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November 2009 Archives

November 13, 2009

Religious Exemptions--Skeel

At a law and religion conference at Seton Hall’s law school yesterday, Rob Vischer, a law professor at St. Thomas, gave a fascinating talk that touched on the debate over religious exemptions—the question whether religiously oriented individuals and businesses should be protected from discrimination claims. This issue arose when a photo shop was sued for refusing to provide photography services at a gay wedding, and in cases challenging pharmacists’ refusal to dispense birth control or abortion pills. Vischer argues that the cases should focus less on the parties’ competing claims of conscience than on whether the declinations genuinely interfere with the plaintiffs’ access to these services (in many of these cases, they don’t). Among other things, such a shift might better protect the ability of businesses and other associations to govern themselves as they see fit. 

An obvious question with this approach is whether it would also have justified the refusal to serve blacks that characterized the Jim Crow era. Vischer acknowledged this concern, but argued that Jim Crow race practices shouldn’t be our template for thinking about the current issues. The harms in that era were much more systematic and severe than the harms claimed in the recent cases.
I don’t often think in terms of the consequences of social sin. But it seems to me that the way in which our country’s experience with slavery has complicated the debates on so many other issues—and has invited absolutist claims about what equality requires—is part of God’s punishment on our country for the sin of slavery.   Had it not been for slavery and the ongoing legacy of racial discrimination, the national discussion of these other issues surely would have looked quite different.

November 22, 2009

Goldman's Good Works--Skeel

For reading the current financial tea leaves, the week’s most important event was Goldman Sachs’ announcement that it will devote $500 million to loans for small businesses and other good works. This noblesse oblige underscores just how much money Goldman has been raking in, in part thanks to the government’s bailouts. 

The early reports have speculated that Goldman is trying to repair its reputation with the American people, to curry favor with Main Street. I think this is partly right, but that the real audience is government. Goldman’s decision seems to reflect a conclusion by the smartest bank on Wall Street that keeping the government happy is going to be the most important factor in business success in the coming years, even after the crisis is fully behind us. I suspect a lot of other banks and businesses will follow Goldman’s cue. Many of these measures may be quite desirable in themselves, but it can’t be a good thing if everyone’s principal focus is keeping government overseers happy.

November 29, 2009

Should Geithner Step Down?--Skeel

A recent report by Neil Barofsky, the special investigator for the $700 billion TARP program, criticizing last year’s AIG bailout has stoked suggestions that perhaps it’s time for Treasury Secretary Geithner to step down. My guess is that Geithner will indeed step down by the end of 2010, but that he will almost certainly step down too late.

The ideal time for a Geithner resignation might be in January, before Congress finalizes its financial reform package. President Obama presumably selected Geithner as Treasury Secretary due to his deep familiarity with the big Wall Street banks, and in order to maintain continuity with the Bush Administration’s response to the financial crisis. The Bush and Obama response centered on the use of ad hoc bailouts to fend off the possibility of a market-wide crisis. We now seem to have passed this stage of the crisis, and moved to the regulatory phase. The central problem with the administration’s financial reform proposals is that they are backward looking. They are designed to expand bank regulators’ powers, so that they can more easily effect the kind of bailouts that regulators pursued in 2008.
If Geithner stepped down in early January, he could announce (carefully avoiding the words “mission accomplished,” of course) that regulators have achieved the purpose for which he came to Washington, generally stabilizing the banking system. President Obama could then nominate a new Treasury secretary who played no role in the bailouts, and who is capable of thinking beyond them. Under the new secretary, the financial reform proposals could be dramatically revised, into a form that is less backward looking, looks less like another handout to Wall Street banks, and is more likely to generate enthusiasm in Congress. (A side note: in my visits to Washington this fall, I have been astonished by the depth of the bipartisan hostility to the Administration’s financial proposals; these debates are very, very different from the healthcare debate).
Unfortunately, I think Secretary Geithner will stick around until after Congress passes financial reforms in 2010, on the view that this too is part of the project for which he came to Washington. If he does, I fervently hope that he doesn’t get what he wants.