Business

Column: What FDR could advise Biden about reforming the Supreme Court — tread lightly

Published

2 hours ago

July 30, 2024

Column: What FDR could advise Biden about reforming the Supreme Court — tread lightly

If it’s true that as Mark Twain supposedly said, history doesn’t repeat itself but it often rhymes, then we are about to embark on a poetry slam for the ages, with the Supreme Court as its theme.

President Biden on Monday unveiled a package of proposals to rein in a court that has seen public confidence reach a low ebb not recorded by the Gallup Organization in readings dating back to 1973.

Most significantly, he is calling for 18-year term limits for Supreme Court justices and the imposition by Congress of binding conduct and ethics rules requiring the justices to “disclose gifts, refrain from public political activity, and recuse themselves from cases in which they or their spouses have financial or other conflicts of interest.”

Term limits would… make timing for Court nominations more predictable and less arbitrary; and reduce the chance that any single Presidency imposes undue influence for generations to come.

— President Biden on his Supreme Court reform plan

He is also proposing a constitutional amendment to neutralize a court decision appearing to give former presidents immunity for crimes committed while in office.

The template for these proposals is Franklin Roosevelt’s 1937 plan to “pack” the court by allowing presidents to appoint a new justice when any sitting justice failed to resign or retire within six months of turning 70, up to a maximum of six new justices.

The manifest goal was to dilute the influence of a cadre or conservative justices who had overruled almost every New Deal law or regulation that had come before them, as well as several other measures.

If FDR could counsel Biden today, he might warn him to move carefully; FDR’s court-packing scheme went down in flames amid congressional opposition, cut deeply into the popularity that had brought him a landslide reelection victory in the 1936 election, and brought the New Deal to a screeching halt. It also represented a moment in which FDR lost his unique ability to gauge the popular mood and act upon it.

The politics of Supreme Court reform today resemble those of 1937 in many ways, though as Twain’s supposed quip suggests, there are significant differences. Let’s look at the differences first.

Roosevelt was then at the outset of his second term, riding high on an electoral victory that may have given him a greater sense of his political omnipotence than he actually possessed. Biden, of course, is less than six months away from the end of his presidency. Roosevelt could look ahead at four more years of policymaking; Biden may be more focused on cementing his legacy of progressive achievements by bequeathing the nation a reformed Supreme Court.

Both presidents may have felt they had nothing to lose by taking on what seemed to be the most revered of the three branches of government, albeit for different reasons — Roosevelt because nothing could chip away at his popularity, Biden because his own term in office can’t be affected by the fate of his reform proposals.

Roosevelt was faulted for springing his scheme on an unsuspecting public and Congress. Notwithstanding public discontent with the court, its reform hadn’t been an issue in the presidential campaign recently ended. FDR had not spoken publicly about the court after a series of anti-New Deal rulings in 1935 and 1936 except after one ruling in which he accused the court of relegating the country to “the horse-and-buggy definition of interstate commerce.”

Instead, he blindsided the nation by announcing his plan in a speech on Feb. 5. To his surprise, voters and legislators — including reliable New Deal supporters on Capitol Hill — reacted with fury.

It was not merely the secrecy in which the scheme had been plotted that its critics found dismaying. FDR’s stated rationale, which was that the aging justices were overworked and needed help to manage their docket, was transparently deceptive.

That rationale might have looked superficially reasonable at first, since the oldest member of the court’s so-called Four Conservative Horsemen, Willis Van Devanter, had been born during the administration of James Buchanan, which supposedly rendered him utterly out of step with the politics of the 1930s.

However, the oldest justice on the court, Louis Brandeis, was even older — at 80, he had been born during the administration of Franklin Pierce, Buchanan’s predecessor, but nevertheless was the court’s liberal lion and not an impediment to the New Deal.

Biden seems to have absorbed the lessons of FDR’s failed effort. He has been telegraphing for weeks that he is contemplating Supreme Court reforms. His proposals are not as radical as expanding the court outright, but they address some of the most evident issues driving the court’s public standing into the sub-basement: a conservative majority that has shown no respect for values and rights long cherished by most Americans, and a record of financial grifting and overt partisanship, chiefly by conservative Justices Clarence Thomas and Samuel A. Alito Jr.

As in 1937, there is a sense that the court has taken aim at progressive principles and laws, running roughshod over individual rights.

The court’s direction has been led by a conservative majority including three judges appointed by Donald Trump — among them Neil M. Gorsuch, who slid into a seat kept open by Senate Republicans’ refusal to even consider Barack Obama’s nomination of Merrick Garland to the late Antonin Scalia’s seat; and Amy Coney Barrett, rushed to confirmation by Senate Republicans in October 2020 only 38 days before the election that would unseat Trump and bring Biden to the White House.

Barrett took the seat vacated by the death of Ruth Bader Ginsburg, one of the most liberal justices ever to sit on the court.

The three Trump judges were in the majority that in 2022 overturned Roe vs. Wade, the decision that had protected women’s reproductive health rights since 1973.

It may be useful to compare the court’s behavior in recent years with what provoked FDR into launching his court-packing scheme.

The court’s distaste for elements of the New Deal was assumed as the Roosevelt administration proceeded to remake the U.S. economy. But it didn’t become palpable until it issued three decisions on May 27, 1935, a date that would become known to progressives as “Black Monday.”

In the first decision, the court overturned Roosevelt’s ouster of a reactionary member of the Federal Trade Commission, placing a limit on a president’s authority over executive officers. The court then invalidated a farm mortgage law because it applied to existing mortgages, not just new ones. Then came the court’s invalidation of the National Recovery Administration, through which the government had tried to regiment competition throughout the economy to help dig the country out of the Depression.

All three decisions were unanimous, but they still signaled that a conservative cadre was poised to undermine New Deal initiatives due to come before the justices. In 1936, the court narrowed the authority of the Securities and Exchange Commission and invalidated a relief program for coal companies. Most significantly, it overturned a New York minimum wage law in a decision known as Tipaldo, after its detestable protagonist, the owner of a laundry who had been cheating his laundresses of their legal wages.

Condemnation of the Tipaldo decision came from across the entire political spectrum. “If this decision does not outrage the moral sense of the country, then nothing will,” FDR’s Interior secretary, Harold Ickes, wrote in his diary. Conservatives were dismayed that the decision undercut their argument that labor rights should remain in the hands of the states — how could that be, if the Supreme Court had overturned a state minimum wage law?

Roosevelt and his fellow progressives foresaw that the court would invalidate the entire New Deal. For a time, FDR seemed content to let that happen, reasoning that it would help him get a constitutional amendment enacted that would allow Congress to save any law the court deemed unconstitutional by reenacting it. If the court kept overturning the New Deal, he reasoned, there would be “marching farmers and marching miners and marching workingmen throughout the land.”

In the end, he chose to go with the court-packing scheme, recognizing that it fit within the constitutional provision giving Congress the unquestioned right to dictate the size of the court.

For many Americans today, the court’s Dobbs decision overturning Roe vs. Wade has supplanted its 1857 Dred Scott decision as the worst in its history. By relegating abortion to a state-level decision, Dobbs has spawned a patchwork of punitive state laws that have life-threatening ramifications for pregnant women (among many other shortcomings).

Public distaste for Dobbs, as was the case with Tipaldo, has been manifest. Since it was handed down in June 2022, every single state initiative to protect women’s reproductive rights has prevailed at the ballot box. The chief weapons in the antiabortion camp’s quiver have been efforts to stymie referendum and initiative votes by changing the ballot box rules, as has been tried in Florida and Ohio.

Biden’s proposal to establish staggered 18-year terms for justices has several virtues. One is that it would rebalance a court on which GOP appointees are arguably overrepresented. From 1960 through this year, Republicans held the White House for 32 years and Democrats for 31, almost an even split. But in that period, Republicans have appointed 15 justices and Democrats only ten. Under Biden’s proposal, every president would have the opportunity to appoint two justices during each four-year term.

“Term limits would … make timing for Court nominations more predictable and less arbitrary; and reduce the chance that any single Presidency imposes undue influence for generations to come,” the Biden White House says.

The one flaw in the proposal is that it could require a constitutional amendment. The Constitution states that federal justices may serve “during good behavior,” but expert opinion is divided over whether that bars Congress from imposing any other conditions on their service.

It’s worth noting that the Supreme Court was so unnerved by the groundswell of criticism it faced after Tipaldo that Chief Justice Charles Evans Hughes engineered an about-face, orchestrating a 5-4 opinion upholding a Washington state minimum wage law that was almost identical to the New York law it had overturned, also by 5 to 4. That helped to take the wind out of FDR’s scheme. The change would forever be known as “the switch in time that saved nine.” The court never overturned another New Deal initiative.

But few such opportunities for an about-face are on the horizon. The damage this court has done to individual rights and the rule of law is manifest. Biden’s sense is that the time is ripe for reform, and that this time the public may go along.

Business

As competitors falter, SoCal's Skechers is surging with strategy of 'try and try again'

Published

9 hours ago

July 30, 2024

Press Room

As competitors falter, SoCal's Skechers is surging with strategy of 'try and try again'

In a crowded sneaker market roiled by the stumbles of its longtime king, Manhattan Beach-based Skechers has been climbing its way up the ranks.

While Nike, which has dominated the athletic footwear landscape for years, made headlines last month for its plummeting stock price and gloomy outlook, Skechers announced record sales in the first quarter of 2024 of $2.25 billion, a 12.5% increase over last year. Since 2019, it has increased its annual revenue by more than 50%.

In June, Bank of America upgraded its rating on Skechers’ stock to a strong buy, and this week Morgan Stanley followed suit — notable votes of confidence in the fundamentals of a company that has seen its stock price rise more than 20% over the last year. Shares closed at $65.10 on Tuesday.

Analysts and company leadership attribute the brand’s success to a strategy built around constant innovation and a diverse array of footwear products. Sam Poser, a footwear and apparel analyst at Williams Trading, said Skechers is navigating choppy waters better than its rivals.

“It’s not like the macro environment is different for Skechers than it is for Nike or New Balance or Adidas,” Poser said. “One of the reasons they’re outperforming is because they’re executing in this difficult environment.”

While Skechers offers a wide variety of footwear — from soccer cleats to work boots to summer sandals — it has still managed to find a strong company identity, Poser said.

2 A customer tries on footwear

3 Children's shoes on display at the Skechers store.

1. Skechers and Snoop Dogg collaborated on shoes. 2. Skechers offers a wide variety of footwear — soccer cleats, work boots, summer sandals and more. 3. Children’s shoes on display at the Skechers store in Manhattan Beach. (Christina House / Los Angeles Times)

“Skechers owns the comfort business,” Poser said. “What they’re doing is bigger than I think a lot of people appreciate.”

Skechers brought in $8 billion in sales in 2023 compared with $7.4 billion in 2022. The company has a near-term goal of reaching $10 billion in sales by 2026, said Chief Financial Officer John Vandemore.

The self-proclaimed “comfort technology company” has seen success with recent releases such as Hands Free Slip-ins and podiatrist-certified Arch Fit shoes. Its website lists 14 different footwear technologies, with names like Glide-Step and Hyper Burst.

“You have to be innovative and you have to deliver newness,” Vandemore said in an interview. “There was no analogy in the marketplace when we started Slip-ins, and it’s done exceedingly well.”

The company is scheduled to announce its second-quarter results on Thursday, with analysts estimating revenue of $2.21 billion, up 10% from the same period a year ago, and earnings of 92 cents a share, down 6.1% from a year earlier, according to Zacks Equity Research.

Not all of Skechers’ gambles have paid off, Vandemore acknowledged. Introduced in 2009, Shape-up sneakers were immensely popular until the company was sued by the Federal Trade Commission over its claims that the shoes would help customers lose weight and tone their muscles. Skechers paid $40 million to settle the class-action lawsuit in 2013.

Other Skechers models have seen longer-term success, such as the children’s line of light-up Twinkle Toes sneakers, introduced in 2008 and still widely available.

Caleigh Hopson, 7, browses shoes with her mother Laura.

“I think that willingness to try and try again until you succeed is noteworthy and it’s led to a significant amount of success,” Vandemore said. He praised the company’s chief executive, Robert Greenberg, for his willingness to take risks.

“One of Robert’s key talents is being able to tolerate risks and, quite frankly, not dwell upon them,” Vandemore said. “In our culture we try a lot of different things. Some of them work and some of them don’t.”

In contrast, Poser said, Nike has not been able to come up with fresh offerings for consumers in recent years.

“Nike was not innovating enough and putting a lot of non-compelling product into the marketplace,” he said.

When Nike released its tepid first-quarter earnings report in March, its chief financial officer, Matthew Friend, said the company was “taking action to build a faster, more efficient Nike and maximize the impact of our new innovation cycle.”

Along with a pipeline of new products, Vandemore said, value and affordability are among the brand’s top priorities. Several models featuring the popular Slip-in technology are available for less than $100.

“They’re delivering a quality product that has comfort and style at a reasonable price,” said Jim Duffy, a sports and lifestyle analyst at Stifel. “In an environment where the consumer is facing pressures to their discretionary spending capacity, Skechers is doing a very good job of offering value.”

In a trend brought on by COVID-19, Duffy said, more consumers of all income levels are buying and wearing athletic footwear. A nice dinner out may have required dress shoes before the global pandemic, he said, but standards have changed.

“COVID was an accelerator for casualization and that’s really expanded the wearable occasions for sneakers and comfort footwear,” Duffy said. “Skechers has done well to capitalize on that.”

Skechers’ customer base is mostly children and older adults, Duffy said, not teens and young adults. But Poser said the customer demographic varies largely across markets, both in the U.S. and internationally.

“It’s much broader than you think,” Poser said. “They have K-pop bands wearing their shoes.”

Last year, international sales accounted for 62% of the company’s global revenue. Vandemore said Skechers’ investment in growing its international footprint has provided the company an important boost in growth.

Store manager Diane Morales unboxes a pair of shoes for a customer.

At the end of March, the company had slightly more than 1,100 international stores, 565 domestic locations and more than 3,500 “distributor, licensee and franchise stores,” according to company figures. The corporate offices in Manhattan Beach house 1,280 employees.

Vandemore also said the company’s balance of wholesale and direct-to-consumer sales set it apart from other brands in the industry.

“Some of our competitors have chosen to primarily focus on their own stores or their own online sales at the expense of wholesale partners, which is not our strategy,” Vandemore said. “We embrace all avenues.”

In 2023, 44% of Skechers’ annual profits came from direct-to-consumer sales and 56% came from wholesale business.

Looking to the future, Vandemore said Skechers will stick to its core strategy while adapting to new trends and demands.

“We’ve been very successful focusing on developing and delivering great products, growing our direct-to-consumer channel and growing internationally,” he said. “That formula, we do believe, will continue to yield results.”

Business

More than 50 Big Lots stores to close in California

Published

17 hours ago

July 29, 2024

Press Room

More than 50 Big Lots stores to close in California

Big Lots, the discount retail chain known for carrying a wide assortment of goods, is closing more than 50 stores in California amid flagging sales that have thrown the chain’s future into question.

In a June filing with the Securities and Exchange Commission, the company said it expects to close 35 to 40 stores in 2024. However, according to closure notices on individual store websites, the actual number will be higher.

Big Lots currently operates 109 stores in California, the second highest in the country behind Texas. There are about 1,400 Big Lots nationwide. The chain is known for offering an extensive and somewhat eclectic collection of items at low prices, including brand-name goods and discount products.

“Our customers may be on a tight budget,” the Big Lots website says, “or they may just enjoy our treasure-hunt atmosphere.”

Big Lots, however, has been struggling. The company reported a net loss of $205 million in the quarter ending May 4 — similar to the $206-million loss it posted for the same period last year. Net sales of around $1 billion in the quarter marked a 10% decrease compared with the same period last year.

Those losses, the rate at which the company has spent down cash reserves in recent years, and gloomy projections for the future “raise substantial doubt about our ability to continue as a going concern,” the company wrote in the filing.

Shares of the company closed Monday at $1.04, a nearly 87% decline from the start of the year.

Inflation and rising costs of goods have put pressure on retailers as many customers, especially those on a tight budget who may be drawn to discount chains such as Big Lots, limit their spending.

This year, California-based 99 Cents Only Stores announced the closure of all 371 of its locations, citing inflation and changes in consumer demand.

“We missed our sales goals due largely to a continued pullback in consumer spending by our core customers, particularly in high ticket discretionary items,” Big Lots President Bruce Thorn said in a statement. “We remain focused on managing through the current economic cycle by controlling the controllables.”

According to KTLA-TV, these are the California Big Lots stores marked for closure.

•Anaheim: 1670 W. Katella Ave.; Anaheim, CA 92802
•Anaheim: 6336 E. Santa Ana Canyon Road; Anaheim, CA 92807
•Atascadero: 2240 El Camino Real; Atascadero, CA 93422
•Atwater: 1085 Bellevue Road; Atwater, CA, 95301
•Bakersfield: 1211 Olive Drive; Bakersfield, CA 93308
•Bakersfield: 2621 Fashion Place; Bakersfield, CA 93306
•Beaumont: 1782 E 2nd Street; Beaumont, CA 92223
•Camarillo: 353 Carmen Drive; Camarillo, CA 93010
•Santa Clarita/Canyon County: 19331 Soledad Canyon Road; Canyon County, CA 91351
•Chico: 1927 E 20th Street; Chico, CA 95928
•Concord: 2060 Monument Boulevard; Concord, CA 94520
•Corona: 740 N Main Street; Corona, CA 92880
•Culver City: 5587 Sepulveda Boulevard; Culver City, CA 90230
•Delano: 912 County Line Road; Delano, CA 93215
•El Cajon: 1085 E Main Street; El Cajon, CA 92021
•Fairfield: 1500 Oliver Road; Fairfield, CA 94534
•Folsom: 9500 Greenback Lane, Ste 22; Folsom, CA 95630
•Fresno: 7370 N Blackstone Avenue; Fresno, CA 93650
•Gilroy: 360 E 10th Street; Gilroy, CA 95020
•Hercules: 1551 Sycamore; Hercules, CA 94547
•Indio: 42225 Jackson Street, Ste B; Indio, CA 92203
•La Mesa: 6145 Lake Murray Boulevard; La Mesa, CA 91942
•Livermore: 4484 Las Positas Road; Livermore, CA 94551
•Lompoc: 1009 N H Street, Ste M; Lompoc, CA 93436
•Long Beach: 2238 N Bellflower Boulevard; Long Beach, CA 90815
•Los Banos: 951 W Pacheco Boulevard; Los Banos, CA 93635
•Manteca: 1321 West Yosemite, Avenue; Manteca, CA 95337
•Merced: 665 Fairfield Drive; Merced, CA 95348
•Milpitas: 111 Ranch Drive; Milpitas, CA 95035
•Modesto: 3900 Sisk Road; Modesto, CA 95356
•Oceanside: 1702 Oceanside Boulevard; Oceanside, CA 92054
•Ontario: 4430 Ontario Mills Parkwasy; Ontario, CA 91764
•Placerville: 47 Fair Lane; Placerville, CA 95667
•Rancho Santa Margarita: 30501 Avenida De Las Flores; Rancho Santa Margarita, CA 92688
•Redlands: 810 Tri City Center; Redlands, CA 92374
•Riverside: 2620 Canyon Springs Parkway; Riverside, CA 92507
•Rohnert Park: 565 Rohner Park Expressway; Rohner Park, CA 94928
•Sacramento: 6630 Valley Hi Drive; Sacramento, CA 95823
•Sacramento: 8700 La Riviera Drive; Sacramento, CA 95826
•Salinas: 370 Northridge Mall; Salinas, CA 93906
•San Bernardino: 499 W Orange Show Road; San Bernardino, CA 92408
•Santa Clara: 3735 El Camino Real; Santa Clara, CA 95051
•Santa Maria: 1417 S Broadway; Santa Maria, CA 93454
•Santa Paula: 568 W Main Street, Ste B; Santa Paula, CA 93060
•Santa Rosa: 2055 Mendocino Avenue; Santa Rosa, CA 95401
•Simi Valley: 1189 Simi Town Center Way; Simi Valley, CA 93065
•Stockton: 2720 Country Club Boulevard; Stockton, CA 95204
•Temecula: 27411 Ynez Road: Temcula, CA 92591
•Tracy: 2681 N Tracy Boulevard; Tracy, CA 95376
•Turlock: 1840 Countryside Drive; Turlock, CA 95380
•Ukiah: 225 Orchard Plz; Ukiah, CA 95482
•Vacaville: 818 Alamo Drive; Vacaville, CA 95688
•Visalia: 2525 S Monney Boulevard; Visalia, CA 93277
•Woodland: 52 W Court Street; Woodland, CA 95695

Business

SpaceX moving Dragon recovery to California waters

Published

24 hours ago

July 29, 2024

Press Room

SpaceX moving Dragon recovery to California waters

SpaceX’s Dragon spacecraft will take a new route home beginning next year after the company announced it will move its splashdowns back to the waters off California next year.

Long Beach Mayor Rex Richardson said Sunday on X that the city’s port would be the new home for SpaceX’s recovery operations.

“Excited to share a Space Beach update! Long Beach will be the new home to @SpaceX’s Dragon recovery vessel as their West Coast Recovery Operations team based out of the @portoflongbeach will welcome back both @NASA and other private astronauts who are returning to Earth from orbit and beyond,” Richardson wrote.

The announcement comes just a few weeks after SpaceX founder Elon Musk announced he is moving the headquarters of both the Hawthorne-based SpaceX and X, the social media platform formerly known as Twitter, to Texas — citing several criticisms he has of California and doing business in San Francisco.

Moving the splashdown sites from off of the Florida coast to California was necessary to address concerns over debris from Dragon that has crashed to earth on previous missions.

The Dragon, which has carried astronauts and cargo into space on more than three dozen flights since 2012, has two main sections — the capsule that carries people and cargo, and an expendable part called the trunk.

In 2019, SpaceX moved the Dragon’s splashdowns from the west coast to Florida, a move that allowed “teams to unpack and deliver critical cargo to NASA teams in Florida more efficiently and transport crews more quickly to Kennedy Space Center,” the company said in a statement on its website. As part of that move, the company developed a new way of dealing with the trunk, detaching it from the capsule while it was still in orbit. Engineers calculated that the trunk would completely burn up as it fell from orbit and through the earth’s atmosphere. However, pieces of the trunk have been found in Australia and elsewhere, forcing SpaceX back to the drawing board.

When splashdowns in the Pacific begin next year, the trunk will remain attached to the capsule until after the spacecraft has left orbit, allowing SpaceX to control its descent into the ocean away from land, the company said.