Category Archives: Business and economics

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 →

Arkansas Week – Sept. 29, 2017

This week’s Arkansas Week on AETN: Wes Brown with Talk Business & Politics, Jacob Kaufman with KUAR, and Steve Brawner  join host Steve Barnes to discuss health care, Arkansas’ low unemployment rate, the Alabama Senate race, and the Little Rock mayoral race.

 

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 →

Repeal, and then what?

By Steve Brawner

© 2017 by Steve Brawner Communications, Inc.

The Senate health care bill is dead. Senate Majority Leader Mitch McConnell killed it Monday after it did what President Obama couldn’t do – make Obamacare more popular – and after too many Republican senators said they’d vote against it and none expressed enthusiasm for it.

The unenthusiastic included Arkansas Sens. Tom Cotton and John Boozman, who both remained noncommittal even though Cotton was one of 13 Republican senators who wrote the bill behind closed doors.

McConnell’s new plan is to repeal Obamacare now, but it wouldn’t take effect for two years while Congress creates a replacement. In response, Cotton told conservative radio host Hugh Hewitt Tuesday that he was “pleased” with that direction. He said Congress already voted to repeal Obamacare in 2015, a move supported by all six members of Arkansas’ congressional delegation.

Of course, in 2015 everyone knew President Obama would veto the bill. This vote would actually count because President Trump would sign it.

Cotton seems to think this could happen and seems to support it, even though he told “Meet the Press” in January that any repeal vote should include a path forward and that “kicking the can down the road a year or two years is not going to make it any easier to solve.” He told Hewitt that senators who voted once to repeal Obamacare would have no choice politically but to do so again. Boozman also is on board with the idea.

Let’s hope they don’t get that chance.

Here’s the thing about businesses, including health care-related ones such as insurance companies and hospitals: Like a tree growing on the side of a cliff, they can thrive in difficult environments as long as they know the rules. They can make a profit even when taxes are too high, regulations are too onerous, and government is too big.

But it’s much harder to thrive amidst the shifting sands of uncertainty. In that environment, free market providers can’t make business decisions, so they play it safe and wait to see what happens next. If the Affordable Care Act (Obamacare) were repealed with only a vague promise from politicians of something coming later, the entire system would be thrown into disarray, leading insurers to leave markets and making health care more expensive and less available.

Besides, working off a deadline is not exactly Congress’ strong suit these days. Time and again, it’s funded the government through continuing resolutions – spending what it did last year, plus some, because it didn’t have time to do a real budget. It’s repeatedly extended the debt ceiling at the last minute, and it’s delayed important legislation because it couldn’t get its act together. One example: After the No Child Left Behind education law expired in 2007, Congress didn’t do anything about it until 2015, when it finally replaced it.

We can’t have years of limbo with health care, because people will die. If Republicans don’t have an answer seven years after Obamacare was passed, they won’t have one in two more. It’s not hard to foresee an inconclusive election in 2018, and then the two-year deadline passes with no consensus, so there’s a new deadline, and then another.

Since “repeal and replace” is dead and “repeal, then replace” is a terrible idea, what’s left? There’s “return” – just go back to the old system, where insurance companies denied coverage based on pre-existing conditions, set lifetime limits, and cut people off based on technicalities. In other words, sell you insurance as long as you don’t need it. Want to go back?

Instead of repeal, replace or return, there’s a fourth “R” – reform. Change current law  incrementally, and then change it again as needed. This would require a bipartisan approach, along with listening to health care providers and other stakeholders, which did not happen this time. It would anger some supporters and media blowhards, and it would mean accepting that you can’t get everything you want in a democracy. But the health care system would be better.

There is another option, offered by President Trump: Let Obamacare “fail,” and then create a new system.

Presumably, he still could get the health care he needs after the system “fails” and policymakers try to figure out how to pick up the pieces.

The rest of us shouldn’t have to live with such uncertainty. Let’s go with the fourth “R.”

Steve Brawner is an independent journalist in Arkansas. Email him at brawnersteve@mac.com. Follow him on Twitter at @stevebrawner.

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.