Washington’s great ‘undoings’

An update on legal maneuverings that could impact home furnishings

From visions of the utopian omniverse of the past few columns, we turn to the dystopic dumpster fire that is “business as usual” in Washington, D.C.

How much of this administration’s time and efforts and, looking ahead, those of the next will end up having been expended undoing policies, initiatives and executive actions as opposed to making them? This is one of the many costs of such deeply rooted partisanship.

Our courts, too, are busy undoing, particularly at the state level, as various governor-led “remedies” to “problems” of their own invention run up against the U.S. Constitution.

As the leaves fall and we gear up as an industry for a big selling season, let’s take a quick look in on one judicial undoing and a potential executive branch reversal that could end up benefiting furniture importers.

Earlier this month, the U.S. Trade Representative announced that former President Trump’s Section 301 China tariffs are being reviewed. Given mounting evidence that this protectionism has taken a bite out of the GDP, it is surprising the USTR didn’t simply end the tariffs, but the review implies at least the opportunity of a great undoing, either by the USTR or perhaps Congress.

Not surprisingly, polls show that the economy is at the forefront of voters’ minds, giving the Biden administration every incentive to shut down a tariff regime that had done harm to the U.S. economy while failing to deliver any of its promised benefits.

I don’t need to poll furniture importers to know their views on the tariffs. By adding pure cost on the supply side to the tune of 25%, the U.S. government forced furniture importers to choose between raising prices just as a host of other costs were rising or eat the tariffs themselves. More fundamentally, as the teeth of the tariffs sunk in, the migration of manufacturing to countries such as Vietnam accelerated. The past five years have seen a fundamental remapping of sourcing relationships.

Meanwhile, the USTR has been embarrassed before the World Trade Organization’s Court of International Trade. Thousands of companies challenged the tariffs before that court, which ruled in April that the USTR failed to provide adequate justification for the 25% increases.

While domestic producers rightfully want dumping halted and prevented, the Section 301 tariffs affecting more than $300 billion in goods isn’t the right mechanism. In short, like many other protectionist policies, the tariffs have followed the law of unintended consequences, or what Adam Smith called the “invisible hand” of economics.  

The damage is real. Meant to level the playing field, prevent dumping and bring China to the negotiating table, the tariffs have done nothing to hurt Chinese exports overall and, according to the Federal Reserve, conversely they contracted American manufacturing by 2% in terms of numbers of jobs even in their first year. Studies have found a direct connection between the tariffs and reductions in GDP each and every year since their establishment. And China is no nearer the negotiating table than it was four years ago.

Notably, the USTR notice does not include a timeline for the review. This undoing might have to wait a bit longer.

Undoing Florida’s Censorship Regime

(Warning to Bill Napier: Another 10 minutes is at risk!)

In a column that ran in March this year, I pushed back on Florida Gov. Ron DeSantis’ plans to prohibit workplace training that addresses topics such as racism and other forms of discrimination. This summer, that plan became a key piece of Florida’s broader Stop WOKE Act.

In August, a district court ruled the prohibition on mandatory training to be unconstitutional under the First Amendment.

“Normally, the First Amendment bars the state from burdening speech, while private actors may burden speech freely,” wrote U.S. District Judge Mark Walker. “But in Florida, the First Amendment apparently bars private actors from burdening speech, while the state may burden speech freely. Now, like the heroine in ‘Stranger Things,’ this court is once again asked to pull Florida back from the upside down.”

DeSantis and Florida’s Republican-led legislature will have to accept that companies have speech rights just like people, which was the principal takeaway from Citizens United v. F.C.C. in 2010, a Supreme Court ruling DeSantis presumably champions.

We know DeSantis loves Garcetti v. Ceballos, a 2006 high court ruling that deemed an employee’s email communications as speech belonging to his or her employer. It is this ruling he and Florida’s legislature are counting on to uphold another key piece of Stop WOKE, which is the prohibition on professors at public universities in Florida from discussing anything that “espouses, promotes, advances, inculcates or compels” belief relating to a range of race-related topics and ideas.

Thus, the same person is arguing that the state government can censor businesses with respect to workplace training in apparent violation of corporate speech rights while also arguing that professors at Florida’s public universities are employees engaging in speech owned by their employer, the state of Florida. And in this upside-down legal logic, both censorship moves are justified by the pledge that DeSantis and his government will not “sit idly by if you’re trying to circumscribe people’s freedoms.”

While not related to home furnishings in any direct way, the section of the statute gagging educators is particularly problematic for me. This section is being challenged in court by, among others, a law professor of color at Florida A&M’s law school, LeRoy Pernell, which is to say a law school founded in part to counter the effects of segregation. By DeSantis’ and Rufo’s funhouse First Amendment application, professors at FAMU’s law school cannot discuss their own institution’s beginnings as a response to racism without fear of a lawsuit.

Combined, Florida’s statutory initiatives shrink the marketplace of ideas, which is antithetical to more than 100 years of jurisprudence in the area of free expression. This isn’t a partisan position; this is a pro-First Amendment position. As legendary Supreme Court Justice Louis Brandeis wrote in his Whitney v. California decision in 1927, the answer to most problems in American life is more speech, not less.

A love note to Marge Carson

I’ll close with words of appreciation for Jim LaBarge and Marge Carson, a style leader in our industry for nearly 30 years. Earlier this month, Jim announced that cancer is forcing him to shut the company down. The industry loses a crown jewel in terms of product lines and style and taste sensibilities, and in Jim it loses such a positive, visionary force. We wish him well, hoping that the treatments that have sapped his vitality bring him healing and hope.

Shortly after Jim joined Marge Carson in 1994, I visited his Pomona, California, factory on a tour of West Coast manufacturers. I remember the day with crystalline clarity. With a cup of coffee in one hand and the other on the wheel of the rental car, I made my way to meet with Jim. Along the way I heard for the first time through the car radio, “What Sweeter Music,” sung by the Cambridge Singers. The sweeter music mingled with some homesickness but also the fresh hopes of the new day to send me to the side of the road. I sat for the rest of the song, listening with tears of joy and awe.

Upon arrival a few minutes late, Jim asked if everything was OK. So, I told him about the music. He appreciated the sacredness of the moment, and the mood was set. We had a delightful morning together touring some of the most beautiful upholstery the industry has ever known.

Rock House Farm owns the design library of Marge Carson, at least for case goods, so let’s hope Alex Shuford takes good care of Jim’s legacy.

Godspeed to you, Jim. You and Marge Carson will be missed.