Author Archives: sdiamond

Witness to a Counter-Revolution

A review of William B. Gould IV, Those Who Travail and Are Heavy Laden: Memoir of a Labor Lawyer (WPI Press, 2025)

By Stephen F. Diamond*

In the summer of 1961, William B. Gould IV arrived at the United Auto Workers’ Solidarity House as a young lawyer fresh out of Cornell Law School, hired into the union’s legal department. The UAW was then, arguably, the most powerful industrial union in the world, led by its progressive founder Walter Reuther. Its legal department had a reputation to match. Private-sector union density in the United States, however, had peaked at just under thirty-five percent only seven years earlier — a high-water mark it would never approach again.

The dismantling of the New Deal labor order the UAW had helped create was already well underway. The Taft-Hartley Act of 1947, the employers’ counterattack on the Wagner Act, had been law for fourteen years. Operation Dixie, the post-World War II effort of the CIO to organize the South, had collapsed by 1953. Cold War purges had stripped many unions of some of its most militant organizers. The 1955 AFL-CIO merger papered over internal tensions that led Reuther’s UAW to break with the Federation in 1968. And the racial exclusions written into New Deal legislation remained intact: agricultural and domestic workers were excluded from the Wagner Act and the Social Security Act to secure Southern Democratic support.

Bill Gould’s more than 60 year legal and academic career, then, began near labor’s peak and survived during its long structural retreat. His rich memoir records a lifetime spent working inside institutions whose foundations had, in retrospect, begun to weaken long before he entered them. In Those Who Travail he records his effort over six decades to expand what was possible and preserve some of what remained.

An African-American Lineage

The book’s title comes from both Matthew and the Episcopal Book of Common Prayer: “Come unto me all that travail and are heavy laden, and I will refresh you.” Gould’s great-grandfather, an escaped slave who served in the Union Army, would likely have known the passage by heart, and Gould himself absorbed it as a young choirboy:  “These words soon became integrated into my view of the Church, and the need to protect the masses, our people, and all who were ‘heavy laden[,]’” Gould writes. “And subsequently they fused, in my mind, with the Court’s Brown [v. Board of Education] ruling condemning segregation. If I have been able to make any contribution to workplace fairness, its origin and impetus are to be found in these experiences.” (52) Gould, then, became a labor lawyer heavily influenced by the Episcopal tradition his family had followed since Reconstruction. He entered the labor movement just as its Black civil-rights wing (including figures like A. Philip Randolph and Bayard Rustin through organizations like the Negro American Labor Council) was demanding that largely white-led industrial unions (including the UAW) live up to the movement’s promise, arguing that race and class were the same fight.

Gould’s strategic skepticism

From Solidarity House, Gould’s path was far from a straight line into academia. A formative year studying under Otto Kahn-Freund at the London School of Economics—which helped shape his skepticism about the American legal system’s over-reliance on labor law—was followed by early stints at the NLRB in Washington, D.C., and in private practice in New York City. He joined the law faculty at Wayne State, where he would remain near to both the UAW and a large Black workforce. His ties to Detroit would remain strong even after his appointment as Stanford Law School’s first Black faculty member.** Unsurprisingly, perhaps, he soon found himself acting pro bono in a decade long court battle against Detroit Edison on behalf of a class of black workers challenging discriminatory treatment. The $4 million in punitive damages eventually awarded, The New York Times said, “was believed to be the largest yet made for punitive damages since the Civil Rights Act of 1964” had been passed. While the appellate court reversed, a Supreme Court holding meant to rein in Title VII claims shifted the matter from a class action to individual hearings. Fearing significant costs to litigate hundreds of claims individually Edison settled, netting millions for Gould’s clients.

The reversal, though, marked an important shift: federal courts began narrowing Title VII just as Black workers appeared, finally, to be gaining a stable place in industrial America. Gould’s first book, Black Workers in White Unions (1977), remains an essential account of what produced that outcome, including segregated locals, exclusively white craft unions, and seniority systems that only hardened past discrimination. These were features not bugs, as we now say about so much of high tech’s malware. Gould tells a revealing story about asking a union lawyer involved in a Seattle Building Trades dispute that Gould explored as a possible precedent to use in Detroit. Gould wondered how the consent decree issued there — the first comprehensive antidiscrimination order against the construction trades — was working. “Fine,” came the reply.” “Are many Blacks getting jobs?” Gould asked. “No.” “This was the problem,” Gould concluded. (188)

Gould resists the liberal temptation to treat his own rise as proof that the system worked. He is candid that doors opened to him because “the cities burned in the 1960s,” and that they later closed again. (xvi) The material on his post-George Floyd assignment from San Francisco Mayor London Breed — racial audit of the city’s municipal workforce — one of the book’s most poignant, because it shows an eighty-five-year-old labor lawyer being asked in 2021 to do for one city’s payroll what he had been trying to do for the country since 1965. For Gould this assignment recalled earlier efforts in the wake of the 1960s civil rights movement when a similar albeit national study warned that “our nation is moving toward two societies, one black, one white – separate and unequal.” (459) A change in the black letter law had not been realized in the world at large. This is Gould’s argument across six decades: law is “only a factor,” and lawyers and legal academics who think otherwise have been misled by their own subject matter. The real terrain is the political economy beyond the courtroom.

That argument structures the long central chapters on the NLRB. Gould arrived as chair in 1994 with a reform agenda centered on the Board’s underused injunctive power found in Section 10(j) of the National Labor Relations Act and on rebuilding an agency damaged by the Reagan and first Bush years. He encountered a Gingrich Congress that treated the Board as a political target, an employer bar led by a new generation of union busting law firms that had learned to weaponize the Board’s own delays, and a Democratic White House whose commitment to labor was, by his account, intermittent. His pages on the Caterpillar and Detroit Newspapers strikes show what is now widely recognized: the Mackay Radio permanent-replacement doctrine had evolved from a Depression-era oddity into a license for employers to turn every economic strike into a war of attrition unions could not win. Gould’s chairmanship coincided with the years in which private-sector union density slid below ten percent and kept dropping; today it sits at roughly six. He was an unusually able administrator of a statute that no longer fit the economy it had been written to govern.

Baseball runs through it all. Gould has been a Boston Red Sox fan since childhood and a Stanford sports-law teacher who brought Willie Mays into his classroom and prizes the baseball glove Mays sent him after the visit. His single most visible act as NLRB chair was the 1995 intervention that helped end the players’ strike: the injunction his Board authorized, issued by then-District Judge Sonia Sotomayor, sent the owners back to the bargaining table and the camps back open. Baseball was one corner of the American economy where union labor retained real leverage across Gould’s lifetime, because players cannot be easily replaced and certainly not permanently. It is among the few labor regimes the employer counterattack failed to break, and Gould played a key role in keeping it intact.

The California chapters — on his chairmanship of the Agricultural Labor Relations Board in his eighties during Jerry Brown’s third and fourth terms — recount a period of Gould’s career that few seem to know about. Yet, he is the only person to have served as chair of both the NLRB and its California cousin, the Agricultural Labor Relations Board. The ALRB was created to bring farmworkers, whom the Wagner Act had excluded as part of the price of its passage, under a state labor regime. Gould arrived four decades after Brown signed the law and found that “the dream had become a nightmare”: a “moribund” UFW “with no interest in organizing the unorganized,” an industry artful in using delay to demoralize organizers, and a state government whose attention had shifted elsewhere. That Gould and the board pushed through mandatory mediation and related enforcement measures was a real achievement. That this counts as one of the most consequential labor-law reforms of the past quarter-century shows just how far the movement has receded.

Looking ahead

 The 2023 strike wave that Gould describes with measured enthusiasm—the UAW under Shawn Fain, the Teamsters at UPS, the writers and actors, the hotel workers—arrived, as he notes, without any of the labor-law reform his generation had pursued for seven decades. The Labor Law Reform bill of 1978, the Workplace Fairness Act, the Employee Free Choice Act, the PRO Act: all were defeated at the same Senate chokepoint, because the Democratic Party could no longer assemble either the votes or the donor base. The labor liberalism Gould embodies — patient, lawyerly, faithful to the New Deal compact and to the party that administered it — was a legacy nonetheless worth defending. These institutions made American working people, including many if not all Black workers, into something close to equal citizens for a few decades in the middle of the twentieth century. No doubt Gould would agree, however, that a legacy is not a strategy. The employer class that imperfectly accepted the New Deal settlement has unequivocally abandoned it. Thus, the task of resurrecting a new democratic institutional framework against that same employer class falls to the rank-and-file insurgencies Gould introduces here with appropriate, if brief, respect.

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*Associate Professor of Law, Santa Clara University School of Law.

**It was at Stanford that I first met Gould in the mid-1980s while I was a union activist. His marvelously chaotic office, filled with hundreds of papers and books strewn about in an order that only Gould seemed to understand, triggered in me a wish to transition from the labor movement to legal academia.

The Purity Spiral: What DSA Forgot About Winning

How the obsession with an anti-Zionist litmus test is fracturing the American Left, and what we can learn from the undisputed masters of socialist electoral strategy: the German SPD of 1890–1914.

If you want to understand the current battle underway within the Democratic Party due to the Democratic Socialists of America (DSA) campaign strategy, look no further than the recent, baffling decisions of DSA to alienate their most successful champions.

In a moment when working-class Americans are desperate for economic relief, universal healthcare, and robust labor protections, the DSA leadership has increasingly decided that the true measure of a socialist is not their commitment to the working class, but their absolute adherence to a militant anti-Zionist litmus test.

This culminated in July 2024 when the national DSA withdrew its conditional endorsement of Representative Alexandria Ocasio-Cortez—arguably the most prominent and effective democratic socialist in modern American history. Her crime? She hosted a nuanced panel discussion on combating antisemitism with Jewish experts, co-signed a statement supporting defensive missile systems like the Iron Dome, and voted for a resolution condemning the denial of Israel’s right to exist—a resolution that passed the House 412 to 1. The internal warfare has only escalated since: a resolution to censure her, accusing her of “tacit support for Zionism,” was introduced at DSA’s 2025 national convention and still sits before the national leadership.

This is not strategy. This is a purity spiral. It is the behavior of a niche ideological club or sect that has given up on governing and prefers the moral comfort of perpetual marginalization.

For the new generation of socialists who genuinely want to build power and change material conditions, this self-immolation is tragic. But one does not have to reinvent the wheel to figure out how to do this right. One simply needs to look back at the most spectacularly successful socialist political machine the world has produced: the German Social Democratic Party (SPD) between 1890 and 1914.

The historical SPD did not win by purging its allies over single-issue foreign policy tests. They won through relentless organizing, deep community building, and a ruthless, pragmatic electoral strategy that the modern DSA desperately needs to relearn.

The Erfurt Synthesis: Balancing Theory and Reality

When the SPD was finally legalized in 1890 after twelve years of severe state repression under Bismarck’s Anti-Socialist Law, they faced a massive dilemma: How do you maintain a revolutionary Marxist ideology while operating within a deeply conservative, capitalist empire?

Their answer was the 1891 Erfurt Program, a brilliant act of political duality that the historian Carl Schorske called the “Erfurt synthesis.”

The first half gave the radical base what they wanted: sweeping Marxist theory declaring the inevitable collapse of capitalism. But the second half—the actual marching orders for the party—was entirely pragmatic. It laid out a series of immediate, concrete democratic demands: an eight-hour workday, expanded social insurance, the extension of suffrage to women and to the state elections still rigged by class-based franchises, and the right to unionize.

The SPD understood a fundamental truth that the modern DSA seems determined to ignore: You cannot feed the working class with ideological purity.

They did not demand that every voter or allied politician pass a rigorous test on Marxist dialectics. They united a massive coalition around tangible, material improvements to workers’ daily lives. By focusing relentlessly on these “minimalist” goals, they built trust—and where a hostile Imperial state blocked them from writing their demands into law, they delivered through institutions of their own.

(The Social Democratic Party’s breakthrough in the Reichstag elections of February 20, 1890, is trumpeted in this facsimile of the front page of the party’s leading newspaper, Der Sozialdemokrat, on March 8, 1890. By that point, it was known that the SPD had won 20 Reichstag seats in the main elections and an additional 17 seats in the run-off ballots held in the intervening weeks. For the first time in its history, the SPD had garnered more votes—over 1.3 million—than any other party. The central figures hold a banner that reads: “Despite everything, the world is ours!” The title of the poem at the bottom, “The First Act,” conveys the same message: this victory is only “the first act” leading to still greater socialist triumphs in the future.)

And here is the detail the modern DSA should find most uncomfortable: the SPD did carry out a famous purge at Erfurt—at the very congress that adopted the program. Its target was a faction called Die Jüngen, young Berlin radicals who sneered at electoral politics as “parliamentary cretinism,” denounced the leadership as sellouts, and demanded confrontation instead of coalition-building. Friedrich Engels himself dismissed them as a “revolt of the literati and students.” The party expelled their ringleaders; the rest walked out, drifted toward anarchism, and within a few years were a footnote.

Notice the direction of that purge. The SPD did not expel people for being insufficiently pure. It expelled people who refused to do the patient, unglamorous work of winning elections and delivering material gains. The party’s first great act of discipline was aimed squarely at its purity faction—at the people who preferred the moral comfort of confrontation to the hard business of assembling a majority.

The modern DSA has taken the same disciplinary machinery and pointed it in exactly the opposite direction. Ocasio-Cortez was not cast out for abandoning electoral politics. She was cast out for succeeding at it.

Building the “State Within a State”

The modern American left often mistakes viral social media moments and protest turnout for actual political power. The SPD made no such mistake. They understood that true political power requires institutional infrastructure.

They built what historians call the “socialist milieu”—a cradle-to-grave ecosystem that insulated workers from the hostile conservative state. If you were an SPD member, you read SPD newspapers, shopped at socialist consumer cooperatives, sang in socialist choirs, and relied on socialist mutual aid societies. Voting for the party wasn’t just a political choice; it was an expression of community identity.

By contrast, the DSA’s current trajectory threatens to shrink its footprint to a handful of hyper-educated urban enclaves. You cannot build a mass movement—a true “milieu”—if your door is guarded by a bouncer checking everyone’s stance on a Middle Eastern conflict before they are allowed to fight for universal healthcare.

The Narcissism of the Safe Seat

To understand just how far the DSA has strayed from sound socialist strategy, look at where they run, and who they attack.

The historical SPD expanded their power by running candidates in nearly every district across the German Empire. They did this to build a genuine, nationwide mass movement. Then, when the runoff elections happened, they pragmatically allied with Left-Liberal candidates to defeat the conservative right. In 1912, a quietly negotiated runoff pact with the liberals helped propel the SPD to 110 seats, making it the largest party in the Reichstag.

The DSA has adopted the exact opposite approach. Operating within the American first-past-the-post system, the DSA knows that running as a third party in a general election acts as a spoiler that elects Republicans. So, they run inside Democratic primaries.

But instead of doing the hard, necessary work of expanding the progressive map into working-class purple or red districts, the DSA focuses almost exclusively on deep, safe blue urban enclaves. Their strategy is not to flip seats from the right. Their strategy is to capture already-blue seats and try to make them “darker blue.”

And who are they spending precious money and thousands of volunteer hours to unseat? They are primarying mainstream progressive Democrats—the exact modern equivalent of the left-liberals the SPD successfully allied with.

This is where the strategy goes from lazy to actively destructive. If you place the platform of a DSA challenger next to the mainstream progressive incumbent they are trying to oust, there is almost zero daylight between them on material domestic issues. Both want universal healthcare. Both want robust labor protections. Both want aggressive climate action.

The only real difference—the sole justification for declaring war on an ally—is the DSA’s militant anti-Zionist litmus test.

They are using the primary system not to advance democratic socialism, but to purge progressive Democrats who refuse to adopt their exact, uncompromising rhetoric on Israel. The historical SPD understood that the conservative right—the people actively crushing workers—was the ultimate enemy. The modern DSA seems to believe their ultimate enemy is a progressive Democrat in a safe blue seat who supports a two-state solution.

When you use your limited resources to cannibalize your closest ideological neighbors over a single foreign policy issue, you aren’t building a working-class revolution. You are just fighting for control of a very small, very pure treehouse.

Reclaiming the Strategy of Attrition

The SPD’s chief theorist, Karl Kautsky, called their approach the “strategy of attrition.” Capitalism would not be overthrown in a single glorious weekend. It required patience, institutional endurance, and the slow, steady accumulation of political power through massive, disciplined majorities.

The modern DSA stands at a crossroads. It can continue down the path of the purity spiral, disowning its most effective champions, enforcing foreign policy litmus tests, and shrinking into a politically marginal sect.

Or it can learn from history: the greatest socialist victories came not from demanding absolute ideological conformity, but from organizing workers around shared material interests, building durable community institutions, and forging tactical alliances to defeat the reactionary right.

The German SPD built a machine that shook an empire. The American left can do the same, but only if it decides that it actually wants to win.

After the Launch: What Workers’ Capital Should Do About SpaceX Now

The rocket flew, the stock popped, and the index is about to do the rest. The fight over the largest IPO in history is not behind us. It is just beginning — and it has to be fought from outside the firm.

Ten days ago Space Exploration Technologies Corp. debuted on Nasdaq in the largest initial public offering in the history of capitalism. The price was not discovered; it was decreed — $135 a share, fixed before the roadshow, take it or leave it. The stock opened at $150 and touched $175, valuing the company at roughly $2.2 trillion, more than Meta. Elon Musk became, on paper, the world’s first trillionaire, and the financial press called it a vindication. It was nothing of the kind. A first-day pop does not prove a price was right; it proves the marketing worked. PetroChina popped too. Facebook popped, then left the investors who bought its IPO underwater for fifteen months.

The question I posed before the offering — should workers’ capital buy into the SpaceX IPO? — has not expired with the debut. It has changed shape. The trustees of public-sector pension systems and jointly trusteed union plans are no longer deciding whether to place an order. Within days, Nasdaq’s rewritten index rules will pull SPCX into the Nasdaq-100, and the decision will be made for them: every index fund, every target-date vehicle, every teacher’s 403(b) that tracks the market must then buy this stock automatically, in proportion to a market capitalization that was itself manufactured. The American Federation of Teachers, whose 1.8 million members participate in funds holding some $3 trillion, took the unprecedented step of asking the SEC to scrutinize the deal, warning of “forced investment.” They were right. What is coming is not an investment decision at all. It is a conscription.

So the post-IPO question is not whether to buy. It is what labor and the progressive shareholder-activist movement should do now that the buying has been taken out of their hands. To answer it, I want to return to a piece of theory I worked out in the Cambridge Journal of Economics some years ago — because the SpaceX structure is not an aberration. It is the purest illustration yet of the problem that theory was built to name.

The governance option, and why it is missing here

Begin with the firm itself. The dominant theory of the corporation, descended from Berle and Means and refurbished by the agency-cost school, rests on a comforting premise: ownership and control are separate, managers are mere agents of dispersed shareholders, and any manager who misallocates capital is disciplined by the “market for corporate control.” Capital markets, on this view, are neutral plumbing that converts millions of buy-and-sell decisions into legitimate outcomes. I argued, following Christos Pitelis, that the picture is false at its foundation. There was no managerial revolution. Capitalists did not surrender control when they sold shares to outsiders; they kept it, commanding socialized labor and social resources from a minority economic stake. The firm is not plumbing. It is an island of conscious power — and once you see it that way, a problem the orthodox account cannot handle appears: legitimacy. The people on the receiving end of corporate power, workers as employees and as the ultimate owners of pension capital, will eventually want a say in whether its outcomes are legitimate. Securities law, fiduciary duty, and shareholder rights are the residue of earlier moments when they demanded one.

The orthodox defense leans on a single load-bearing assumption Pitelis called perfect substitutability: that a worker who dislikes how a company behaves can simply sell. But pension beneficiaries cannot easily sell. They have no control over, and often no knowledge of, the shares bought in their name; they cannot move fluidly between consumption and investment the way the theory requires. They are involuntary investors — hostages to the decisions controlling capitalists make about corporate profits. Their “exit” is largely a fiction, and when exit goes dark, the price signal that is supposed to discipline managers goes dark with it. Absent some other intervention, workers’ deferred wages are quietly “put” back to the capitalist class as capitalist savings — fuel for accumulation, deployed by others, in others’ interests.

What is the other intervention? I called it the governance option. A share is a bundle of rights. Hedge-fund activists care about one strand, the right to payouts; but the bundle also contains governance rights — to vote on major decisions, to obtain information, to speak at the annual meeting, and to bring derivative claims against directors who loot the company. These are an embedded option, and for decades pension funds let it lapse, delegating their votes to Wall Street managers who, dependent on corporate relationships, reliably sided with management. The option expired unexercised, like a weapon never drawn. Labor’s contribution over the last two decades has been to start exercising it: at Tesla, where the CtW Investment Group and allied funds forced board changes; at Facebook, where union-led plaintiffs sued and made Zuckerberg withdraw a plan for non-voting Class C shares. Exercised collectively and credibly, the governance option is the one tool that lets non-controlling owners push back against the private power concentrated inside the firm.

Now look at the SpaceX prospectus with that framework in hand, and you can watch each strand of the bundle being severed in advance.

The vote is decorative. Public buyers get one-vote Class A shares; Musk’s Class B shares carry ten votes each. He commands 85.1% of the votes on 42% of the economics — permanently. He can be removed only by a Class B vote he himself controls. Source: SpaceX final registration statement.

The vote is hollow: 85.1 percent of the voting power sits with the founder, locked above a majority forever. The derivative suit — the remedy by which shareholders have policed self-dealing since the nineteenth century — has been priced out of existence. SpaceX reincorporated in Texas in February 2024, days after Delaware’s Chancery Court struck down Musk’s Tesla pay package, and Texas supplies a statute requiring a 3 percent stake before a shareholder may bring a derivative claim — more than $60 billion at today’s valuation, more than any pension system on earth holds in any single stock. The rights to informationand to voice at the annual meeting are nominal in a company whose board is a closed circle of the founder’s friends and co-investors; the “controlled company” exemption strips away even the usual independent-board requirements.

In other words, the SpaceX structure does not merely exploit a lapsed governance option. It is engineered, in advance, so that there is no option left to exercise — the embedded rights emptied out before the first share changes hands. Then, with index inclusion, the last strand, exit, is severed too. This is imperfect substitutability taken to its limit: workers as maximally hostage investors, unable to refuse the purchase and unable to sell, holding a security stripped of voice and of legal remedy. Participation without consent, exposure without voice. That is not a market relationship. It is tribute.

A great company can still be a terrible security. NYU’s Aswath Damodaran — the nearest thing American finance has to a neutral arbiter — values the equity near $100 a share using assumptions he calls generous. The prospectus asserts a $28 trillion “total addressable market,” $26 trillion of it AI; he judges that figure to “border on fantasy.” Sources: Damodaran post-prospectus analysis, June 4, 2026; SpaceX prospectus.

How did a $100 security come to be priced at $135 and trade at $175? Not through discovery. SpaceX was marked at $350 billion in December 2024; fourteen months later the figure was $1.25 trillion — a step-up built on tiny secondaries to obscure offshore vehicles, with undisclosed parties on both sides, and the $250 billion absorption of xAI, a Musk-controlled company bought by a Musk-controlled company. That this was a deal Musk negotiated, in effect, with himself is not my characterization alone; it is how independent observers described the transaction. The IPO was the first arm’s-length price test of this security in years; its buyers were not relying on price discovery but performing it, with their own money.

What independent observers said about the deal

“Musk negotiates with himself, sets the terms, and outside shareholders absorb the risk… the vehicle for value creation is not actual business performance—it’s Musk shuffling assets between entities he controls and stamping a higher valuation on the combination.”
— Fred Lambert, Electrek, May 27, 2026, on the $250B SpaceX–xAI deal

Of the earlier xAI–X combination that set the template, William Cohan asked whether “any bankers [were] hired to value the two companies and set an exchange ratio” or whether “special committees of the boards of directors [were] set up to… make sure it was fair to the non-Elon shareholders.” Bloomberg’s Matt Levine judged the valuation “not clearly validated by arm’s-length transactions with economically motivated counterparties.”
— quoted in Mike Masnick, “The X/xAI Shell Game: When Musk Merges With Himself,” Techdirt, April 7, 2025

And on what the structure leaves for outside shareholders, NYU’s Aswath Damodaran found in the prospectus “a voting share structure that locks in Elon Musk’s control of the company, since there is little that shareholders can do to restrain the company.”
Aswath Damodaran, “Revisiting the SpaceX Valuation,” June 4, 2026

The valuation outran any independent estimate of value. The step-up rested on thin secondary trades with undisclosed counterparties and the $250B absorption of xAI — a deal independent observers described as Musk negotiating “with himself” (Electrek; Techdirt). Sources: SpaceX prospectus; reported December 2024 mark; Damodaran, June 2026.

Why “engage from the inside” cannot be the answer this time

The sophisticated counsel inside the labor-investment world says: engage. This is the first of a wave — OpenAI and Anthropic will follow — and a movement that spent four decades building credibility cannot sit out the defining transaction of the era. Better to enter in coalition, with published conditions, and fight from within, as we did at Tesla. I helped build that engagement tradition and respect its instincts. But engagement presupposes channels of influence, and this issuer has closed every one in advance. We ran the experiment: in 2016 CtW’s funds and allies, managing some $700 billion, warned Tesla’s board about the SolarCity related-party deal; in 2018 I took the floor of its annual meeting and urged shareholders to vote against Musk’s captive directors. Engagement under Delaware law, with courts and derivative suits still available, yielded redomestication to Texas and a bigger pay package. SpaceX offers strictly worse terrain — no vote that counts, no court a pension fund can afford to reach, no independent board, and now no exit. A condition-based strategy with no enforcement mechanism is not a strategy. It is a press release with a wire transfer attached.

If the governance option has been emptied inside the firm, then the response cannot be conducted inside the firm. It has to push on the boundary of the firm from outside — what Engels, in a passage I have always found startlingly contemporary, called the invading socialist society pressing inward against the wall of private appropriation. The good news is that labor has done exactly this before, and it worked.

The PetroChina campaign taught that even at the heart of the financial system, organized refusal from below can reprice a deal and rewrite a rule. The stakes now are larger — because the capital being requisitioned is labor’s own.

In 2000, a Goldman-led syndicate set out to float PetroChina on the New York Stock Exchange and hoped to raise $10 billion. The AFL-CIO, joined by human-rights and religious organizations, mounted an “alternative roadshow” that trailed the underwriters city to city, and the deal was slashed to under $3 billion. It left a regulatory residue too: in the 2001 Unger Letter, the SEC conceded for the first time that an issuer’s human-rights conduct could be material to investors — proof that the wall between “financial” and “social” information is not a fact of nature but a political settlement, open to renegotiation. That is the model, scaled up for the age of the trillion-dollar founder. Here is what it looks like now.

An agenda for the post-IPO fight

1. Move the fight to the index layer—the new frontier of the exit problem.

This is where the forced-investment fight will be won or lost, and it is the most urgent item on the clock. The mechanism that strips workers of exit is no longer the trading desk; it is the index committee. Reuters reported that SpaceX made fast-track inclusion a condition of listing, and Nasdaq rewrote its rules so a mega-listing can enter the Nasdaq-100 in fifteen days instead of months. Labor should contest fast-track inclusion directly and press the broader principle the moment demands: that benchmark providers adopt governance standards excluding — or weighting down — securities with no meaningful vote and founder lock-in, as index families have restricted multi-class structures before. And trustees should reassert that they never delegated their fiduciary judgment to an index committee’s rulebook. “The index made us buy it” is an abdication, not a defense.

Conscription, then exit. Index funds are forced in just as insider lockups begin to release. Insiders who put less than $11 billion of equity into the company over its lifetime sell into the enthusiasm of the people who cheer the rockets. Sources: Reuters; market lockup estimates; SpaceX prospectus.

2. Rebuild the governance option through law and disclosure, not boardroom diplomacy.

If the rights inside the share have been emptied, refill them from outside the firm, through the regulatory and legal channels engagement bypasses. That means a coordinated wave of SEC comment letters pressing the questions the prospectus finesses: the roughly $205 billion of goodwill atop a subsidiary whose eleven co-founders have all departed; the Starlink unit economics that fell from $99 to $66 in monthly revenue per subscriber while the valuation tripled; the $28 trillion addressable-market claim. It means building, on the PetroChina/Unger foundation, the materiality case that governance and labor conduct are financial facts, not soft “social” ones. And it means treating the Texas 3-percent derivative threshold as a target for litigation and legislative reform — a remedy priced out of existence, not constitutionally abolished.

3. Reclaim the option from the intermediaries who keep “putting” it back to management.

The governance option lapses because pension funds delegate their votes and stewardship to Wall Street managers whose business depends on cordial relations with the very insiders they are meant to police. The largest index providers will be among the biggest holders of SPCX, and their voting policies will matter more than any single fund’s. Labor’s task is to build independent stewardship capacity — in-house proxy voting, shared voting platforms among allied funds, public guidelines that refuse to rubber-stamp controlled-company structures — so the option is exercised by the beneficiaries’ representatives rather than surrendered on their behalf. An option never exercised loses its credibility, like a weapon never drawn; a credible threat changes behavior before it is used.

4. Unite the two roles: workers as owners and workers as employees.

SpaceX is not merely an overpriced, unaccountable security. It is the company that sued to have the National Labor Relations Board declared unconstitutional after firing workers who criticized Musk — and won by attrition this February, when a hollowed-out Board abandoned its case. Reuters has documented more than 600 worker injuries at its facilities, including amputations and a death. The proposition put to a union trustee is therefore obscene on its face: hand the deferred wages of union members, at a 35-to-75 percent premium to fair value, to a company dismantling the legal regime under which those same members organized — in exchange for a share with no vote, no court, and no board. The old worry that prudence and solidarity might conflict dissolves here; they point the same way. Owner-side and worker-side institutions should run this as one campaign, not two.

5. Refuse loudly, on the record, and be candid with beneficiaries about why.

Finally, the alternative roadshow for the age of the trillion-dollar founder: a documented, public, rigorous refusal. Restricted lists. Written-justification requirements for any manager who wants in over a fund’s own benchmark. And honest communication with the teachers, firefighters, and nurses whose savings are at stake — not squeamishness about rockets, but a refusal to let workers’ own capital finance a structure built to be unaccountable to them in both of their roles. The objection was never that the rockets do not fly. Launch margins near 67 percent and Starlink subscribers doubling to 10.3 million are real. A great company can still be a terrible security, and an unaccountable one can still be a political defeat.


Step back and the historical shape comes into view. The postwar settlement bought social legitimacy with institutions — bargaining, social insurance, enforceable rights — that gave the working class procedural standing. The neoliberal era stripped those away and offered a substitute: the worker as shareholder, the pension fund as each citizen’s stake in capitalism’s success. The SpaceX offering abolishes even that bargain’s formal terms — no meaningful vote, no court, no independent board, and now, through index capture, no exit and no entry decision either. A system that must conscript its own working class’s savings while litigating to dissolve that class’s last statutory protections is not generating legitimacy. It is running down reserves accumulated in an earlier age, and the deficit is compounding.

The price is set; the stock has popped; the index will do the rest. None of that settles the question the workers’-capital movement has always posed — whether the class that produces society’s resources will have any say in how they are deployed. The governance option has been emptied inside this firm. So it must be exercised against the structure from outside: at the index committee, at the SEC, in the legislature, and in public. The point was never to catch the biggest deal in history. The point is to contest it.


Stephen F. Diamond is a corporate and securities law scholar who has advised union pension funds for three decades, including the AFL-CIO’s PetroChina IPO campaign (2000) and the CtW Investment Group’s engagements with Tesla’s board (2016–18). The argument here develops the framework of his article “Exercising the ‘governance option’: labour’s new push to reshape financial capitalism,” Cambridge Journal of Economics 43, no. 4 (2019): 891–916. Valuation figures draw on Aswath Damodaran’s June 2026 analysis and the SpaceX registration statement; first-day trading, lockup, and index-timing figures reflect reporting as of June 22, 2026.

A Powerpoint summary of this post can be found here: Should Workers Capital Buy Into the SpaceX IPO (deck).

The Night Before the Escalation: What Two Firings May Tell Us About What’s Coming in Iran

On Wednesday night, President Trump told the country that Operation Epic Fury — the U.S.-led military campaign against Iran — was nearing its objectives. Iran’s navy, he said, was gone. Its air force was in ruins. Most of its leaders were dead. Yet in the same address he warned that American forces would hit Iran “extremely hard over the next two to three weeks.”

That is the tension at the center of this moment. Trump says victory is close, but his own timeline suggests that the most consequential phase of the war may still lie ahead.

By the next day, two of the most structurally important figures in the national security apparatus were out.

Attorney General Pam Bondi had been fired, and Todd Blanche was elevated to acting attorney general. Hours later, Defense Secretary Pete Hegseth removed Army Chief of Staff General Randy George, along with two other senior Army generals. Each move has a facially plausible bureaucratic explanation. Bondi’s standing had reportedly deteriorated amid dissatisfaction over the handling of the Epstein files. George’s ouster was publicly framed as a leadership change rather than the product of any specific controversy.

Maybe that is all this was. But the timing is too striking to ignore.

To see why, it helps to focus more on institutions than on personalities. What mattered about Bondi and George was not simply who they were, but what their offices were positioned to do at a moment when the administration was openly preparing the public for escalation.

The Army Chief of Staff is not a battlefield commander. Under the post–Goldwater-Nichols structure, the operational chain of command runs from the President to the Secretary of Defense to the combatant commander — here, CENTCOM. The service chiefs sit outside that chain. Their role is different: they help organize, train, and equip the force, assess readiness, and advise civilian leadership on whether the Army can sustain an expanded operational tempo without unacceptable strain on other commitments in Europe, Korea, or the Pacific.

That is not a ceremonial function. It is one of the principal ways institutional friction enters the system.

The Chief of Staff also sits on the Joint Chiefs, where the service chiefs serve as formal military advisers to the President and the Secretary of Defense. If a service chief raises a formal objection to a deployment, a pace of operations, or a plan that would overextend the force, that objection can become part of the institutional record. It creates friction. It creates accountability. It forces civilian leaders to override professional military advice consciously rather than glide past it unnoticed.

General George had already been operating in that space. Days before his firing, he authorized combat patches for soldiers deployed in support of Epic Fury, a quiet but meaningful acknowledgment that the Army was serving in a combat zone. His views on readiness and sustainability would likely have mattered in any decision to deepen the Army’s role in the conflict, especially because the administration has not entirely foreclosed additional ground deployments even while insisting that its objectives can be achieved without a full-scale ground invasion.

The attorney general occupies a different institutional position, but one that is no less important.

The Justice Department’s Office of Legal Counsel is the executive branch’s principal internal source of controlling legal advice. OLC does not act alone; Congress, the courts, military lawyers, and agency counsel all shape the legal environment of war. But OLC helps define the executive branch’s legal position on the questions that matter most in a conflict: how to interpret the War Powers Resolution, how long hostilities may continue without additional congressional authorization, what legal theories justify the use of force, and what legal limits govern detention and treatment.

The attorney general does not personally write those opinions, and the head of OLC is a Senate-confirmed official. But the attorney general still matters enormously. The office shapes institutional culture, supervises the department in which OLC sits, and influences whether executive power is construed broadly or narrowly when the stakes are highest.

That is what makes Bondi’s replacement significant. Todd Blanche is not merely a new acting attorney general. He is a former Trump personal defense lawyer who most recently served as Deputy Attorney General. His elevation may say less about legal doctrine than about institutional posture. At a moment of possible escalation, the administration appears to prefer proximity and loyalty over distance and independence.

Taken one by one, these firings can be explained away. Taken together, in the hours surrounding a presidential address promising a more intense military campaign, they look more consequential. Two important sources of institutional friction — one military, one legal — were removed just before the administration entered what Trump himself described as a decisive two-to-three-week period.

That does not prove motive. It does not establish that either official had resisted escalation, or that either would necessarily have done so. But it does raise the question whether the administration is reducing the number of internal actors positioned to slow, question, or formally complicate what comes next.

That question should not be treated lightly. Congress, which still bears constitutional responsibility for war powers oversight, should be examining these moves with real urgency. The War Powers timetable is already running. Questions about sustainability, force posture, and munitions capacity are emerging. And while administration officials have said current objectives can be achieved without a ground invasion, they have stopped short of definitively ruling out deeper military involvement.

In Washington, personnel is often policy in its clearest form. When an administration removes institutional friction immediately before a promised escalation, it is reasonable to ask what that friction might have constrained.

We may get the answer soon enough. The President himself has given the country the timeline: two to three weeks.

Stephen F. Diamond is a law professor and political scientist, and a former MacArthur Foundation Fellow in International Peace and Security at Harvard University’s Center for International Affairs.

Bursting the blockchain bubble

The massive hype surrounding the crypto world is unlike anything I have witnessed over three decades in and studying the financial markets. This includes my direct participation in the securities markets while the dotcom boom raged and collapsed. Crypto far exceeds that excess. There are billions of dollars and hundreds of thousands – if not millions – of people now being sucked into the vortex of this very odd world.

What makes it so dangerous is the ability of this whirlwind to enable people “just switch off their brains and stop thinking,” as Martin Walker, recently testified to a Parliamentary Committee. In fact, it was impressive how the members of that Parliamentary Committee were unwilling to accept the simple facts that Walker tried to share with them. Evidence, clearly, of the impact of crypto hype.

Further evidence of the problem was found recently when Professor Nouriel Roubini, an economist famous for having foretold the collapse of the credit markets in 2008, testified to a Senate Committee about his longstanding view that “cyrpto is the mother of all scams and (now busted) bubbles while blockchain is the most over-hyped technology ever, no better than a spreadsheet/database.” Roubini was then made the subject of a twitter attack that appeared to be something on the scale of what the Russians did to Hillary Clinton, including rampant use of anti-semitic comments and tropes.

As a securities lawyer and legal scholar who has spent the last decade studying the decentralization of the stock markets, I have a particular interest in the bitcoin/crypto/ICO space. It is clear to me that the very same radical ideology that somehow convinced the SEC to condone the destruction of a stable stock market has now migrated towards the heart of our financial system, namely the institutions of money, banking, and payment systems. And since I also train future securities lawyers as a law professor I have a particular concern about the way that crypto has taken on momentum in the legal, banking and tech startup world where I work and study.

I plan to post information on my blog about research and events that are helping to burst the bubble that this ideological assault on our financial system represents. The principle that will guide this effort is a simple one, borrowed from the crusading progessive lawyer and future Supreme Court Justice Louis Brandeis, who wrote in his famous 1913 text, Other People’s Money and How the Bankers Use It, that “sunshine is the best disinfectant.”

Delaware Chancery Court slaps Elon Musk’s wrist on SolarCity deal

Tesla shareholders won an important victory for shareholder rights today, at a time when Silicon Valley CEO’s continue to try to wrest power away from their investors through various mechanisms like non-voting stock (SNAP) and dual and triple class capital structures (Google, Facebook, Theranos).

The Delaware Chancery Court denied a motion to dismiss by Tesla in a lawsuit over Tesla’s controversial acquisition of SolarCity.

The close ties between Tesla CEO Elon Musk and his board members at the time of the SolarCity acquisition were clearly a concern for the Delaware Chancery Court. That Tesla has now added two new independent board members is an important acknowledgement that Tesla had a problem prior to this point in time because Tesla’s board was not sufficiently autonomous from Musk.

Technically what happened here is that the Court agreed with the plaintiff shareholders that it would be reasonable to conclude that Musk “controlled” the Tesla board and thus judicial review of the merger vote is subject to the most exacting standard of review, known as “entire fairness,” as opposed to the more deferential “business judgment” standard. Cases like these rarely get dismissed. Now, Tesla will face full discovery of its internal records and a possible trial on the merits or look to settle the case.

One interesting comment by the Court: the judge compared this situation with the Dell MBO and concluded that there Michael Dell took important steps to separate himself from the Board when it considered the acquisition offer from Silverlake et al. But here Musk took “practically no steps to separate [himself] from the Board’s consideration of the Acquisition.”

Does the California State Bar have a race problem?

A recent meeting of the State Bar’s Committee of Bar Examiners (CBE) suggests to me that the California Bar may have a problem with race. That is, its leaders do not understand or are not willing to accept that they are putting up a barrier to minorities who wish to practice law. The evidence of this potential problem is found in the tape of the hearing which you can view here as well as a report prepared by the Bar Association’s staff on the bar exam.

The CBE chair, Karen Goodman, who readily admits (Min. 48:00) that she is from “Elk Grove” (a small town south of Sacramento that is, ironically, quite racially diverse) and so may not understand the data presented to her, questions whether lowering the “cut score” (the minimum number of points needed to pass) on the bar exam would help improve access to justice.

Yet, the data presented to the CBE she chairs indicates clearly that lowering the cut score even a modest amount (and still at a level well above that of New York state) would significantly increase the number of minority lawyers in the state. And this would be true in a state bar that remains overwhelmingly white and male and older, despite significant demographic shifts in the state over the last few decades.

The Bar staff report concluded: “…applicants of color pass the [current] bar exam at rates that are disproportionate to those of their white counterparts.This impact, when combined with disproportionately lower numbers of people of color in the pipeline to higher education and law school, has resulted in a pool of licensed attorneys in California that does not reflect the population of the state.”

And CBE Chair Goodman seems to go out of her way to minimize the impact of not lowering the cut score by suggesting, without any basis, that newly admitted minority lawyers won’t be of any assistance to the communities from which they came because they may not return to work in those settings. She apparently believes, despite decades of experience with affirmative action and other programs suggesting the contrary, that the only way they help those communities is by going back to them!

In any case, she and others on the CBE seemed unfamiliar with the debt repayment plans and financial support for those who go into public interest legal positions that are available to many law school graduates, thus opening a pipeline to enable lawyers to return to those communities. Of course, if we arbitrarily limit the number of minority lawyers that goal is not going to be easy to meet.

The Bar staff report also concluded that lowering the cut score would likely not have any impact on the number of attorneys subject to discipline by the bar, thus the Committee’s mandate to protect the public would still be met: “…attorney discipline – as measured by private and public discipline per thousand attorneys – appears to have no relationship to the cut score….based on the data available, it appears unlikely that changing the cut score would have any impact on the incidence of attorney misconduct.” (p. 36 of the Report to the Board of Trustees of the California State Bar Final Report on the Standard Setting Study and Public Comments Regarding Pass Line Options September 5, 2017.)

Thus, while we do not know why the cut score is so much higher than needed to meet the primary mandate of the CBE (protection of the public), we do know that by setting it at 144 the Bar has put up a wall over which minority law school graduates have difficulty climbing with the inevitable outcome: a disparate impact on those hopeful new law school graduates.

(This is likely why the Bar staff recommended three options: leaving the score the same, lowering it slightly to 141 or lowering it further to 139, a point which would still be 6 points higher than New York. Despite the troglodyte nature of the CBE deliberations, the Board of Trustees voted 6-5 to send all three staff options to the Supreme Court, which remains free to accept or reject those, as it has ultimate authority now over the cut score.)

Goodman and others on the Committee also seem to be ignorant of the actual improving employment data for lawyers in California over the past several years. Instead of using the reliable longitudinal data of, for example, the Bureau of Labor Statistics (which show steady increases in the number of employed lawyers in California over the last decade as well as steady increases in average earnings), Goodman casually read aloud random and somewhat misleading ABA employment reports of various law schools. These only track the first ten months of a law school graduate’s career.

Amazingly, Goodman seems unaware what that means – given the very high cut score in California, many students require several expensive and demoralizing attempts to pass the bar and thus are unable to get jobs as lawyers in those first ten months.

Yet, many of those students will, in fact, eventually pass. They are only forced to delay their careers at great personal expense because of California’s irrational and baseless high passing score required by Goodman’s committee.

In other words, if Goodman and her Committee were truly motivated to improve access to the bar for minorities who wish to become licensed lawyers they could easily take steps to do so. But they have steadfastly refused to do that to date, instead punting the issue to the California Supreme Court. Hopefully, the Court will do the right thing and begin the process of restructuring the State Bar, including its committee structure and current leadership.

At a minimum, they should ignore the self-serving surveys conducted by the current Bar and 1) temporarily lower the cut score to the same level as New York (133 as opposed to its current 144); and 2) appoint a blue ribbon independent commission chaired by Dean Ferruolo of the University of San Diego School of Law to conduct a thorough study of the purpose, impact and structure of the bar exam with a mandate to propose any and all changes needed to improve access to, and effectiveness of, the legal profession in California.

California Bar opens door to increase in bar exam cut score

The State Bar of California has released a study today it conducted of the so-called “cut score” which determines who does and does not pass the California bar exam. Using the results of a focus group of 20 individuals the study concluded that the cut score could go as high as 150 (it currently stands at 144 – second highest in the country) or as low as 139. An accompanying memo from the Bar seems to suggest moving to 141 as the appropriate step. (The Committee of Bar Examiners will discuss today whether to propose lowering the cut score for the recent July 2017 exam only but will then conduct additional hearings before submitting a final recommendation to the Supreme Court.)

Yet the bar also admits there is little correlation between the bar cut score and lawyer competence and therefore consumer protection: “There is no empirical evidence available that would support a statement that as a result of its high pass line California lawyers are more competent than those in other states, nor is there any data that suggests that there are fewer attorney discipline cases per attorney capita in this state.”

But what stands out about the results is the fact that the 20 person focus group relied upon in the study had only 2 hispanic members but 10 white members. Hispanics out number whites in California and access to legal services by minority communities is a significant issue of concern. This raises the issue of inherent bias in the 20 person study group whose subjective views was the key source of input for the result which led to the study’s conclusions.

The Bar is conducting a meeting today to discuss the results. Video can be found here.

UPDATE: The Bar’s Committee of Bar Examiners voted today to send out for public comment two options: keeping the cut score the same and lowering the cut score for July 2017 only to 141.

Policy by committee is not a pretty process….

Another banner year for lawyers, BLS reports

The Bureau of Labor Statistics (BLS) is out with its annual employment report and the news is, once again, very positive for lawyers. Lawyers’ incomes and employment numbers have increased steadily over the last two decades (except for a decline in incomes in 2008 at the onset of the financial crisis).

The BLS reports that the total number of lawyers employed as of May 2016 was 619,530 compared with 609,930 the year before. Lawyers’ mean income was $118,160 compared to last year’s wage of $115,820.

The outlook here in California continues to be strong with 76,840 lawyers earning a mean annual wage of $162,010. This compares to 72,790 lawyers the year before who earned a slightly higher mean wage of $163,020.

The numbers in my region of Silicon Valley (Santa Clara County which includes Palo Alto but not Menlo Park) remain strong with 5,170 lawyers earning the nation’s highest mean wage of $197,320. This represents a correction against last year when there were 5,430 lawyers earning an annual wage of $204,010. This may reflect a shift in the epicenter of Silicon Valley to the social media companies now based in San Francisco. Lawyers employed there rose in the past year from 10,320 to 11,750 while incomes rose from $178,110 to $183,890.

I tracked earlier data here, here and here.

There are some caveats to the data. Solo practitioners and partners in firms are not included in this data. I examined the prospects for solo practitioners here. The former may fall below the means reported here, while partner incomes could easily outpace those of “employed” lawyers so that the overall effect of the exclusions is minimized.

Presidential power or “police state”: Trump relies on discredited 1950 case to defend Executive Order

At the heart of the legal battle over the President’s Executive Order banning refugees from Syria and individuals from seven predominantly muslim nations is a claim that his authority to do so should not be subject to judicial review. If his order on its face states that he has found their exclusion to be in the interests of the United States that should end the matter, at least according to DOJ lawyers in the recent State of Washington litigation.

There is a lot that is wrong in this position including its failure to recognize that the powers of a President NOT subject to judicial review are very limited and have almost never included a situation where he orders an Agency like the Department of Homeland Security to exclude aliens. The Administrative Procedures Act gives the courts wide latitude to review Agency actions, a principle rooted in the fact that Agencies are not creations of plenary executive power.

Nonetheless, to bolster a very weak case, the Government relied heavily in their argument in Washington on Knauff v. Shaughnessy, a 1950 Supreme Court case, where the Court upheld the exclusion of a German woman who had married an American soldier on security grounds. The case is considered long discredited (see Louis Henkin, The President and International Law, 80 AJIL 930, 937 n.20) but is trotted out by the DOJ whenever it tries to defend some unilateral exercise of power by the President. The Government doubles down on Knauff in their motion for an emergency stay to the Ninth Circuit.

Paradoxically the Government relies on Knauff while also relying on Kleindienst v. Mandel although the latter case can be said to have rendered the former no longer good law. The Government likes the Mandel case because it states that the standard of review of a Presidential order in immigration cases is very limited – to simply what the DOJ lawyer in the Washington hearing called “facial” validity. But that is at least some kind of review and Knauff stood for the proposition that the President’s power was in this area was, in essence, not subject to review at all!

It is worthwhile then to consider the following excerpt from the dissent in that case (Knauff v. Shaughnessy) by Justice Robert Jackson (whom the DOJ also quotes in another case in their brief):

Security is like liberty, in that many are the crimes committed in its name. The menace to the security of this country, be it great as it may, from this girl’s admission is as nothing compared to the menace to free institutions inherent in procedures of this pattern. In the name of security, the police state justifies its arbitrary oppressions on evidence that is secret, because security might be prejudiced if it were brought to light in hearings. The plea that evidence of guilt must be secret is abhorrent to free men, because it provides a cloak for the malevolent, the misinformed, the meddlesome, and the corrupt to play the role of informer undetected and uncorrected. Cf. In re Oliver, 333 U. S. 257, 333 U. S. 268.

I am sure the officials here have acted from a sense of duty, with full belief in their lawful power, and no doubt upon information which, if it stood the test of trial, would justify the order of exclusion. But not even they know whether it would stand this test. And anyway, as I have said before, personal confidence in the officials involved does not excuse a judge for sanctioning a procedure that is dangerously wrong in principle. Dissent in Bowles v. United States, 319 U. S. 33, 319 U. S. 37.

Congress will have to use more explicit language than any yet cited before I will agree that it has authorized an administrative officer to break up the family of an American citizen or force him to keep his wife by becoming an exile. Likewise, it will have to be much more explicit before I can agree that it authorized a finding of serious misconduct against the wife of an American citizen without notice of charges, evidence of guilt and a chance to meet it.

I should direct the Attorney General either to produce his evidence justifying exclusion or to admit Mrs. Knauff to the country.

Now this is where it gets interesting: J. Jackson two years after this case wrote his most noted opinion in the Steel Seizure case where he outlined what has become the modern test of the legitimacy of presidential power. He was clearly influenced by what he learned in the earlier Knauff case and pointed out that where a President acts alone without congressional support his power it at its lowest ebb. So if the Government wants to take a Knauff based approach to the current Executive Order it is in fact flying in the face of the Steel Seizure approach. Yet the Government also argues that it has the support of a statute – Immigration and Nationality Act! Well, if that is the case then it cannot rely on Knauff! And then it is back at least in the land of Mandel where it must allow courts some minimal right of review and thus it is required to provide some basis for its claim that the order is facially valid (i.e., that it meets the requirement of the INA that the Order is rooted in a valid concern for US interests.)

Of course, I think the APA and other approaches based on due process should be applied and I think the 9th circuit may agree given the blanket nature of the Order, the utter failure to provide any support for the ban and the highly suspicious statements about religion made by the President.