Category Archives: Business

Little Rock’s base hit

By Steve Brawner

Let’s start with two assumptions. One is that we live in an attention-based economy where having a message isn’t enough if no one notices it. The other is that what’s good for Little Rock is generally good for Arkansas.

Which brings us to the capital city’s “rejection” of Amazon.

You may be familiar with the story. The Seattle-based tech giant announced it is opening a second headquarters and invited communities to apply. (Which of course would include offering generous tax breaks and government subsidies). The company promised to hire 50,000 workers, many of them highly paid, and invest $5 billion. The winner will be transformed, as Seattle has been, which is why 238 cities have submitted applications.

Little Rock Mayor Mark Stodola, facing a tough re-election campaign against two credible opponents so far, initially said his city would apply. But Little Rock didn’t meet some of Amazon’s specifications, and it was obvious the city couldn’t compete against places like Boston and Austin, Texas, that are bigger and cooler. Continue reading Little Rock’s base hit

If you’re going to be offended by the NFL, these are better reasons

NFLBy Steve Brawner

It’s not surprising that people are offended seeing NFL players kneeling during the national anthem. After all, if it weren’t offensive, the players wouldn’t make a statement by doing it.

But many other things are happening in that stadium that are more offensive.

Let’s start with the fact that as paying customers and TV viewers, we’re watching, and encouraging, young men as they suffer permanent brain injuries.

Chronic traumatic encephalopathy, or CTE, is a degenerative disorder that has been found in the brains of numerous deceased players. The latest was Aaron Hernandez, 27, who killed himself in his jail cell while serving a life sentence for murder. The disease robs its victims of years of their lives, while wives and other family members bear a terrible burden caring for them.

The link between the game and the disease cannot be denied. But the NFL, in the finest tradition of the tobacco industry, did exactly that until 2016 after settling a lawsuit with former players.  Continue reading If you’re going to be offended by the NFL, these are better reasons

Lawyers vs. legislators

By Steve Brawner
© 2017 by Steve Brawner Communications, Inc.

It could be argued that two of the three most important votes this year in Arkansas state politics occurred Feb. 16 and Feb. 27, and the third will occur this Friday.

The first two votes are when the Arkansas Senate and Arkansas House advanced a proposed constitutional amendment limiting lawsuit awards. We voters will decide its fate in the November 2018 elections.

The third will be in Hot Springs June 16, when the Arkansas Bar Association’s House of Delegates votes on whether to pursue a dueling proposal barring such lawsuit limits that also would appear on the November 2018 ballot.

The one proposed by legislators would limit punitive damages in civil lawsuits to the greater of $500,000 or three times the compensatory damages awarded in the case, except when the harm was caused intentionally. Noneconomic damages, sort of a vague term, would be limited to $500,000. The Legislature would be empowered to increase both of those amounts with a two-thirds vote. Lawyers’ contingency fees would be limited to one-third the judgment.

The amendment is supported by powerful groups, including the Arkansas State Chamber of Commerce and those representing health care providers. They want to reduce the risk of jackpot jury verdicts that produce a climate of uncertainty, raise insurance rates, and require costly cover-your-rear actions ultimately paid by consumers and resulting in lost jobs. If your local hospital no longer delivers babies, it’s because the insurance is too high and the fear of a lawsuit is too great.

Opponents, including the Arkansas Bar Association, which represents attorneys, of course don’t see it that way. They say juries should be trusted, not limited, and that the awards prescribed by the amendment are so low that big, bad actors won’t be deterred from harmful activities. They say the upfront costs of lawsuits can be daunting with no guarantee of a payout, so capping attorneys’ fees will make it harder for Arkansans to find a lawyer willing to represent their case.

This already was going to be a heavyweight brawl between two groups with access to money and reasons to spend it. Aside from the legitimate philosophical differences, we’re talking about rich people’s livelihoods – those of business executives and medical providers who say enough is enough, and those of attorneys whose bottom lines would be significantly shortened. So Arkansas voters next year presumably will see plenty of 30-second ads defining the bad guys (evil corporations or unscrupulous lawyers, depending on who is funding the spot) and the heroes/victims (average Arkansans, either way).

But then the Arkansas Bar Association came up with another idea – pass its own, equally far-reaching amendment. It would do away with all the caps included in the Legislature’s measure while also taking more than a few shots at the legislators themselves – increasing transparency for campaign contributions, prohibiting legislators from directing how state funds are spent locally, reducing their authority over state agency decisions, and increasing the number of votes needed to override a governor’s veto from the current simple majority to two-thirds.

An added twist occurred last week, when the State Chamber’s President and CEO, Randy Zook, sent a letter to its members asking them to encourage their hired law firms to vote against the measure.

On Friday, the ABA’s House of Delegates will vote on whether to pursue the amendment, which its Legislation Committee unanimously endorsed.

The pluses? As a political strategy, the amendment would enable the ABA to play offense rather than just defense. Also, instead of the campaign being mostly lawyers vs. business owners and doctors, it also would be a more winnable lawyers vs. legislators.

But unlike the Legislature’s amendment, getting the proposal on the ballot would require supporters to collect 84,859 signatures, which would cost millions of dollars and inevitably lead to a lawsuit by opponents hoping to block the measure.

Things will get really interesting if they’re both on the ballot. One limits jury awards. The other says jury awards can’t be limited. One or the other could pass. If they both pass, the one with the most votes wins. If neither passes, things stay the same – meaning no lawsuit limits.

That means the Bar Association would have more paths to victory than the Chamber-supported amendment. Not necessarily better, but more.

Castro’s death moves Cuba farther into the market for Arkansas rice, ideas

By Steve Brawner
© 2016 by Steve Brawner Communications, Inc.

Fidel Castro is dead. How does that affect people in Arkansas? Maybe a lot, especially if they work in the rice industry or are elected to represent people who do.

Cuba’s 11 million people import 400,000 tons of rice each year, mostly from Vietnam, which means the rice arrives after a long boat ride from a country on the other side of the globe. Rep. Rick Crawford’s eastern Arkansas 1st District includes half of America’s rice acreage, so it’s understandable that his reaction to Castro’s death focused on the future, not the past.

“Fidel Castro’s death is an opportunity for America to end its ineffective policies so we can influence the future direction of that nation,” he tweeted, then added, “Through my own visits to Cuba I’ve seen people ready for change. With Fidel dead, America needs to help lead Cuba toward a better future.”

Crawford for some time has been an outspoken supporter of prying open Cuba’s markets, which have been largely closed since Oct. 19, 1960, because of the American trade embargo. He’s pushed legislation to allow Cubans to purchase agricultural products on credit rather than the currently required cash, of which Cubans don’t have much, so they could replace that Vietnamese rice with fresher, cheaper rice grown here.

Two other Arkansas officials who represent those same eastern Arkansas agricultural producers (and voters) took a similar forward-looking approach. Sen. John Boozman tweeted, “I hope the death of Fidel Castro marks a new beginning for an American-Cuban partnership and brings light to democracy in #Cuba.” Speaking to reporters, Gov. Asa Hutchinson called Castro’s death a “moment that I believe needs to be seized.”

President-elect Donald Trump said he would terminate the current opening with Cuba initiated by President Obama unless Cuba makes a better deal for its own people, for Cuban-Americans, and for the United States. That threat may have just been the country’s new dealmaker-in-chief doing what he does, which is start the negotiating process by taking a hard line and then moving away from it.

In response, the governor said Trump’s stance is “understandable,” but while change must be accompanied by enhanced freedom for Cubans, “I hope that we do not go back to the simple, straightforward, rigid embargo that we have tried for 50-plus years.”

Hutchinson and Boozman represent the state while Crawford represents his district, so their remarks were meant for those audiences. Sen. Tom Cotton has an additional audience – a national one. It includes many people who, like him, have argued that this thawing of relations between America and Cuba will only help the Castro regime. Cotton released a two-sentence comment focused on the past, except for one assertion of Castro’s future: “Fidel Castro created hell on earth for the Cuban people. He will now become intimately familiar with what he wrought.”

Count me with Crawford, Boozman and Hutchinson on this one. The American people are supposed to be practical-minded problem-solvers who, when something doesn’t work, try something else. We’re the country where Thomas Edison invented the light bulb through experimentation, failure and more experimentation. And yet when it comes to its Cuba policy, we’ve stubbornly tried the same thing for 56 years that clearly didn’t work. Only old age and death, not the American trade embargo, removed Castro from power. Now his brother, Raul, remains in charge. He’s 85, by the way.

Pry open the doors to Cuba, let in a little freedom, and see what happens. Arkansas rice will be more than just an item on the dinner table. It will be a taste of what a free market economy offers. As Cuba opens itself to visitors from Arkansas and elsewhere, it will not be able to choke off ideas that are contrary to its glorious revolution. Fifty-five years after the failed Bay of Pigs invasion, an army of businessmen, tourists and missionaries will descend on an island 90 miles from Florida, accomplishing what the embargo never could.

Somebody’s going to sell rice to the Cubans, and when they do they’ll also export their ideas and way of life. Currently, that exporter is Vietnam, another repressive communist regime. I think Arkansas offers a better deal.