters accountable for the "smoke, dust, poisonous chemicals, and noxious odors" they dump on their neighbors, despite previously arguing for state-level solutions to air pollution.
The WSJ has a long history of blanket opposition to class action lawsuits, regardless of the merits of the case. It has called class actions nothing more than a "windfall" for plaintiffs lawyers despite the fact that such lawsuits are often the only avenue for legal redress for many consumers. Class actions are often the most effective tool to punish corporate plaintiffs whose behavior cause Americans injury or harm, yet the WSJ has falsely accused federal judges (like conservative Seventh Circuit Court of Appeals Judge Richard Posner) of not following and having "disdain for" Supreme Court precedent, just for allowing class action lawsuits to proceed.
In its most recent editorial on the subject, the WSJ complained that the Supreme Court should "polish off" a new series of class action lawsuits that seek relief for injury caused by air pollution or the physical effects of climate change caused by such pollution. Based on long-established state common law -- judge created doctrine as opposed to legislatively-enacted law -- that redresses personal injury caused by nuisance, trespass, or negligence, these suits allow landowners to bring civil claims against factories and power plants whose air pollution has negatively interfered with their property rights.
In 2011, the Court ruled that federal common law does not provide for civil nuisance claims seeking injunctions against polluters because the federal Clean Air Act (CAA) displaced such litigation, but the question of whether the CAA applies to state common law was explicitly left unanswered. Although the 2011 case sought a court order to stop pollution that caused global warming, other lawsuits based on the state version of common law only seek damages for the air pollution itself, regardless of its contribution to climate change. But the WSJ complained that allowing these more traditional class actions to go forward would "lead to a state-by-state chopped salad of pollution controls," even though it has previously argued that managing pollution should be largely left to the states rather than the federal government.
While mainstream media coverage of the serious allegations of improper practices at certain Department of Veterans Affairs (VA) health clinics has been extensive in recent weeks, a bill to expand health care for veterans that was blocked by Senate Republicans in February received little attention.
The Wall Street Journal downplayed a recent report that found the impacts of global warming are being felt in every region of the United States. The latest National Climate Assessment, which forecasted dire predictions for the nation's economy if global warming remains unchecked, was highlighted above the fold on the front page of every major U.S. newspaper except for the Journal.
The U.S. Global Change Research Program released its third National Climate Assessment (NCA) on the morning of May 6, focusing on how global warming will affect different regions of the United States and what can be done about it. The report received widespread attention, with most of the major newspapers devoting above the fold coverage to the NCA on May 7. But readers of the Wall Street Journal might have missed the story -- the paper devoted a mere factbox to the report on the lower half of the front page, under the "World-Wide" sidebar:
The WSJ instead chose to highlight on the front page: the conversion of office buildings into high-end apartments, the regulatory investigation into large banks' hiring practices in Asia, a Chinese internet company's plans to expand its share offerings to the U.S., early primary results that are favorable to the Republican Party, and the "chic" fashion of the current Afghan president whose "Fur Caps Set Standard." Though front page placement might be less relevant as newspapers are shifting to digital, it is still telling of the paper's judgment of which stories are important.
The Wall Street Journal article that did run fittingly highlighted the dire economic aspects of the National Climate Assessment: the report states that climate change is already costing our economy billions. But by burying it, far fewer people likely saw this warning.
Ever since Rupert Murdoch took over the Journal in 2007, there have been worries that the conservative tilt of the editorial page is spreading into its news division. Downplaying the NCA corresponds with how the Journal's editorial page has covered the issue in the past: as something that can be easily dismissed. In 2011, for instance, the Journal's U.S. print edition did not publish an op-ed by a former climate "skeptic" whose Koch family funded research re-confirmed rising global temperatures, choosing instead to run a highly misleading column disputing the temperature record. The Journal also printed the most climate-denying letters to the editor of the top newspapers in 2013, and has published op-eds with statements that run counter to science, including one that suggested that "humanitarians" should be "clamoring for more" carbon dioxide because it is a "boon to plant life." Furthermore, the paper's editorial board has been criticized by environmental journalists for misleading on climate science.
Here's how the top U.S. newspapers covered the story in their May 7 print editions (images retrieved via Newseum front pages):
The Wall Street Journal mischaracterized Supreme Court Justice Elena Kagan's dissent in the Greece, New York, public prayer case, accusing Kagan and the other liberal justices who dissented of "working hard to push religion to the sidelines of American public life." In fact, Kagan made clear in her dissent that the town should lose the case because it failed to adhere to religious diversity; as she noted, the town "never sought (except briefly when this suit was filed) to involve, accommodate, or in any way reach out to adherents of non-Christian religions."
On May 5, the Supreme Court ruled in Town of Greece v. Galloway that the prayer given before town meetings did not violate the Establishment Clause of the First Amendment. Kagan (joined by Justices Stephen Breyer, Ruth Bader Ginsburg, and Sonia Sotomayor) dissented, arguing that based on the facts of the case, a constitutional line had clearly been crossed -- the town had invited predominantly Christian clergy to the meetings to give explicitly Christian invocations.
As Kagan wrote in her dissent, "the Town of Greece should lose this case" because "the invocations given -- directly to those citizens -- were predominantly sectarian in content." The dissent went on to explain that the prayers before the town meetings in Greece went beyond what the majority opinion called "a benign acknowledgment of religion's role in society." In the dissent's view, it was not the prayer per se that crossed the constitutional line, but the fact that the prayers "repeatedly invoked a single religion's beliefs." Prayers included a discussion of "the saving sacrifice of Jesus Christ on the cross" and "the plan of redemption that is fulfilled in Jesus Christ."
But the facts didn't seem to matter to the WSJ editorial board, which argued that Kagan's dissent was tantamount to "limit[ing] God in the public square."
From the May 5 editorial:
The High Court had upheld legislative prayer as recently as 1983 in Marsh v. Chambers, so this case was really about whether the Justices were going to restrict that precedent and further limit God in the public square. That's precisely what the four liberal Justices would have done, led by Elena Kagan, who argued in her dissent that even allowing a rabbi or cleric to make a sectarian reference is divisive and constitutes a state endorsement of that religion. Joined by the three other liberals, she said any prayer must be generic and entirely nonsectarian.
The town of Greece used mostly Christian prayers because its citizens are predominantly Christian. Yet when rabbis and clerics of other faiths asked to give the prayer, they were welcome. Even a Wiccan priestess was allowed to issue what we suppose was an anti-prayer. Council members and visitors were under no obligation to pray along and there was no evidence of punishment or even disapproval for anyone who didn't.
While the decision is welcome, the close vote shows that public prayer hangs by a single vote at the High Court. The liberal Justices were more than happy to modify a precedent to further restrict even the most passing public reference to a sectarian God. Religion is in no danger of imposing itself on Americans, but a dominant secular legal culture is still working hard to push religion to the sidelines of American public life.
The WSJ's characterization of Kagan's dissent in Town of Greece missed her point entirely.
The Wall Street Journal published an error-riddled piece claiming that increasing the federal minimum wage would force more Americans to rely on social safety-net programs when in fact the exact opposite is true.
In a May 5 opinion piece, New York lawyer John H. Heyer argued the minimum wage is a "scam." He then claimed increasing wages will force businesses to lay off employees and, in turn, swell the ranks of federal social safety-net programs, which Heyer refers to as the government "dole." From the Journal:
So the minimum wage, like so many government programs, is really a scam that never gets busted. Isn't that how these programs grow? There are always a few vocal supporters of any program and a lot of silent victims who mostly don't even know what effect the programs have on the public at large and the economy as a whole.
Minimum-wage laws raise business costs and increase unemployment. But they also require bureaucrats--who make a lot more than minimum wage--to administer the dole and regulate wages. So what's not for politicians to like?
Opponents of livable wages frequently claim that the minimum wage drives up unemployment, often citing the Congressional Budget Office's (CBO) most recent report on proposals to increase the federal minimum wage. The CBO report does project that total employment could decrease by between "very slight[ly]" and 1 million by the end of 2016, but that conclusion flies in the face of the overwhelming majority of economic evidence.
A February 2013 study by the Center for Economic and Policy Research (CEPR) reviewed nearly a decade of research on the minimum wage and concluded that "the minimum wage has little or no discernible effect on the employment prospects of low-wage workers." The Economic Policy Institute (EPI) similarly reviewed the available literature on the minimum wage and concluded that "raising the federal minimum wage to $10.10 will not lead to job loss." Conservative media jumped on a March 2014 survey by Express Employment Professionals claiming that businesses would cut jobs due to an increased wage, but even that survey found that 62 percent of minimum wage employers and 81 percent of all employers would not lay off workers as a result of increased wages.
Heyer's claim that increasing the minimum wage hurts the job market is arguable, but the claim that higher wages drive up reliance on federal safety-net programs is demonstrably false. The same CBO report that estimated 500,000 lost jobs from a $10.10 minimum wage also concluded that such a wage would lift 900,000 Americans out of poverty while boosting incomes for Americans living in poverty by $5 billion annually.
Increasing the minimum wage would definitively decrease America's reliance on the so-called government "dole." According to a March 2014 study by the Center for American Progress (CAP), a $10.10 minimum wage would decrease food stamp participation by up to $4.6 billion annually. An October 2013 study by the UC Berkeley Labor Center concluded that low wages in the fast food industry alone -- whose media wage is substantially lower than $10.10 -- cost taxpayers nearly $7 billion annually.
Contrary to Heyer' s allegation, increasing the minimum wage would significantly decrease reliance on "the dole," and significantly decrease the cost to taxpayers who subsidize the poverty wages paid by thousands of businesses around the country. A Media Matters analysis of broadcast evening news found that programs on ABC, CBS, NBC, and PBS largely ignored the high cost of low wages. The latest screed in The Wall Street Journal is not just ignoring the high cost of low wages; it is distorting the relationship entirely.