Saturday, December 12, 2009
Tuesday, October 06, 2009
October 6, 2009
Copyright © 2009 by William L. Fisher. All rights reserved.
The debate over healthcare reform continues to shift from one point to the other, and the Obama Administration continues to identify new enemies of healthcare reform on a daily basis. Lately, Obama and his followers have identified the insurance industry as the bad guy dejour. In fact, if you are listening closely, you will notice that the proponents of Obamcare have changed the name of their plan from “healthcare reform” to “health insurance reform.” The subtlety of this change has flown over the heads of most of America. But we should be paying attention, because this change lays bare the plan to nationalize health care on a level never seen in the US.
All of the talk about insurance plans being required to provide first day coverage without any limits for pre-existing conditions strikes a positive chord in the minds of most people. That sounds like a good idea. Other suggestions have come out about what should be required to be covered by these insurance policies. Some have merit, some are really bad ideas.
One such idea is the health insurance exchange. The idea is that people who are having a problem buying affordable health care insurance will be able to go to the health care exchange program and buy affordable health care insurance there by choosing the plan that fits their need and their pocketbook. The only problem with this idea is that it all depends on attracting health insurance companies who will place their policies in the exchange. What incentive is offered to attract these products? None! So, even if such a system is created by Obamacare, how will it function if the basic premise for its existence fails to materialize? The answer is it will not function, and those benefits that were going to be offered through the exchange will now have to be included in the government option part of Obamacare. Once the exchange becomes part of the public option, the overwhelming tendency then will be to just simply blend the exchange and the public option into one product, which will be government run.
But what is not being discussed in this debate is the monumental change in the regulation of insurance in America that will be required to accomplish any of these changes. At the present time, insurance companies are regulated by the states. Every state has a Department of Insurance, State Board of Insurance, State Insurance Commission, or some other official agency of state government that oversees the regulation of insurance companies within each state. State legislatures create the rules by which insurance companies are permitted to do business in their state. Insurance companies are required to be registered business entities in each state. Everything about an insurance company’s business is regulated by the state in which it does business.
In order for Obamacare to accomplish its goal of nationalizing health care, it is absolutely essential that the authority for regulating insurance companies be transferred from the states to the national government. The size of such an undertaking is mind boggling. And it cannot be done swiftly. It will take time to dismantle the state infrastructures of government that have regulated insurance every since there was insurance. The federal government has never regulated insurance, and the federal government doesn't know how to regulate insurance. It will have to learn. How long will that take, and how many mistakes will our federal government make along the way while it is learning?
Someone may object and point to Social Security or Medicare. Neither of these are insurance. Social Security is a government run retirement system that relies on current taxpayers paying benefits to current retirees. No actuarial science is used. The same for Medicare. Premiums do not pay for the Medicare benefits, taxes pay for those benefits. So, just like Social Security, Medicare beneficiaries have their benefits paid for by current taxpayers. No actuarial science is involved.
If we are to have the kind of healthcare reform being discussed today, the federal government will have to become the largest insurance company in history. They’ve done a lousy job of handling Medicare and Social Security, so why would Americans want to hand over the job of running the insurance industry.
Sunday, October 04, 2009
The court had three issues before it. One issue was Bp. Iker's side's request for a continuance on the faux diocese's motion for partial summary judgment. The court granted the continuance, which is normal, especially when such a motion is filed so early in the proecedings as to make discovery impossible before the hearing.
The second issue was Bp. Iker's side's request to broaden the playing field to include the individuals who allegedly hired Nelson and Wells to represent the faux diocese and who, themselves, claim to be the representatives of the faux dioocese. The court allowed these individuals to be brought into the suit to defend themselves. After all, these people sued Bp. Iker and the individuals who make up the Board of Trustees of the Corporation of the Episcopal Diocese of Fort Worth, so it is only fair that the individuals on the other side share in the fun. This is not a particularly surprising development, but it is one indication that Bp. Ikers' side has a very good lawyer.
Finally, Bp. Iker's side asked the court to revise its previous Rule 12 order which included the qualifier that Nelson and Wells did not represent the diocese or the corporation associated with Bp. Iker, which, of course, as they have responded, they never claimed to represent in the first place. The court refused to change it's order. However, this issue raises the most interesting questions of the three. If Nelson and Wells don't claim to represent the diocses and corporation associated with Bp. Iker, the ones established in 1983, and since there is at present only one such diocese and corporation, then, which diocese and corporation, pray tell, do they represent. Here lies the crux of the problem for their side, and, based on the transcripts of the hearings on the Rule 12 motion, the judge gets that they don't represent the one and only diocese. However, the judge, who is new to the bench, also understands that his ruling will be appealed and is being very careful. He will not be overruled for making the rulings he has made thus far, but he could have faced being overruled if he had ruled otherwise.
So far, Bp. Iker's side is looking pretty good.
Friday, October 02, 2009
Tuesday, July 21, 2009
Friday, June 19, 2009
This was said almost 50 years ago in 1961, but it is very much like what is going on now. Reagan was talking about what ultimately became medicare, and he was right about it being a foot in the door. In the middle to late 1960's, before and after my stint in the U.S. Army, I was a CPA in Houston, Texas. One of my jobs was conducting a medicare cost audit for a hospital in Houston. In order to do the audit, I had to become somewhat of an expert on medicare cost reimbursement rules and regulations. During the course of my audit, I came to the inescabable conclusion that medicare would cause the cost of health care to rise dramatically over the next 20 years. Under the initial medicare program, medicare paid the average price charged in a geographic area for medical procedures and treatment. It did not take a rocket scientist to figure out that if medicare paid the average price for everything it covered, the price of everything it paid for would have to go up. By paying the average price, medicare insured that the average would rise over time, and as the average rose, so would the upper brackets of charges rise. Thus the cost of medical care had to rise. This upward pressure applied through medicare fueled the flame of escalating costs for all medical care
Monday, May 04, 2009
Re: Diocese of San Joaquin v. Schofield, et al.,
Superior Court Case No. 08 CECG 01425
Hearing Date: May 5, 2009 (Dept. 97A)
Motion: Summary Adjudication
Tentative Ruling: To grant.
In ruling on a motion for summary judgment or summary adjudication, the court must "consider all of the evidence' and all of the 'inferences' reasonably drawn therefrom and must view such evidence and such inferences 'in the light most favorable to the opposing party." (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) In making this determination, courts usually follow a three prong analysis: identifying the issues as framed by the pleadings; determining whether the moving party has established facts negating the opposing party's claims and justifying judgment in the movant's favor; and determining whether the opposition demonstrates the existence of a triable issue of material fact. (Lease & Rental Management Corp. v. Arrowhead Central Credit Union (2005) 126 Cal.App.4th 1052, 1057-1058.)
The court's sole function on a motion for summary judgment is issue finding, not issue-determination. The court must determine from the evidence submitted whether there is a 'triable issue as to any material fact.' (Code Civ. Proc. § 437c(c); Zavala v. Arce (1997) 58 Cal.App.4th 915, 926.) "A plaintiff moving for summary adjudication of a cause of action must establish each element of the cause of action. … . If the moving party satisfies its initial burden, the burden shifts to the opposing party to set forth "specific facts showing that a triable issue of material fact exists. The court must view the evidence and reasonable inferences from the evidence in the light most favorable to the opposing party, as on a motion for summary judgment." (Syngenta Crop Protection, Inc. v. Helliker (2006) 138 Cal. App. 4th 1135, 1154-55.)
First Cause of Action for Declaratory Relief
The first cause of action for declaratory relief alleges, in relevant part:
101. Defendants take the position that defendant Schofield was authorized to revise the articles of "The Protestant Episcopal Bishop of San Joaquin, a corporation sole" in 2006 and 2008, and that defendant Schofield may continue as the incumbent of "The Protestant Episcopal Bishop of San Joaquin, a corporation sole" and as President of the Episcopal Foundation and the Investment Trust after leaving the Episcopal Church and being deposed.
102. Plaintiffs contend to the contrary, that the purported amendments to the articles of the corporation sole were ultra vires, invalid and void, and that defendant Schofield may not continue as the incumbent of "The Protestant Episcopal Bishop of San Joaquin, a corporation sole," or as President of the Episcopal Foundation or the Investment Trust, after leaving the Episcopal Church and being deposed.Secular courts, when resolving church property disputes, must not entangle themselves in disputes over church doctrine or infringe the free exercise of religion. (In re Episcopal Church Cases (2009) 45 Cal.4th 467, 478-479.) In In re Episcopal Church Cases (2009) 45 Cal.4th 467, the California Supreme Court held that we must apply the "neutral principles of law" approach to resolving church property disputes in a hierarchical church organization.
In doing so, "State courts must not decide questions of religious doctrine; the court must defer to the position of the highest ecclesiastical authority that has decided the point. But to the extent the court can resolve a property dispute without reference to church doctrine, it should apply neutral principles of law. The court should consider sources such as the deeds to the property in dispute, the local church’s articles of incorporation, the general church’s constitution, canon, and rules, and relevant statutes, including statutes specifically concerning religious property, such as Corporations Code section 9142." (In re Episcopal Church Cases, supra, 45 Cal.4th at p. 485.)
A hierarchical church is one in which individual churches are organized as a body with other churches having similar faith and doctrine, and with a common ruling convocation or ecclesiastical head vested with ultimate ecclesiastical authority over the individual congregations and members of the entire organized church. (New v. Kroeger (2009) 167 Cal.App.4th 800, 815.) In a hierarchical church, an individual local congregation that affiliates with the national church body becomes a member of a much larger and more important religious organization, under its government and control, and bound by its orders and judgments. In contrast, a congregational church is defined as one strictly independent of other ecclesiastical associations, and one that so far as church government is concerned, owes no fealty or obligation to any higher authority. (Id. at p. 816.)
Defendants dispute that the Episcopal Church is a hierarchical church, but both the California Supreme Court in In Re: Episcopal Church Cases and the appellate court in New v. Kroeger found it to be so. (In Re: Episcopal Church Cases, supra, 45 Cal.4th at p. 494; New v. Kroeger, supra, 167 Cal.App.4th 816- 817.) A review of the Constitution and Canons of the Church indicates that it is indeed hierarchical.
The Episcopal Church’s Constitution provides for the establishment of a General Convention composed of two houses, the House of Bishops and the House of Deputies, each with the right to originate and propose legislation. (Mullin Decl. Exhibit 1, Constitution of Episcopal Church Article I, Sec. 1.) Among the duties of the General Convention is the enactment and amendment of the Canons. (See Mullin Decl. Exhibit 1, Canons of Episcopal Church Title 1, Canon 1, sec. (2(n)(3), Title V, Canon 1, Sec.1.) The General Convention approves and consents to the admission of new dioceses and the election of new bishops. (Mullin Decl. Exhibit 1, Constitution of Episcopal Church Article II, Sec. 2, Article V, Sec. 1.) New dioceses must express "unqualified accession to the Constitution and Canons" before they can be in union with the general convention and admitted to the Episcopal Church. (Mullin Decl. Exhibit 1, Constitution of Episcopal Church Article V, Sec. 1.)
Defendant’s attempt to dispute the hierarchical nature of the Episcopal Church with the declaration of Rev. Wantland is unavailing. His declaration as to the nature of the Church is an inadmissible opinion on a legal conclusion. "[It] is thoroughly established that experts may not give opinions on matters which are essentially within the province of the court to decide." (Carter v. City of Los Angeles (1945) 67 Cal.App.2d 524, 528.)
Lamb is the Incumbent of the Corporation Sole
Corporations Code section 10002 provides: "A corporation sole may be formed under this part by the bishop, chief priest, presiding elder, or other presiding officer of any religious denomination, society, or church, for the purpose of administering and managing the affairs, property, and temporalities thereof." "Historically, a corporation sole consists of one person only and his successors, in some particular station, who are incorporated by law in order to give them legal capacities and advantages, particularly that of perpetuity, which in their natural persons they could not have." (Estate of Zabriskie (1979) 96 Cal.App.3d 571, 576-577.) Religious corporations are merely "permitted as a convenience to assist in the conduct of the temporalities of the church. Notwithstanding incorporation the ecclesiastical body is still all-important. The corporation is a subordinate factor in the life and purposes of the church proper." (Wheelock v. First Presb. Church (1897) 119 Cal. 477, 483.)
"The Protestant Episcopal Bishop of San Joaquin, a Corporation Sole" was created to hold title to property belonging to the Missionary District and, later, Diocese of San Joaquin. (UMF Nos. 23, 28, 34.) The Corporations initial articles stated that it was formed because "the rules and regulations of the Protestant Church in the Missionary District of San Joaquin … require that the bishop of said Missionary District shall become a corporation sole under the laws of the State of California by the title of The Protestant Episcopal Bishop of San Joaquin for the distraction of the temporalities thereof and the management of the state and property thereof." (UMF No. 23.) When the Missionary District became a Diocese, Cannon XVII (sections 411 and 412) continued to require the Bishop to be a corporation sole "by the title of ‘The Protestant Episcopal Bishop of San Joaquin, a Corporation Sole’ " and to hold title to "[t]rust funds and real estate acquired by gift or purchase for the use of the Diocese of San Joaquin, or for any unincorporated parish therein, or for the use of the Protestant Episcopal Church in any place within this Diocese where there is no organized congregation." (UMF No. 34.)
The documents are clear. Only the "Bishop" of the Diocese of San Joaquin has the right to the incumbency of the corporation originally entitled "The Protestant Episcopal Bishop of San Joaquin, a Corporation Sole" and given the number C0066488 by the Secretary of State. Moreover, the Episcopal Church has spoken as to who holds the position of Bishop of the Diocese of San Joaquin – Reverend Lamb. Defendants challenge Lamb’s election as Bishop on procedural grounds such as notice and quorum, but this court has no power to rule on the validity of the Episcopal Church’s election of its Bishops.
Both the United States Supreme Court and California courts have held that in the case of hierarchical religious entities the civil courts must accept as binding and defer to decisions by religious tribunals with respect to religious doctrine, practice, faith, ecclesiastical rule, discipline, custom, law, membership, polity, clergy credentials and discipline, as well as religious entity governance and administration.. (Jones v. Wolf (1979) 443 U.S. 595, 602, 603-604; Concord Christian Center v. Open Bible Standard Churches (2005) 132 Cal.App.4th 1396, 1411; Serbian Orthodox Diocese v. Milivojevich (1976) 426 U.S. 696, 708–709, 713; Presbyterian Church v. Hull Church (1969) 393 U.S. 440, 449; Rosicrucian Fellow. v. Rosicrucian Etc. Ch. (1952) 39 Cal.2d 121, 131–132.)
Accordingly since the Episcopal Church has seen fit to recognize Lamb as the new Bishop of the Diocese of San Joaquin, we must do so as well. (See UMF No. 66 -- Undisputed that Lamb has been asked to consent to the ordination of new bishops, performed baptisms and confirmations, attended the 2008 meeting of the house of bishops as the Bishop of San Joaquin and attended the 2008 Lambeth Conference of Bishops as the Bishop of San Joaquin.) Moreover, the Episcopal Church has deposed Schofield as Bishop. (UMF No. 55.)
Defendants contend that there was no proper notice of the March 29, 2008 special convention at which Lamb was elected. It is true that there is no competent evidence that 30 days notice of the meeting was given. Hall’s declaration only establishes that he received the notice on March 2, 2008. (Decl. Hall ¶ 20; Exhibit 9.) He did not mail the notice. It is undated. Defendants also contend that the deposition of Schofield was contrary to Church policy, procedure and law. However, we may not look into the prosperity of the election and deposition of church officers according to church regulations and rules. (Serbian Orthodox, supra, 426 U.S. at pp. 708-709; Maxwell v. Brougher (1950) 99 Cal.App.2d 824, 826; see Vukovich v. Radulovich (1991) 235 Cal.App.3d 281, 292–293]; Higgins v. Maher (1989) 210 Cal.App.3d 1168, 1173.)
Lamb is the President of the Episcopal Foundation and Investment Trust
Diocesan Canon XXVII, section 28.02 states that the "Bishop of the Diocese shall serve as President and Chairman of the Board" of the Episcopal Foundation. (UMF No. 35.)
The Investment Trust’s articles of incorporation provide that the Bishop of the Diocese of San Joaquin "shall be ex officio president of the Board of Trustees." (UMF No. 36.)
Therefore, Lamb holds both these offices.
The Amendment of the Articles of Incorporation in 2006 and 2008 Are Void
On March 21, 2006 Schofield filed amendments to the articles of incorporation that removed references that before a new bishop could be ordained, consent from the majority of Diocesan Bishops and Standing Committees of the Episcopal Church must be obtained and the bishop must be consecrated by three Episcopal bishops. (UMF No. 41.) This amendment was void because it violated the accession clause and was thus not in conformity with the "rules, regulations or laws" of the Episcopal Church. (See Corp. Code, § 10003.) Moreover, when amending the articles of incorporation of a corporation sole, the incumbent must "sign and verify a statement setting forth the provisions of the amendment and stating that it has been duly authorized by the religious organization governed by the corporation." (Corp. Code, § 10010.) Because the amendment was in direct contravention of the Constitution and Canons of the Episcopal Church at the time it was made, the accession clause prevented the Diocese from "duly authorizing" it.
The 2008 amendment changing the name of the corporation to "The Anglican Bishop of San Joaquin" is likewise void. The Diocese of San Joaquin had not "duly authorized" the name change when it occurred. The only purported authorization came about after Schofield was deposed as a Bishop and the Anglican defendants were no longer recognized by the Episcopal Church as the Diocese of San Joaquin.
The Diocese is Properly a Party Plaintiff
Defendants contend that the Diocese of San Joaquin, by which they mean the Anglican Diocese of San Joaquin, has not been joined as a party and judgment may not be had unless it is joined because the declaratory relief action seeks to invalidate its acts.
There are two problems with this line of reasoning. First, it ignores the fact that the Episcopal Church has, rightly or wrongly, procedurally correctly or not, recognized the organization headed by Lamb as the true and surviving Diocese of San Joaquin. (See UMF Nos. 55, 57-59, 66.) That Diocese is a party plaintiff.
Second, this is not a breach of contract action as defendants suggest in their memorandum of points and authorities. The Diocese is not being sued for breaching a contract with the Church. Although the rule regarding necessary parties is not relaxed in actions brought to obtain declaratory relief, the Diocese is not a necessary party. (See Lloyd v. County of Los Angeles (1940) 41 Cal.App.2d 808, 812.) No judgment or order against the Diocese directing them to pay or do anything is sought. Rather, Schofield is being sued for declaratory relief for his actions in amending the articles of incorporation of the corporation sole and in refusing to give up the incumbency of three corporations.
The Corporation Sole is a Party Plaintiff
Defendants claim that the corporation sole which is a party plaintiff is not the true corporation sole known as No. C0066488 which they claim to operate. Defendants are incorrect for the reasons expressed above. The Diocese of San Joaquin (plaintiffs) is not a new organization that "split off" from defendants’ older organization. It is the older organization from which defendants’ removed themselves.
Plaintiffs Have Standing to Sue
Defendants’ arguments that plaintiffs are not validly constituted as the Diocese and Bishop of the Diocese of San Joaquin, or indeed of any subpart of the Episcopal Church are poorly taken. The defendants have voted to leave an organization that held certain real property and no longer have any claim to it.
" 'Ultra vires' refers to an act which is beyond the powers conferred upon a corporation by its charter or by the laws of the state of incorporation . . . ." (Marsili v. Pacific Gas & Elec. Co. (1975) 51 Cal. App. 3d 313, 322.) Defendants argue that their right to amend their constitution and canons has always been unrestricted and unlimited. It is not. From the inception of the Diocese as a Missionary District, it acceded to the Constitution of the Protestant Episcopal Church in the United States of America and recognized the authority of the General Convention of the same. (Mullin Decl. Exhibit 7, Constitution of Missionary District of San Joaquin, Article II.) When the Missionary District Petitioned to become a Diocese in 1961, the petition clearly stated in conclusion, "As evidenced by the resolution of the Special Convocation above referred to, the Church in the Missionary District of San Joaquin has acceded to the Constitution and Canons for the Government of the Protestant Episcopal Church in the United States of America." (Mullin Decl. Exhibit 9, Petition and Memorial of Missionary District of San Joaquin.) The Constitution of the new Diocese of San Joaquin likewise acceded to the Constitution of the Episcopal Church and recognized the authority of the General Convention. (Mullin Decl. Exhibit 11, Constitution of Diocese of San Joaquin, Article II.)
Although defendants make much over the fact that the Diocese acceded only to the Constitution, and not the Canons of the Episcopal Church, the court finds that the Diocese implicitly acceded to both by virtue to acceding to the Constitution. The function of the Constitution is to form a legislative body, the General Convention. The General Convention adopted and amends the Canons. Acceding to the Constitution that creates the legislative body, and recognizing the authority of the legislative body, while simultaneously denying accession to the product of the legislative body is nonsensical. By analogy, a state could accede to the Constitution of the United States and claim that it did not accede to the federal law or the decisions of the United States Supreme Court. Moreover, the Petition for the Erection of the Diocese of San Joaquin mentions accession to both the Constitution and Canons. This strongly implies that it was always the intention of the Diocese to accede to both documents. (See In re Episcopal Church Cases, supra, 45 Cal.4th at pp. 488.) Finally, the Constitution of the Episcopal Church in place in 1961 required accession to both the Constitution and Canons. (Mullin Decl. Exhibit 8, Constitution of Episcopal Church, Article VI.)
Accordingly, the 2008 amendments to the Diocese’s Constitution purporting to strike the accession clause and insert new language relative to joining the Province of the Southern Cone were ultra vires and void.
The constitution of the Diocese has always permitted amendments. (AMF No. 69, Kamai Decl. Exhibits 4 and 7 Constitution of Diocese of San Joaquin, Article XIII.) Defendants contend that there was no legal impediment to their 2006 amendment qualifying the accession clause such that they acceded to the Episcopal Church’s Constitution only to the extent that it was not inconsistent with the Constitution and Canons of the Diocese, as amended from time to time and further this 2006 amendment allowed for the 2008 amendment deleting the accession clause entirely and withdrawing from the Episcopal Church. Defendants are incorrect. The original accession clause itself prevents such amendment. If the Constitution of the Diocese incorporates and accedes to the Constitution and Canons of the Episcopal Church, which require accession, then the Constitution of the Diocese cannot be amended to remove such language.
Defendants also attack the special meeting at which Lamb was elected Bishop, claiming that the calling of the special meeting was not in accordance with the Constitutions and canons of either the Episcopal Church or the Diocese of San Joaquin. Again, the Episcopal Church having seen fit to recognize Lamb as the true Bishop of the Diocese of San Joaquin, this court is without the power to countermand that decision. Defendants cite Singh v. Singh (2004) 114 Cal.App.4th 1264, 1283 for the proposition that a court has jurisdiction to review whether a religious corporation adhered to its own internal rules and bylaws. Singh is distinguishable. In that case an orally elected board of directors sued for judicial determination of the validity of their election or to order a new election and determine the rights of the members to vote, pursuant to Corporations Code section 9418, subdivision (c). The appellate court determined that the trial court, under neutral principles of law could validly interpret the bylaws of the corporation as it applied to the election of a board of directors and their term of office. It did not decide a matter of who was the ecclesiastical authority of the church.
Trust Beneficiaries Need Not Be Named or Noticed
Defendants claim that because this action is to remove Schofield from his position as incumbent of a corporation that holds property in trust for unincorporated missions and parishes, these beneficiaries are necessary parties and are required to be given notice of this action by virtue of Probate Code section 17203. Probate Code section 17203 applies only to proceedings under the probate code applicable to express trusts. The interest at stake here is incumbency in a corporation sole. The fact that the corporation sole holds property in trust does not mean that a petition for the removal of a trustee pursuant to Probate Code section 17200 has been filed.
Defendants claim that the motion must be denied because plaintiffs have failed to comply with Rule of Court 3.150 which requires that the specific cause of action must be stated specifically in the notice of motion and be repeated, verbatim in the separate statement of undisputed material facts. Specifically, plaintiff’s notice of motion and separate statement seek summary adjudication on "Count I" not the "First Cause of Action." This distinction is immaterial. As Weil and Brown note, that although few lawyers and judges use the term "count," the term may be used interchangeably with the phrase "cause of action." (Weil & Brown, Civil Procedure Before Trial (The Rutter Group 2008) "Pleadings" § 6:105-6:106.)
Defendants also take issue with the separate statement’s failure to place the supporting facts in the first column underneath the supported fact. (Rule of Court, Rule 3.1350, subdivision (d)) and failure to place all supporting evidence under one separate cover separately bound with a table of contents. (Rule of Court, Rule 3.1350, subdivision (g).) However, these minor technical violations did not impede the court’s review of the motion and are not grounds to deny the motion.
Defendants contend that because the first cause of action is broken into subparts seeking declaratory relief on several issues, each issue had to be separately identified in the separate statement of facts in support of summary judgment and the separate statement organized so that it could be determined which fact related to each issue. Code of Civil Procedure section 437c, subdivision (f)(1), provides: "A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages [as specified in Section 3294 of the Civil Code], or one or more issues of duty . . . . A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty." As such the cause of action for declaratory relief stands or fails as a whole and the plaintiffs were not required to break the separate statement into sub "issues" for adjudication, as this would have been improper.
Pursuant to California Rules of Court, rule 3.1312, subd. (a) and Code of Civil Procedure section 1019.5, subd. (a), no further written order is necessary. The minute order adopting this tentative ruling will serve as the order of the court and service by the clerk will constitute notice of the order.
Issued By: AMC on May 4, 2009 .
(Judge’s Initial) (Date)
Saturday, May 02, 2009
ATTACK OF AMERICAN FREE ENTERPRISE SYSTEM — PART THREE
DATE: August 23, 1971
TO: Mr. Eugene B. Sydnor, Jr., Chairman, Education Committee, U.S. Chamber of Commerce
FROM: Lewis F. Powell, Jr.
This memorandum is submitted at your request as a basis for the discussion on August 24 with Mr. Booth (executive vice president) and others at the U.S. Chamber of Commerce. The purpose is to identify the problem, and suggest possible avenues of action for further consideration.
[See Introduction and Parts One and Two for material that precedes the following.]
What Can Be Done About the Public?
Reaching the campus and the secondary schools is vital for the long-term. Reaching the public generally may be more important for the shorter term. The first essential is to establish the staffs of eminent scholars, writers and speakers, who will do the thinking, the analysis, the writing and the speaking. It will also be essential to have staff personnel who are thoroughly familiar with the media, and how most effectively to communicate with the public. Among the more obvious means are the following:
The national television networks should be monitored in the same way that textbooks should be kept under constant surveillance. This applies not merely to so-called educational programs (such as "Selling of the Pentagon"), but to the daily "news analysis" which so often includes the most insidious type of criticism of the enterprise system.12 Whether this criticism results from hostility or economic ignorance, the result is the gradual erosion of confidence in "business" and free enterprise.
This monitoring, to be effective, would require constant examination of the texts of adequate samples of programs. Complaints — to the media and to the Federal Communications Commission — should be made promptly and strongly when programs are unfair or inaccurate.
Equal time should be demanded when appropriate. Effort should be made to see that the forum-type programs (the Today Show, Meet the Press, etc.) afford at least as much opportunity for supporters of the American system to participate as these programs do for those who attack it.
Radio and the press are also important, and every available means should be employed to challenge and refute unfair attacks, as well as to present the affirmative case through these media.
The Scholarly Journals
It is especially important for the Chamber's "faculty of scholars" to publish. One of the keys to the success of the liberal and leftist faculty members has been their passion for "publication" and "lecturing." A similar passion must exist among the Chamber's scholars.
Incentives might be devised to induce more "publishing" by independent scholars who do believe in the system.
There should be a fairly steady flow of scholarly articles presented to a broad spectrum of magazines and periodicals — ranging from the popular magazines (Life, Look, Reader's Digest, etc.) to the more intellectual ones (Atlantic, Harper's, Saturday Review, New York, etc.)13 and to the various professional journals.
Books, Paperbacks and Pamphlets
The news stands — at airports, drugstores, and elsewhere — are filled with paperbacks and pamphlets advocating everything from revolution to erotic free love. One finds almost no attractive, well-written paperbacks or pamphlets on "our side." It will be difficult to compete with an Eldridge Cleaver or even a Charles Reich for reader attention, but unless the effort is made — on a large enough scale and with appropriate imagination to assure some success — this opportunity for educating the public will be irretrievably lost.
Business pays hundreds of millions of dollars to the media for advertisements. Most of this supports specific products; much of it supports institutional image making; and some fraction of it does support the system. But the latter has been more or less tangential, and rarely part of a sustained, major effort to inform and enlighten the American people.
If American business devoted only 10% of its total annual advertising budget to this overall purpose, it would be a statesman-like expenditure.
The Neglected Political Arena
In the final analysis, the payoff — short-of revolution — is what government does. Business has been the favorite whipping-boy of many politicians for many years. But the measure of how far this has gone is perhaps best found in the anti-business views now being expressed by several leading candidates for President of the United States.
It is still Marxist doctrine that the "capitalist" countries are controlled by big business. This doctrine, consistently a part of leftist propaganda all over the world, has a wide public following among Americans.
Yet, as every business executive knows, few elements of American society today have as little influence in government as the American businessman, the corporation, or even the millions of corporate stockholders. If one doubts this, let him undertake the role of "lobbyist" for the business point of view before Congressional committees. The same situation obtains in the legislative halls of most states and major cities. One does not exaggerate to say that, in terms of political influence with respect to the course of legislation and government action, the American business executive is truly the "forgotten man."
Current examples of the impotency of business, and of the near-contempt with which businessmen's views are held, are the stampedes by politicians to support almost any legislation related to "consumerism" or to the "environment."
Politicians reflect what they believe to be majority views of their constituents. It is thus evident that most politicians are making the judgment that the public has little sympathy for the businessman or his viewpoint.
The educational programs suggested above would be designed to enlighten public thinking — not so much about the businessman and his individual role as about the system which he administers, and which provides the goods, services and jobs on which our country depends.
But one should not postpone more direct political action, while awaiting the gradual change in public opinion to be effected through education and information. Business must learn the lesson, long ago learned by labor and other self-interest groups. This is the lesson that political power is necessary; that such power must be assidously (sic) cultivated; and that when necessary, it must be used aggressively and with determination — without embarrassment and without the reluctance which has been so characteristic of American business.
As unwelcome as it may be to the Chamber, it should consider assuming a broader and more vigorous role in the political arena.
Neglected Opportunity in the Courts
American business and the enterprise system have been affected as much by the courts as by the executive and legislative branches of government. Under our constitutional system, especially with an activist-minded Supreme Court, the judiciary may be the most important instrument for social, economic and political change.
Other organizations and groups, recognizing this, have been far more astute in exploiting judicial action than American business. Perhaps the most active exploiters of the judicial system have been groups ranging in political orientation from "liberal" to the far left.
The American Civil Liberties Union is one example. It initiates or intervenes in scores of cases each year, and it files briefs amicus curiae in the Supreme Court in a number of cases during each term of that court. Labor unions, civil rights groups and now the public interest law firms are extremely active in the judicial arena. Their success, often at business' expense, has not been inconsequential.
This is a vast area of opportunity for the Chamber, if it is willing to undertake the role of spokesman for American business and if, in turn, business is willing to provide the funds.
As with respect to scholars and speakers, the Chamber would need a highly competent staff of lawyers. In special situations it should be authorized to engage, to appear as counsel amicus in the Supreme Court, lawyers of national standing and reputation. The greatest care should be exercised in selecting the cases in which to participate, or the suits to institute. But the opportunity merits the necessary effort.
Neglected Stockholder Power
The average member of the public thinks of "business" as an impersonal corporate entity, owned by the very rich and managed by over-paid executives. There is an almost total failure to appreciate that "business" actually embraces — in one way or another — most Americans. Those for whom business provides jobs, constitute a fairly obvious class. But the 20 million stockholders — most of whom are of modest means — are the real owners, the real entrepreneurs, the real capitalists under our system. They provide the capital which fuels the economic system which has produced the highest standard of living in all history. Yet, stockholders have been as ineffectual as business executives in promoting a genuine understanding of our system or in exercising political influence.
The question which merits the most thorough examination is how can the weight and influence of stockholders — 20 million voters — be mobilized to support (i) an educational program and (ii) a political action program.
Individual corporations are now required to make numerous reports to shareholders. Many corporations also have expensive "news" magazines which go to employees and stockholders. These opportunities to communicate can be used far more effectively as educational media.
The corporation itself must exercise restraint in undertaking political action and must, of course, comply with applicable laws. But is it not feasible — through an affiliate of the Chamber or otherwise — to establish a national organization of American stockholders and give it enough muscle to be influential?
A More Aggressive Attitude
Business interests — especially big business and their national trade organizations — have tried to maintain low profiles, especially with respect to political action.
As suggested in the Wall Street Journal article, it has been fairly characteristic of the average business executive to be tolerant — at least in public — of those who attack his corporation and the system. Very few businessmen or business organizations respond in kind. There has been a disposition to appease; to regard the opposition as willing to compromise, or as likely to fade away in due time.
Business has shunted confrontation politics. Business, quite understandably, has been repelled by the multiplicity of non-negotiable "demands" made constantly by self-interest groups of all kinds.
While neither responsible business interests, nor the United States Chamber of Commerce, would engage in the irresponsible tactics of some pressure groups, it is essential that spokesmen for the enterprise system — at all levels and at every opportunity — be far more aggressive than in the past.
There should be no hesitation to attack the Naders, the Marcuses and others who openly seek destruction of the system. There should not be the slightest hesitation to press vigorously in all political arenas for support of the enterprise system. Nor should there be reluctance to penalize politically those who oppose it.
Lessons can be learned from organized labor in this respect. The head of the AFL-CIO may not appeal to businessmen as the most endearing or public-minded of citizens. Yet, over many years the heads of national labor organizations have done what they were paid to do very effectively. They may not have been beloved, but they have been respected — where it counts the most — by politicians, on the campus, and among the media.
It is time for American business — which has demonstrated the greatest capacity in all history to produce and to influence consumer decisions — to apply their great talents vigorously to the preservation of the system itself.
The type of program described above (which includes a broadly based combination of education and political action), if undertaken long term and adequately staffed, would require far more generous financial support from American corporations than the Chamber has ever received in the past. High level management participation in Chamber affairs also would be required.
The staff of the Chamber would have to be significantly increased, with the highest quality established and maintained. Salaries would have to be at levels fully comparable to those paid key business executives and the most prestigious faculty members. Professionals of the great skill in advertising and in working with the media, speakers, lawyers and other specialists would have to be recruited.
It is possible that the organization of the Chamber itself would benefit from restructuring. For example, as suggested by union experience, the office of President of the Chamber might well be a full-time career position. To assure maximum effectiveness and continuity, the chief executive officer of the Chamber should not be changed each year. The functions now largely performed by the President could be transferred to a Chairman of the Board, annually elected by the membership. The Board, of course, would continue to exercise policy control.
Quality Control is Essential
Essential ingredients of the entire program must be responsibility and "quality control." The publications, the articles, the speeches, the media programs, the advertising, the briefs filed in courts, and the appearances before legislative committees — all must meet the most exacting standards of accuracy and professional excellence. They must merit respect for their level of public responsibility and scholarship, whether one agrees with the viewpoints expressed or not.
Relationship to Freedom
The threat to the enterprise system is not merely a matter of economics. It also is a threat to individual freedom.
It is this great truth — now so submerged by the rhetoric of the New Left and of many liberals — that must be re-affirmed if this program is to be meaningful.
There seems to be little awareness that the only alternatives to free enterprise are varying degrees of bureaucratic regulation of individual freedom — ranging from that under moderate socialism to the iron heel of the leftist or rightist dictatorship.
We in America already have moved very far indeed toward some aspects of state socialism, as the needs and complexities of a vast urban society require types of regulation and control that were quite unnecessary in earlier times. In some areas, such regulation and control already have seriously impaired the freedom of both business and labor, and indeed of the public generally. But most of the essential freedoms remain: private ownership, private profit, labor unions, collective bargaining, consumer choice, and a market economy in which competition largely determines price, quality and variety of the goods and services provided the consumer.
In addition to the ideological attack on the system itself (discussed in this memorandum), its essentials also are threatened by inequitable taxation, and — more recently — by an inflation which has seemed uncontrollable.14 But whatever the causes of diminishing economic freedom may be, the truth is that freedom as a concept is indivisible. As the experience of the socialist and totalitarian states demonstrates, the contraction and denial of economic freedom is followed inevitably by governmental restrictions on other cherished rights. It is this message, above all others, that must be carried home to the American people.
It hardly need be said that the views expressed above are tentative and suggestive. The first step should be a thorough study. But this would be an exercise in futility unless the Board of Directors of the Chamber accepts the fundamental premise of this paper, namely, that business and the enterprise system are in deep trouble, and the hour is late.
12. It has been estimated that the evening half-hour news programs of the networks reach daily some 50,000,000 Americans.
13. One illustration of the type of article which should not go unanswered appeared in the popular "The New York" of July 19, 1971. This was entitled "A Populist Manifesto" by ultra liberal Jack Newfield — who argued that "the root need in our country is 'to redistribute wealth'."
14. The recent "freeze" of prices and wages may well be justified by the current inflationary crisis. But if imposed as a permanent measure the enterprise system will have sustained a near fatal blow.
ATTACK OF AMERICAN FREE ENTERPRISE SYSTEM — PART TWO
DATE: August 23, 1971
TO: Mr. Eugene B. Sydnor, Jr., Chairman, Education Committee, U.S. Chamber of Commerce
FROM: Lewis F. Powell, Jr.
This memorandum is submitted at your request as a basis for the discussion on August 24 with Mr. Booth (executive vice president) and others at the U.S. Chamber of Commerce. The purpose is to identify the problem, and suggest possible avenues of action for further consideration.
[See Part One for material that precedes the following.]
The assault on the enterprise system was not mounted in a few months. It has gradually evolved over the past two decades, barely perceptible in its origins and benefiting (sic) from a gradualism that provoked little awareness much less any real reaction.
Although origins, sources and causes are complex and interrelated, and obviously difficult to identify without careful qualification, there is reason to believe that the campus is the single most dynamic source. The social science faculties usually include members who are unsympathetic to the enterprise system. They may range from a Herbert Marcuse, Marxist faculty member at the University of California at San Diego, and convinced socialists, to the ambivalent liberal critic who finds more to condemn than to commend. Such faculty members need not be in a majority. They are often personally attractive and magnetic; they are stimulating teachers, and their controversy attracts student following; they are prolific writers and lecturers; they author many of the textbooks, and they exert enormous influence — far out of proportion to their numbers — on their colleagues and in the academic world.
Social science faculties (the political scientist, economist, sociologist and many of the historians) tend to be liberally oriented, even when leftists are not present. This is not a criticism per se, as the need for liberal thought is essential to a balanced viewpoint. The difficulty is that "balance" is conspicuous by its absence on many campuses, with relatively few members being of conservatives or moderate persuasion and even the relatively few often being less articulate and aggressive than their crusading colleagues.
This situation extending back many years and with the imbalance gradually worsening, has had an enormous impact on millions of young American students. In an article in Barron's Weekly, seeking an answer to why so many young people are disaffected even to the point of being revolutionaries, it was said:
"Because they were taught that way."1,Or, as noted by columnist Stewart Alsop, writing about his alma mater:
"Yale, like every other major college, is graduating scores' of bright young menAs these "bright young men," from campuses across the country, seek opportunities to change a system which they have been taught to distrust — if not, indeed "despise" — they seek employment in the centers of the real power and influence in our country, namely: (i) with the news media, especially television; (ii) in government, as "staffers" and consultants at various levels; (iii) in elective politics; (iv) as lecturers and writers, and (v) on the faculties at various levels of education.
... who despise the American political and economic system."
Many do enter the enterprise system — in business and the professions — and for the most part they quickly discover the fallacies of what they have been taught. But those who eschew the mainstream of the system often remain in key positions of influence where they mold public opinion and often shape governmental action. In many instances, these "intellectuals" end up in regulatory agencies or governmental departments with large authority over the business system they do not believe in.
If the foregoing analysis is approximately sound, a priority task of business — and organizations such as the Chamber — is to address the campus origin of this hostility. Few things are more sanctified in American life than academic freedom. It would be fatal to attack this as a principle. But if academic freedom is to retain the qualities of "openness," "fairness" and "balance" — which are essential to its intellectual significance — there is a great opportunity for constructive action. The thrust of such action must be to restore the qualities just mentioned to the academic communities.
What Can Be Done About the Campus
The ultimate responsibility for intellectual integrity on the campus must remain on the administrations and faculties of our colleges and universities. But organizations such as the Chamber can assist and activate constructive change in many ways, including the following:
Staff of Scholars
The Chamber should consider establishing a staff of highly qualified scholars in the social sciences who do believe in the system. It should include several of national reputation whose authorship would be widely respected — even when disagreed with.
Staff of Speakers
There also should be a staff of speakers of the highest competency. These might include the scholars, and certainly those who speak for the Chamber would have to articulate the product of the scholars.
In addition to full-time staff personnel, the Chamber should have a Speaker's Bureau which should include the ablest and most effective advocates from the top echelons of American business.
Evaluation of Textbooks
The staff of scholars (or preferably a panel of independent scholars) should evaluate social science textbooks, especially in economics, political science and sociology. This should be a continuing program.
The objective of such evaluation should be oriented toward restoring the balance essential to genuine academic freedom. This would include assurance of fair and factual treatment of our system of government and our enterprise system, its accomplishments, its basic relationship to individual rights and freedoms, and comparisons with the systems of socialism, fascism and communism. Most of the existing textbooks have some sort of comparisons, but many are superficial, biased and unfair.
We have seen the civil rights movement insist on re-writing many of the textbooks in our universities and schools. The labor unions likewise insist that textbooks be fair to the viewpoints of organized labor. Other interested citizens groups have not hesitated to review, analyze and criticize textbooks and teaching materials. In a democratic society, this can be a constructive process and should be regarded as an aid to genuine academic freedom and not as an intrusion upon it.
If the authors, publishers and users of textbooks know that they will be subjected — honestly, fairly and thoroughly — to review and critique by eminent scholars who believe in the American system, a return to a more rational balance can be expected.
Equal Time on the Campus
The Chamber should insist upon equal time on the college speaking circuit. The FBI publishes each year a list of speeches made on college campuses by avowed Communists. The number in 1970 exceeded 100. There were, of course, many hundreds of appearances by leftists and ultra liberals who urge the types of viewpoints indicated earlier in this memorandum. There was no corresponding representation of American business, or indeed by individuals or organizations who appeared in support of the American system of government and business.
Every campus has its formal and informal groups which invite speakers. Each law school does the same thing. Many universities and colleges officially sponsor lecture and speaking programs. We all know the inadequacy of the representation of business in the programs.
It will be said that few invitations would be extended to Chamber speakers.11 This undoubtedly would be true unless the Chamber aggressively insisted upon the right to be heard — in effect, insisted upon "equal time." University administrators and the great majority of student groups and committees would not welcome being put in the position publicly of refusing a forum to diverse views, indeed, this is the classic excuse for allowing Communists to speak.
The two essential ingredients are (i) to have attractive, articulate and well-informed speakers; and (ii) to exert whatever degree of pressure — publicly and privately — may be necessary to assure opportunities to speak. The objective always must be to inform and enlighten, and not merely to propagandize.
Balancing of Faculties
Perhaps the most fundamental problem is the imbalance of many faculties. Correcting this is indeed a long-range and difficult project. Yet, it should be undertaken as a part of an overall program. This would mean the urging of the need for faculty balance upon university administrators and boards of trustees.
The methods to be employed require careful thought, and the obvious pitfalls must be avoided. Improper pressure would be counterproductive. But the basic concepts of balance, fairness and truth are difficult to resist, if properly presented to boards of trustees, by writing and speaking, and by appeals to alumni associations and groups.
This is a long road and not one for the fainthearted. But if pursued with integrity and conviction it could lead to a strengthening of both academic freedom on the campus and of the values which have made America the most productive of all societies.
Graduate Schools of Business
The Chamber should enjoy a particular rapport with the increasingly influential graduate schools of business. Much that has been suggested above applies to such schools.
Should not the Chamber also request specific courses in such schools dealing with the entire scope of the problem addressed by this memorandum? This is now essential training for the executives of the future.
While the first priority should be at the college level, the trends mentioned above are increasingly evidenced in the high schools. Action programs, tailored to the high schools and similar to those mentioned, should be considered. The implementation thereof could become a major program for local chambers of commerce, although the control and direction — especially the quality control — should be retained by the National Chamber.
10. Barron's National Business and Financial Weekly, "The Total Break with America, The Fifth Annual Conference of Socialist Scholars," Sept. 15, 1969.
ATTACK OF AMERICAN FREE ENTERPRISE SYSTEM — PART ONE
DATE: August 23, 1971
TO: Mr. Eugene B. Sydnor, Jr., Chairman, Education Committee, U.S. Chamber of Commerce
FROM: Lewis F. Powell, Jr.
This memorandum is submitted at your request as a basis for the discussion on August 24 with Mr. Booth (executive vice president) and others at the U.S. Chamber of Commerce. The purpose is to identify the problem, and suggest possible avenues of action for further consideration.
Dimensions of the Attack
No thoughtful person can question that the American economic system is under broad attack.1 This varies in scope, intensity, in the techniques employed, and in the level of visibility.
There always have been some who opposed the American system, and preferred socialism or some form of statism (communism or fascism). Also, there always have been critics of the system, whose criticism has been wholesome and constructive so long as the objective was to improve rather than to subvert or destroy.
But what now concerns us is quite new in the history of America. We are not dealing with sporadic or isolated attacks from a relatively few extremists or even from the minority socialist cadre. Rather, the assault on the enterprise system is broadly based and consistently pursued. It is gaining momentum and converts.
Sources of the Attack
The sources are varied and diffused. They include, not unexpectedly, the Communists, New Leftists and other revolutionaries who would destroy the entire system, both political and economic. These extremists of the left are far more numerous, better financed, and increasingly are more welcomed and encouraged by other elements of society, than ever before in our history. But they remain a small minority, and are not yet the principal cause for concern.
The most disquieting voices joining the chorus of criticism come from perfectly respectable elements of society: from the college campus, the pulpit, the media, the intellectual and literary journals, the arts and sciences, and from politicians. In most of these groups the movement against the system is participated in only by minorities. Yet, these often are the most articulate, the most vocal, the most prolific in their writing and speaking.
Moreover, much of the media — for varying motives and in varying degrees — either voluntarily accords unique publicity to these "attackers," or at least allows them to exploit the media for their purposes. This is especially true of television, which now plays such a predominant role in shaping the thinking, attitudes and emotions of our people.
One of the bewildering paradoxes of our time is the extent to which the enterprise system tolerates, if not participates in, its own destruction.
The campuses from which much of the criticism emanates are supported by (i) tax funds generated largely from American business, and (ii) contributions from capital funds controlled or generated by American business. The boards of trustees of our universities overwhelmingly are composed of men and women who are leaders in the system.
Most of the media, including the national TV systems, are owned and theoretically controlled by corporations which depend upon profits, and the enterprise system to survive.
Tone of the Attack
This memorandum is not the place to document in detail the tone, character, or intensity of the attack. The following quotations will suffice to give one a general idea:
William Kunstler, warmly welcomed on campuses and listed in a recent student poll as the "American lawyer most admired," incites audiences as follows:
"You must lean to fight in the streets, to revolt, to shoot guns. We will learn
to do all of the things that property owners fear."2
The New Leftists who heed Kunstler's advice increasingly are beginning to act -- not just against military recruiting offices and manufacturers of munitions, but against a variety of businesses:
"Since February, 1970, branches (of Bank of America) have been attacked 39
times, 22 times with explosive devices and 17 times with fire bombs or by
Although New Leftist spokesmen are succeeding in radicalizing thousands of the young, the greater cause for concern is the hostility of respectable liberals and social reformers. It is the sum total of their views and influence which could indeed fatally weaken or destroy the system.
A chilling description of what is being taught on many of our campuses was written by Stewart Alsop:
"Yale, like every other major college, is graduating scores of bright young men
who are practitioners of 'the politics of despair.' These young men despise the
American political and economic system . . . (their) minds seem to be wholly
closed. They live, not by rational discussion, but by mindless slogans."4
A recent poll of students on 12 representative campuses reported that:
"Almost half the students favored socialization of basic U.S. industries."5
A visiting professor from England at Rockford College gave a series of lectures entitled "The Ideological War Against Western Society," in which he documents the extent to which members of the intellectual community are waging ideological warfare against the enterprise system and the values of western society. In a foreword to these lectures, famed Dr. Milton Friedman of Chicago warned:
"It (is) crystal clear that the foundations of our free society are under
wide-ranging and powerful attack — not by Communist or any other conspiracy but
by misguided individuals parroting one another and unwittingly serving ends they
would never intentionally promote."6
Perhaps the single most effective antagonist of American business is Ralph Nader who — thanks largely to the media — has become a legend in his own time and an idol of millions of Americans. A recent article in Fortune speaks of Nader as follows:
"The passion that rules in him — and he is a passionate man — is aimed at
smashing utterly the target of his hatred, which is corporate power. He thinks,
and says quite bluntly, that a great many corporate executives belong in prison
— for defrauding the consumer with shoddy merchandise, poisoning the food supply
with chemical additives, and willfully manufacturing unsafe products that will
maim or kill the buyer. He emphasizes that he is not talking just about
'fly-by-night hucksters' but the top management of blue chip business."7
A frontal assault was made on our government, our system of justice, and the free enterprise system by Yale Professor Charles Reich in his widely publicized book: "The Greening of America," published last winter.
The foregoing references illustrate the broad, shotgun attack on the system itself. There are countless examples of rifle shots which undermine confidence and confuse the public. Favorite current targets are proposals for tax incentives through changes in depreciation rates and investment credits. These are usually described in the media as "tax breaks," "loop holes" or "tax benefits" for the benefit of business. * As viewed by a columnist in the Post, such tax measures would benefit "only the rich, the owners of big companies."8
It is dismaying that many politicians make the same argument that tax measures of this kind benefit only "business," without benefit to "the poor." The fact that this is either political demagoguery or economic illiteracy is of slight comfort. This setting of the "rich" against the "poor," of business against the people, is the cheapest and most dangerous kind of politics.
The Apathy and Default of Business
What has been the response of business to this massive assault upon its fundamental economics, upon its philosophy, upon its right to continue to manage its own affairs, and indeed upon its integrity?
The painfully sad truth is that business, including the boards of directors' and the top executives of corporations great and small and business organizations at all levels, often have responded — if at all — by appeasement, ineptitude and ignoring the problem. There are, of course, many exceptions to this sweeping generalization. But the net effect of such response as has been made is scarcely visible.
In all fairness, it must be recognized that businessmen have not been trained or equipped to conduct guerrilla warfare with those who propagandize against the system, seeking insidiously and constantly to sabotage it. The traditional role of business executives has been to manage, to produce, to sell, to create jobs, to make profits, to improve the standard of living, to be community leaders, to serve on charitable and educational boards, and generally to be good citizens. They have performed these tasks very well indeed.
But they have shown little stomach for hard-nose contest with their critics, and little skill in effective intellectual and philosophical debate.
A column recently carried by the Wall Street Journal was entitled: "Memo to GM: Why Not Fight Back?"9 Although addressed to GM by name, the article was a warning to all American business. Columnist St. John said:
"General Motors, like American business in general, is 'plainly in trouble'
because intellectual bromides have been substituted for a sound intellectual
exposition of its point of view."
Mr. St. John then commented on the tendency of business leaders to compromise with and appease critics. He cited the concessions which Nader wins from management, and spoke of "the fallacious view many businessmen take toward their critics." He drew a parallel to the mistaken tactics of many college administrators:
"College administrators learned too late that such appeasement serves to destroy
free speech, academic freedom and genuine scholarship. One campus radical demand
was conceded by university heads only to be followed by a fresh crop which soon
escalated to what amounted to a demand for outright surrender."
One need not agree entirely with Mr. St. John's analysis. But most observers of the American scene will agree that the essence of his message is sound. American business "plainly in trouble"; the response to the wide range of critics has been ineffective, and has included appeasement; the time has come — indeed, it is long overdue — for the wisdom, ingenuity and resources of American business to be marshalled against those who would destroy it.
Responsibility of Business Executives
What specifically should be done? The first essential — a prerequisite to any effective action — is for businessmen to confront this problem as a primary responsibility of corporate management.
The overriding first need is for businessmen to recognize that the ultimate issue may be survival — survival of what we call the free enterprise system, and all that this means for the strength and prosperity of America and the freedom of our people.
The day is long past when the chief executive officer of a major corporation discharges his responsibility by maintaining a satisfactory growth of profits, with due regard to the corporation's public and social responsibilities. If our system is to survive, top management must be equally concerned with protecting and preserving the system itself. This involves far more than an increased emphasis on "public relations" or "governmental affairs" — two areas in which corporations long have invested substantial sums.
A significant first step by individual corporations could well be the designation of an executive vice president (ranking with other executive VP's) whose responsibility is to counter-on the broadest front-the attack on the enterprise system. The public relations department could be one of the foundations assigned to this executive, but his responsibilities should encompass some of the types of activities referred to subsequently in this memorandum. His budget and staff should be adequate to the task. Possible Role of the Chamber of Commerce
But independent and uncoordinated (sic) activity by individual corporations, as important as this is, will not be sufficient. Strength lies in organization, in careful long-range planning and implementation, in consistency of action over an indefinite period of years, in the scale of financing available only through joint effort, and in the political power available only through united action and national organizations.
Moreover, there is the quite understandable reluctance on the part of any one corporation to get too far out in front and to make itself too visible a target.
The role of the National Chamber of Commerce is therefore vital. Other national organizations (especially those of various industrial and commercial groups) should join in the effort, but no other organizations appear to be as well situated as the Chamber. It enjoys a strategic position, with a fine reputation and a broad base of support. Also — and this is of immeasurable merit — there are hundreds of local Chambers of Commerce which can play a vital supportive role.
It hardly need be said that before embarking upon any program, the Chamber should study and analyze possible courses of action and activities, weighing risks against probable effectiveness and feasibility of each. Considerations of cost, the assurance of financial and other support from members, adequacy of staffing and similar problems will all require the most thoughtful consideration.
1. Variously called: the "free enterprise system," "capitalism," and the "profit system." The American political system of democracy under the rule of law is also under attack, often by the same individuals and organizations who seek to undermine the enterprise system.
2. Richmond News Leader, June 8, 1970. Column of William F. Buckley, Jr.
3. N.Y. Times Service article, reprinted Richmond Times-Dispatch, May 17, 1971.
4. Stewart Alsop, Yale and the Deadly Danger, Ncwsweek, May 18. 1970.
5. Editorial, Richmond Times-Dispatch, July 7, 1971.
6. Dr. Milton Friedman, Prof. of Economics, U. of Chicago, writing a foreword to Dr. Arthur A. Shenfield's Rockford College lectures entitled "The Ideological War Against Western Society," copyrighted 1970 by Rockford College.
7. Fortune. May, 1971, p. 145. This Fortune analysis of the Nader influence includes a reference to Nader's visit to a college where he was paid a lecture fee of $2,500 for "denouncing America's big corporations in venomous language . . . bringing (rousing and spontaneous) bursts of applause" when he was asked when he planned to run for President.
*. Italic emphasis added by Mr. Powell.
8. The Washington Post, Column of William Raspberry, June 28, 1971.
9. Jeffrey St. John, The Wall Street Journal, May 21, 1971.
BACKGROUND OF THE POWELL MEMORANDUM
When National Chamber Director Eugene B. Sydnor, Jr., became chairman of the US Chamber of Commerce Education Committee, he discussed with his neighbor and long-time friend, Lewis F. Powell, Richmond attorney, ways to provide the public a more balanced view of the country's economic system.
At Mr. Sydnor's request, Mr. Powell, based on his broad experience as chairman of the Richmond City School Board, as well as the Virginia State Board of Education prepared a memorandum in which he incorporated a number of possible approaches. The memorandum covered a broad range of educational and other activities for study and consideration by the National Chamber.
The memorandum was dated August 23, 1971, two months before Mr. Powell was nominated to become a member justice of the Supreme Court of the United States. It was studied and evaluation by Chamber officers and staff members. Several of its approaches were put into practice, but others languished for lack of resources or passion needed to carry out the suggestions.
Jack Anderson, the syndicated columnist, wrote several columns discussing the memorandum. Mr. Anderson obtained a copy of the memorandum without the knowledge or permission of the National Chamber. Anyone reading the Powell memorandum will easily conclude that it objectively and fairly deals with a very real problem facing the free enterprise system.
ABOUT THE AUTHOR LEWIS F. POWELL
Lewis Franklin Powell, Jr. (September 19, 1907 – August 25, 1998) was an Associate Justice of the Supreme Court of the United States. He developed a reputation as a judicial moderate, and was known as a master of compromise and consensus-building. He was also widely well-regarded by contemporaries due to his personal good manners and politeness.
Powell was born in Suffolk, Virginia. He attended Washington and Lee University, garnering both an undergraduate and a law degree from that university. He was elected president of student body as an undergraduate and was a member of Phi Kappa Sigma. At a leadership conference, he met Edward R. Murrow and they became close friends. He attended Harvard Law School for a master's degree.
During World War II, he spent more than three years in Europe and North Africa. He started as a First Lieutenant, and eventually rose to the rank of Colonel. He worked mostly in intelligence, decoding German messages.
Powell was a partner for over a quarter of a century at Hunton, Williams, Gay, Powell and Gibson, a large Virginia law firm, with its primary office in Richmond (now known as Hunton & Williams LLP). Powell practiced primarily in the areas of corporate law (especially in the field of mergers and acquisitions) and in railway litigation law.
The Powell Memorandum
In August 1971, prior to accepting Nixon's request to become Associate Justice of Supreme Court, Lewis Powell had sent to the leadership of the U.S. Chamber of Commerce the "Confidential Memorandum", better known as the Powell Memorandum, and still under the radar of general public. It sounded an alarm with its title, "Attack on the American Free Enterprise System." The previous decade had seen the increasing regulation of many industries and, as Powell argued, "The most disquieting voices joining the chorus of criticism came from perfectly respectable elements of society: from the college campus, the pulpit, the media, the intellectual and literary journals, the arts and sciences, and from politicians." In the memorandum, Powell advocated "constant surveillance" of textbook and television content, as well as a purge of left-wing elements.
In an extraordinary prefiguring of the social goals of business that would be felt over the next three decades, Powell set his main goal: Changing how individuals and society think about the corporation, the government, the law, the culture, and the individual became, and would remain, a major goal of business.
He had been a board member of Philip Morris between 1964 until his appointment in 1971, and had acted as a contact point for the tobacco industry with the Virginia Commonwealth University. Through his law firm, Hunton Williams Gay Powell & Gibson (later just Hunton & Williams) he represented the Tobacco Institute and the various tobacco companies in numerous law cases.
Saturday, April 11, 2009
Almighty God, who through your only-begotten Son Jesus Christ overcame death and opened to us the gate of everlasting life: Grant that we, who celebrate with joy the day of our Lord’s resurrection, may be raised from the death of sin by your life-giving Spirit; through Jesus Christ our Lord, who lives and reigns with you and the Holy Spirit, one God, now and for ever. Amen.
In the Love and Grace of Our
Lord and Savior, Jesus Christ,
Friday, April 10, 2009
The liturgical title for this day in the Western church was "Friday of Preparation," similar to what the Jews called Friday — paraskeue (getting ready) or "day of preparation." Other names used are "Holy Friday" among the Latin nations, "Great Friday" among the Slavic countries, "Friday of Mourning" in Germany, and "Long Friday" in Norway.
Good Friday is good because, on this day God reconciled the world to himself in Christ. For us it is "good" because we look back at the crucifixion through the lens of Easter!
Lord Jesus Christ, Son of the living God, we pray you to set your passion, cross, and death between your judgment and our souls, now and in the hour of our death. Give mercy and grace to the living; pardon and rest to the dead; to your holy Church peace and concord; and to us sinners everlasting life and glory; for with the Father and Holy Spirit you live and reign, one God, now and for ever. Amen,
Wednesday, April 08, 2009
The following is excerpted from "A Time For Truth", a book published in 1978 and written by former Secretary of the Treasury, William E. Simon. That these words were written 30 years ago should give every American reason to wonder if we have learned nothing from our past. The principles contained here reflect true wisdom and reveal a sound platform for the resuscitation of free enterprise and for conservative political activism that is essential today if we are to stop the slide of America into the liberal abyss of moral relativism. These guiding principles offered by Simon should aide in developing positive conservative talking points and underlying principles. It is essential that we return to sound economic policies as a people and as a government. There can be no mistake in applying the formula because political freedom and economic freedom are inexorably linked. At no time in America's history have these freedoms been in greater danger of being lost than at this present moment.
1. The overriding principle to be revived in American political life is that which sets individual liberty as the highest political value — that value to which all other values are subordinate and that which, at all times, is to be given the highest priority in policy discussions.
2. There must be a conscious philosophical prejudice against any intervention by the state into our lives, for by definition such intervention abridges liberty. Whatever form it may take, state intervention in the private and productive lives of the citizenry must be presumed to be negative, uncreative, and a dangerous act, to be adopted only when its proponents provide overwhelming and incontrovertible evidence that the benefits to society of such intervention far outweigh the costs.
3. The principle of "no taxation without representation" must again become a rallying cry for Americans. Only Congress represents American voters, and the process of transferring regulatory powers — which are a hidden power to tax — to unelected, uncontrollable, and unfireable bureaucrats must stop. The American voters, who pay the bills, must be in a position to know what is being economically inflicted on them and in a position to vote men out of office who assault their interests, as the voters define those interests. Which means that Congress should not pass bills creating programs that it cannot effectively oversee. The drive to demand scrupulous legislative oversight of our policing agencies, such as the CIA, is valid; it should be extended to all agencies of government which are also, directly or indirectly, exercising police powers.
4. A critical principle which must be communicated forcefully to the American public is the inexorable interdependence of economic and political liberty. Our citizens must learn that what keeps them prosperous is production and technological innovation. Their wealth emerges, not from government offices or politicians' edicts, but only from that portion of the marketplace which is free. They must also be taught to understand the relationship among collectivism, centralized planning, and poverty so that every new generation of Americans need not naively receive the Marxist revelation afresh.
5. Bureaucracies themselves should be assumed to be noxious, authoritarian parasites on society, with a tendency to augment their own size and power and to cultivate a parasitical clientele in all classes of society. Area after area of American life should be set free from their blind power drive. We commonly hear people call for a rollback of prices, often unaware that they are actually calling for the destruction of marginal businesses and jobs they furnish. People must be taught to start calling for the rollback of bureaucracy, where nothing will be lost but strangling regulation and where the gains will always take the form of liberty, productivity, and jobs.
6. Productivity and the growth of productivity must be the first economic consideration at all times, not the last. That is the source of technological innovation, jobs, and wealth. This means that profits needed for investment must be respected as a great social blessing, not as social evil, and that envy of the "rich" cannot be allowed to destroy a powerful economic system.
7. The concept that "wealth is theft" must be repudiated. It now lurks, implicitly, in most of the political statements we hear. Wealth can indeed be stolen, but only after it is produced. and the difference between stolen wealth and produced wealth is critical. If a man obtains money by fraud or by force, he is simply a criminal to be handled by the police and the courts. But if he has earned his income honorably, by the voluntary exchange of goods and services, he is not a criminal or a second-hand citizen and should not be treated as such. A society taught to perceive producers as criminals will end up destroying its productive processes.
8. Conversely, the concept that the absence of money implies some sort of virtue should be repudiated. Poverty may result from honest misfortune, but it may result from sloth, incompetence, and dishonesty. Again, the distinction between deserving and undeserving poor is important. It is a virtue to assist those who are in acute need through no fault of their own, but it is folly to glamorize men simply because they are penniless. The crude linkage between wealth and evil, poverty and virtue is false, stupid, and of value only to demagogues, parasites, and criminals — indeed, the three groups that alone have profited from the linkage
9. Similarly, the view that government is virtuous and producers are evil is a piece of folly, and a nation which allows itself to be tacitly guided by these illusions must lose both its liberty and its wealth. Government has its proper functions, and consequently, there can be both good and bad governments. Producers as well can be honest and dishonest. Our political discourse can be rendered rational only when people are taught to make such discriminations.
10. The "ethics" of egalitarianism must be repudiated. Achievers must not be penalized or parasites rewarded if we aspire to be a healthy, productive, and ethical society. Able bodied citizens must work to sustain their lives, and in a healthy economic system they would be enabled and encouraged to save for their own old age. Chiefly, so long as the government’s irrational fiscal policies make this impossible, present commitments to pensions and Social Security must be maintained at all costs, for the bulk of the population has no other recourse. But as soon as is politically feasible — meaning, as soon as production becomes the nation’s highest economic value — the contributions of able-bodied citizens to their own future pensions should be invested by them in far safer commercial institutions, where the sums can earn high interest without being squandered by politicians and bureaucrats. American citizens must be taught to wrest their life savings from the politicians if they are to know the comfort of genuine security.
11. The American citizen must be made aware that today a relatively small group of people is proclaiming its purposes to be the will of the People. That elitist approach to the government must be repudiated. There is no such thing as the People; it is a collectivist myth. There are only individual citizens with individual wills and individual purposes. There is only one social system that reflects this sovereignty of the individual: the free-market, or capitalist system, which means the sovereignty of the individual "vote" in the marketplace and the sovereignty of the individual in the political realm. That individual sovereignty is being destroyed in this country by our political trends, and it is scarcely astonishing that individuals now feel "alienated" from their government. They are alienated from it; they have virtually been expelled from the governmental process, where only organized mobs prevail.
12. The growing cynicism about democracy must be combated by explaining why it has become corrupted. People have been taught that if they can get together big enough gangs, they have the legal power to hijack other citizens' wealth, which means the power to hijack other people's efforts, energies, and lives. No decent society can function when men are given such power. A State does need funds, but a clear cutoff line must be established beyond which no political group or institution can confiscate a citizen’s honorably earned property. The notion that one can differentiate between "property rights" and "human rights" is ignoble. One need merely see the appalling condition of "human rights" in nations where there are no "property rights" to understand why. This is just a manifestation of the socialist myth which imagines that one can keep men’s minds free while enslaving their bodies.
These are some of the broad principles I have reached after four years in office. Essentially they are a set of guiding principles. America is foundering for the lack of principles; it is now guided by the belief that unprincipled action — for which the respectable name is "pragmatism" — is somehow superior. Such principles as I have listed do not represent dogma. There is, as I said, nothing arbitrary or dogmatic about the interlocking relationship between political and economic liberty. The history of every nation on earth demonstrates that relationship, and no economist known to me, including the theoreticians of interventionism and totalitarianism, denies this. If liberty is to be our highest political value, this set of broad principles follow consistently."
William E. Simon. A Time For Truth, McCraw-Hill Book Company, 1978, p. 217