Unhinged: When Concrete Reality No Longer Matters to the Market (and What to Do About It)
by Zeus Yiamouyiannis, Ph.D.
Introduction
Something profound has happened, obscured by all the concerns about economic details and speculation about whether we are in a “deep recession” or a “depression,” a “nascent recovery” or a “W shaped” downturn. We no longer have a global economic system that is tethered to concrete reality. Parasitic, amoral, slight-of-hand value-shuffling (what I would call the “unreal economy”) has effectively trumped the “real economy,” the production and exchange of meaningful goods and services.
Worse, we’ve let it happen with our acquiescence, our hope that we can just ride this one out, and our denial of what we sense intuitively to be true—pervasive fraud in the conduct of global financial business and massive counterfeiting in the establishment of value.
We’ve allowed big banks and affiliated institutions to simply concoct fake wealth out of thin air, and we have legitimized and rewarded these concoctions with a massive transfer of real wealth to a very small but powerful oligarchy through unregulated private bets backed by public taxpayer money, stratospheric fees siphoned from transactions, predatory lending, and private equity cannibalization of once-productive firms.
A global economy mediated by an acceptance of a standardized, reality-based rule of law and value between nations has given way to the shrouded anarchy of transnational banks as overriding powers driven by their own brand of anti-public “interest.”
What constitutes value has migrated from actual value, based in something you earn and related to something you can actually concretely use, to “references to value,” some number merely assigned to some financial instrument attached to some good or service somewhere several degrees removed from its source. (Think “mortgage backed securities” where the actual deeds to properties are no longer even in the picture after extensive “packaging” and repackaging.)
This is all a fancy way of playing the age old game, externalize liabilities, internalize gains, but on an unprecedented and potentially cataclysmic scale. Just as with political coverage that largely deals with the “horse race,” personalities, gaffes, and likeability of candidates over actual policy, financial coverage has concerned itself with a relentless boosterism, tea leaf reading, and a host of other trivialities while the structural rot goes unreported.
Abstractions like the “velocity of money,” along with whitewashing indicators like trading volume are used to gauge the health of an economy without sorting out whether such indicators are attached to some productive, underlying activity or asset. This all serves to create a convenient smoke screen for moneyed interests, and progressively makes the “new normal” one that thrusts citizens deeper into debt servitude.
Post Mortem and Review
A post mortem is in order. The elements of this worldwide con game are remarkably simple, not complex at all. Apparently you only need a few things to make a mockery of the entire global economic system, and big banks garnered these few important things through “regulatory capture”:
1) Unregulated, unenforced rules (particularly for derivatives)
2) license to “mark to model” (assign your own values to your assets)
3) ability to peg present value to irrational expected future returns (based on unlimited, exponential growth)
4) infinite leverage (no effective requirements for reserve capital in unregulated “shadow” markets)
5) massive size, so that the bank is "too big to fail" 6) non-transparency and non-accountability.
This combined with the moral, social, personal, and cultural approval of maximizing profit at any cost, incentivizes massive fraud and counterfeiting. How could this be otherwise, given the premises?
So here we have a system where you can 1) make up your own rules, 2) establish any value for any asset you choose, 3) inflate that value a hundred fold based on ostensible future value and returns, 4) leverage that inflated value another thousand or a million fold simply on your say-so, enough to buy up multi-billion dollar firms if you choose, 5) lean on taxpayer bailouts when you get into trouble, and 6) do this without any disclosure or accountability, all based upon a self-interested formula you concoct to enrich yourself. This is less sin or malfeasance than just plain lunacy. Yet, this is what we have and what we have allowed to gain the upper hand.
Literally, following the same formula with a little “solid reputation” sprinkled on, I can value my cat’s litter box at a million dollars, trade on its ostensible increased future value to skim myself a tidy sum in profit and transaction fees, leverage my “marked to model” value of that litter box, a million fold to buy up Chrysler. I can then loot Chrysler, stripping it of its real wealth and infrastructure, gut jobs, etc. for short term boosts to profits, and then walk away a billionaire.
I can give any reason or no reason at all for what I’m doing. I don’t have to tell anyone a thing, and no one is going to come after me. If they do “come after me” it will be to lard me with hundreds of billions of dollars of taxpayer money to keep the national or global economy from collapsing.
Talk about throwing good money after bad. The most I can lose is my litter box and now that everyone has a stake in the con, they have every incentive to cover it up and make me whole, both to protect against their anxiety and their feelings they’ve been conned, and to maintain a functioning dysfunctional system.
The Historical Proof
Let me stress again: This is not mere “moral hazard;” this is sheer lunacy of the highest order. Moral hazard assumes a rational framework where the “good” (productivity, efficiency, etc.) is rewarded. We have currently already established and incentivized as “rational” an irrational framework where outright, willful lying, theft, fraud, and counterfeiting are rewarded. The more parasitic and more inefficient I am in this framework, the more I make. The more I trade an asset back and forth, the more fees I get.
Even if those fees eclipse the entire value of the asset in question, I am “rationally” compelled to continue trading as long as someone else is paying. If I can inflate the value of my asset at will and pay Moody’s or Standard and Poor’s to give me a AAA rating who’s going to know?
It is sobering to contemplate that the market for unregulated derivatives alone, has exceeded the global GDP at a total volume exceeding 600 trillion dollars and possibly more than a quadrillion dollars (1,000,000,000,000,000 or a million billion dollars).
Exhibit 1: The Private Equity Tax Loophole Scam:
Joshua Kosman, author of The Buyout of America: How Private Equity Will Cause the Next Great Credit Crisis does a pretty good run-down on this scam on NPR’s November 16, 2009 “Fresh Air” .
According to the transcript, private equity firms (the new name for “leveraged buyout firms”) like the notorious Carlyle Group have purchased companies in a variety of industries and are now set to default on about a trillion dollars of their debts, close to the amount of default for the entire sub-prime mortgage market. Taking advantage of cheap money and lax lending, private equity firms will likely bankrupt about half of the 3,100 companies they bought, which currently employ one in ten American workers. Kosman estimates about 1.9 million jobs would be lost as a result.
By squeezing out workers, cutting research and development, private equity firms sell to each other at a massive short-term profit that devastates long-term viability. With the mattress industry, private equity firms bought Sealy, Simmons, and Serta. They then proceeded to essentially fix prices between themselves raising prices while lowering quality and durability. This worked short term, until competitors like Tempur-pedic gained market share and left the overpriced junk offered by their hollowed-out leveraged companies on the shelves. Market share and profitability for Serta dropped below pre-takeover levels.
The same formula is used with hospitals and other industries. Take a productive company with some reputation and loyalty, trash it, counting on lag time for people to depart, and make off with loot when it crashes.
Incredibly, going back to our theme of the market being “unhinged” from concrete reality, these private equity firms purchase companies with debt. Literally they put their fractional “money” down, and get the firm they are buying to take on the remainder of the debt! Ostensibly, since interest is tax-deductible, the reasoning goes, tax savings for the company accepting the debt will outweigh the disadvantages of paying down the interest and taking on the risks.
Of course, unsurprisingly, reality intercedes in a different direction. The scam is exposed. The equity firm walks away, and the company goes bankrupt. Many jobs are lost, and the whole country pays.
Exhibit 2: Fabricated Supply and Demand Scam: The Speculative Run-Up in Oil
Remember in the mid-2000’s when the media kept falling over itself to explain why gas prices were unhinged from oil supply and unrelated to any impinging world and seasonal events. Back then it was all explained away by mumbo-jumbo about the price of refining, and how certain refineries were off line. By 2007, the U.S. had begun a serious inquiry, with some settlements won for price fixing by retailers (the “bad apple strategy” that always leaves the big boys untouched), and, soon after, the prices settled down.
Now we have news of a new unexplained buoyancy in gas prices. This time commentators aren’t even bothering to pretend it has any rational connection with present supply and demand. Oil supplies are abundant, demand is down due to unemployed people staying home, and the summer driving season has yet to arrive. Instead prices are being “expectation driven” by speculators betting future upticks in the world economy, particularly China’s, will increase demand for oil.
The bitter irony of all this future possible value being more important than the present actual value is that this speculation could actually drive prices beyond the reach of people with less money now due to the poor economy and squash the very recovery that would give rise to legitimately higher prices in the future.
Again, a certain kind of twisted, counterproductive logic is allowed to run the market without correction from present, concrete conditions.
Exhibit 3: The Double Whammy Scam: Profiting from Designed Failure and Placing Bets Backed by Counterfeit Value
A recent government suit alleges that Goldman Sachs colluded with a billionaire short seller, John Paulson, to defraud investors and “construct a package of mortgage linked derivatives designed to blow up” so Paulson could make a fortune.
Continuing from AP reporter, Bernard Condon’s, article in the Washington Post, (Does Goldman Case Tarnish Cassandras of the Crash? April 21, 2010):
So-called short sellers, like Paulson, profit when stocks, mortgages or other assets they bet against lose value. In other words, the game of guessing which way prices would go was allegedly rigged in this case. That sounds bad enough. But some Wall Street veterans say the real tarnish on our erstwhile housing heroes is the package itself - regardless of whether it was designed to fail. By just linking to mortgages but not actually containing any, the Paulson package and others marketed by banks upped bets on housing to more than even the mortgages in existence, making the overall losses much bigger now that boom has turned to bust.
"Normally short sellers add rationality to a runaway marketplace," says Charles Smith, who oversees $1 billion at Fort Pitt Capital Group. "But in this case they were adding rocket fuel to the fire." The fuel here is devilishly difficult to understand. Called synthetic collateralized debt obligations (CDOs), these packages contained a series of wagers on whether thousands of homeowners would continue to pay their loans.
The key thing to grasp about them, and the part that explains how they magnified housing losses, is that they don't actually own any mortgages and so aren't limited by the number of such loans. Instead, these investments merely make "reference" to real mortgages to determine which side of the wager wins. (my emphases)
Did you catch that? This language confirms the divorce of concrete reality and the market: 1) “Linking to” mortgages but not containing any, 2) not actually owning any mortgages but being able to bet on them, 3) making “reference” to real mortgages to determine which side of the wager wins, 4) wagering bets not “limited” by material assets. The last point could theoretically involve an infinite number of bets and infinite returns on those bets.
This is well analyzed except for one point: The core of this dealing is deceptively simple, even if the instruments themselves are deliberately complex. Industry bettors simply concoct counterfeit value by leveraging their own abstract, self-assigned-value assets between themselves in a ping-pong ascending scale beyond the value of the underlying concrete assets.
The bet has both replaced and exceeded the thing it refers to. There is no “there” there. Real money is siphoned in fees from the “marks,” the pension funds who are told they are investing in highly rated, stable instruments, and then the U.S. taxpayer is asked to take up trillions of dollars of real debt in order to cover a counterfeit, undisclosed bidding/betting war.
Should I be able to make a “reference” to the Bank of England, or food, or oil, simply collect billions of real money if I bet right, and lose my never-there-to-begin-with counterfeit wealth if I don’t?
Who is the “house” in this casino in which someone can wage a series of bets on assets that actually exceed the value of the assets themselves? It’s always going to be the American taxpayer, the public, bailing out an unregulated, morally and financially reprehensible private market. Usually when someone says, “You really hate America,” it’s a disgruntled conservative with a chip on his shoulder.
Well, these profiteers actually make huge sums of money by destroying America, robbing it blind, and then sticking the American citizen with the check for any downside bets. Now let’s see why very little is currently being done to correct this.
One Nasty Hangover: Cultural Capture, Complicity, Rage, and Wondering When the Perps Will Walk
As with any successful “mark” in a con, the initial reaction by the abused is shame and efforts to pretend a scam did not happen. With the American people there is also more than a trace of complicity. People got high on visions of unlimited wealth and got a taste of their skyrocketing wealth, fictional and bubble-driven as it might have been. Some even used their houses as ATM’s.
This stems from a creeping and cleverly warped version of the American Dream, that we all could get wealthy without working if we were lucky or clever enough. In the orgy to get in on a “good thing,” people didn’t ask the serious question about whether this collusion was a morally, socially, and spiritually bad way to live your life, not to mention an abominable way to treat others and future generations.
Turns out the “good thing” is bad for everyone involved, even the crooks. People will begin to wake up to this as more jobs get lost and the fig leaves of fanfare-driven recovery fade into an uncomfortable reality—the United States and the world has been ripped off trillions of dollars, more than can be paid back even on the backs of overworking two-income families.
Rage is beginning to replace shame as the promises of recovery keeping meeting the stubborn reality of high unemployment, frozen lending, plunging commercial and residential real estate, skyrocketing college tuition, and expensive oil. People are beginning to wonder, “Where are the prosecutions; where is the accountability?” Why are citizens being counseled to liquidate their retirements to pay for their upside-down mortgages while corporations walk away from billion dollar real estate busts? Why is public money being used to bail out banks that engaged in purely private, unregulated betting?
Part of the answer is revealed in the case of Bradley Birkenfeld. Birkenfeld was an inside-the-inner-circle employee of the UBS, a Swiss Bank and one of the largest banks in the world. Swiss banks pride themselves on their “discretion” and privacy, a policy that allowed them to hide stolen Nazi wealth for decades.
So it’s clear that we are only talking financial and not moral “discretion.” In fact, Swiss banks continue to be a haven for tax cheats, international arms dealers, and anyone looking to park their ill-gotten gains outside the prying eyes of international law. After counseling clients including American politicians how to divert their money into UBS to avoid taxes, and even acting as a “concierge” to buy expensive objects for clients, Birkenfeld finally blew the whistle on the operation.
In interviews on CBS’s 60 minutes and Amy Goodman’s Democracy Now, Birkenfeld and his lawyer outlined the depth the corruption. From the April 15th, 2010 Democracy Now interview with Stephen Kohn, Birkenfeld’s lawyer:
Nineteen thousand American millionaires and billionaires had these offshore accounts. You had to be very wealthy to set one of these up. The government created an amnesty program, so if you voluntarily turned yourself in, you escaped any prosecution and even public exposure. No one would even know who you were. On the other hand, to Mr. Birkenfeld, who didn’t even have an account, Mr. Birkenfeld, who turned it in, he was sentenced to prison and was not offered immunity. So that’s the dichotomy.
Dichotomy indeed. There existed in UBS tens of billions of dollars of hidden, tax-dodges for the American clients alone, and all those clients got was a slap on the wrist and more “discretion” around their identities from U.S. law enforcement? UBS itself was merely fined 780 million dollars and forced to give over its names, a drop in the bucket for their almost 2 trillion dollar holdings. For all those wanting a progressive resurgence of the level playing field and the rule of law, there is little evidence of accountability to nourish one’s desire for justice. Hopes for real top-down prosecution are fading, but is there another tack the public can take?
Conclusion: A Possible Silver Lining
How can a world-wide economy unhinged from concrete reality perhaps result in positive changes (after, no doubt, a lot of pain)? The answer is fairly brief. Part of the problem involves mooring our own notions of the good life to our material subsistence and/or success. The notion that living luxuriously equals the epitome of the good life, has stunted our development and kept us infantilized, even with the many technological, artistic, social, and cultural advances we have made.
We still spend a vast majority of our time grinding out a living in so-so jobs that do not challenge us intellectually or creatively and that displace quality energy and time we could be spending with family, friends, community, and world.
We can make things, even necessities, cheaper than we ever have, yet we are spending more time working. In the 1990’s and 2000’s, productivity skyrocketed in the U.S., but real wages remained flat or declined. Now we see why. We have become debts serfs to financializers and market manipulators, who don’t even bother having a material stake in the game.
We can see two things from this if we are prepared to mature:
1) The good life, and even the economy itself, do not have to be primarily tied to material existence, and 2) We can do most if not all the things for ourselves that “experts” are being paid to do. We can decide to rent or share housing and watch each other’s kids. We can decide to drastically reduce our consumption, thus saving the environment and de-polluting our daily life. We can move our money to community banks, directly invest into microfinance, or lend to each other through “circle lending,” cutting out the big banks and brokerages.
We can help each other fortify and maintain our health through community programs and “medical tourism”, cutting out health insurance and medical industry parasites. We can set up or join intellectually and socially edifying cultural groups. In short we can exercise civil disobedience, refuse to be stooges, create our own spaces, and and recommit to spend time and energy where our true heart lies, free from the delusional temptations of a corporate-driven reason for life that has shown itself to be both conclusively abusive and unfulfilling.
In the end, they need us, and we don’t need them. This is the only “this life” we are going to have. It’s a lot more adventurous and enhancing to be a cultural creative then a debt slave. So, what are we waiting for?
copyright 2010 Zeus Yiamouyiannis. Permission to link to this essay is hereby granted to anyone who includes the author's name, copyright and the URL to this site. http://www.oftwominds.com/blogmay10/market-unhinged-from-reality05-10.html
Thursday, May 20, 2010
Monday, February 08, 2010
The Supreme Court Decision that Destroyed Democracy
Here is an excellent essay that lays out how the recent Supreme Court decision ultimately destroys the last vestages of democracy in America:
http://www.doomers.us/forum2/index.php/topic,60955.0.html
American democracy is dead. The Supreme Court recently ruled that corporations have a First Amendment Right to make unlimited campaign donations. In doing so, Court effectively drowned out the voice of the people by allowing unlimited corporate profits to pour into the election process. I was shocked. Corporations have First Amendment Rights? Forgive me for my ignorance, but I thought the First Amendment secured Rights of the citizens that formed the government, not corporations which are a creation of government.
My ignorance started at an early age, in civics class to be exact. In civics class, they taught me that our forefathers, men like Jefferson, wrote a document called the Declaration of Independence which expressed the novel idea ". . .that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. - That to secure these rights, Governments are instituted among "Men, deriving their just powers from the consent of the governed."
The distinction between men and corporations and their relation to government is important, because men create governments, not corporations. Corporations are created by governments. Giving corporations Constitutional rights equal to citizen rights is the antithesis of the Declaration of Independence, that Governments are created by men to protect the Rights of men against government and any of its creations. Jefferson wrote in the Declaration of Independence that Man is endowed from birth with certain unalienable Rights. He did not say corporations. Men, not corporations are arguably created by God while corporations clearly are not. Corporations are neither "born" nor endowed by their "creator" with unalienable Rights. Corporations are legal fictions created by state law.
Our forefathers and anyone with common sense would not confuse the differences between the morality of man and the souless living fiction we call a corporation. Corporations, then and now, were creatures of the state. In the United States, corporations are creatures of state law. Federal law doesn't allow for the creation of a corporation. So, whatever Rights a corporation has are determined by the law of the state in which it is incorporated. Since a corporation has no "mother" other than the state law which creates it, it has only those Rights enumerated in the statutes under which it was chartered. The Rights of a corporation are thus not endowed by a creator and are not "unalienable" as they can be taken away at any time by the state that created it. Further, not all corporations are "created" equal, some are public, some are private, some are for profit, some are not for profit. Some states give more corporate Rights and thus lawyers spend a lot of time perusing various state laws to see where it would be most beneficial to incorporate a new corporation and what type of corporation to create. The Declaration of Independence simply was not talking about corporations having unalienable Rights. It was talking about people having Rights.
The Constitution and Bill of Rights were intended to form a limited government to protect man and his unalienable Rights to Life, Liberty, and the Pursuit of Happiness from the tyranny of a government that has the power to throw him in jail, send him to war, and put him to death. Nothing was intended to protect the legal fiction we call a corporation which cannot be forced to carry a rifle into battle or put on death row. How can the First Amendment possibly be intended to allow those corporations that profit from war and running jails the Right to participate in electing officials that ultimately make the decision to go to war, order their products, sign contracts worth billions of dollars? Only living people have the First Amendment Right to participate in the election process. Why? Because it is the individual that ultimately suffers the consequences of any abuse of government power. Men and women go to war, not corporations. Men and women are buried in Arlington National Cemetary, not corporations. Men and women are the ones that go to jail, not corporations. Only those that must suffer from governmental abuse of power and not profit from it are secured the Right to vote or participate in the election process pursuant to the First Amendment.
Thus, for the US Supreme Court to hold that corporations have First Amendment Rights to participate in the election process is ludicrous and not Constitutionally based. The rights of a corporation are determined by statute and thus can be restricted by statute. The Rights of citizens, of mankind, are not. The Right of mankind to life, liberty and pursuit of happiness are given by the creator and existed before the formation of government and thus cannot be restricted by the government.
The ultimate power of a citizen is the power to vote, the Right of suffrage. It is the Right to form a government by the consent of the governed. We do this at all levels of government each election day. Each election, we form a new government and thus, so long as the Right of suffrage exist, do away with the need for the bloody revolutions of history to form a government responsive to the people. The Right to vote is the Right upon which everything in a democracy rest.
It is only through the Right to vote that a people can hope to have a moral government, one that is beholden to a morality that there is right and wrong in this world, a morality that comes from something beyond ourselves and not a morality guided corporate driven profits. If the power of the vote is diluted or taken by the government in any way, then a government of the people and by the people ceases to exist. Any hope for morality in government is lost to greed. A government corrupted by anything other than the concept of God given Rights is no longer no longer morally accountable to the people that comprise it. Thomas Paine once wrote that if the people are denied their Right of suffrage they have the Right to rebel. How could war ever be justified as being in the best interest of the people if, for example, corporations could vote? A corporation does not register for the draft. It does not suffer the pain of lost of loved ones in war. It has no fear of war. In fact, it may profit from war.
According to the Supreme Court, even though corporations have no body to kick or soul to burn in hell, even though they are creatures of state statute, corporations have a First Amendment Right to participate in the election process just like you and me. This is akin to giving them the Right to vote. It disenfranchises the voter by allowing corporations, which are not beholden to our geographic boundaries and with pocket books of billions, to participate in the political process. It allows the outside interest of corporate greed into government. The only reason corporations participate in the political process is to influence the vote, get candidates elected that further their corporate purpose. Are we to think that the plane and tank manufacturers will not jump into the political process? How much profit is made on each billion dollar bomber? How much would a corporation pay to get a Senator elected who would approve the purchase of another 100 such bombers? Does a weapons manufacturer fear going to war or profit from it? They have no skin in the game of war, only profits. I, however, do. I have kids, that could go to war. I was once a soldier. Young men registering for the draft, young men and women in service now have skin in the game of war, but how can an 18 year old compete in the political process against the deep pockets of weapons manufacturers? This is but one example. There is simply no way that the voters who live here and will be interned here can compete in the political process with the deep pockets of a corporation. Our democracy will no longer be a place of competing ideologies based on human morality, but a place of competing business interests for profit. The politics of profits will replace political morality. This ruling by the Supreme Court supplants democracy and drives a stake through its heart.
We were all shocked in the last election that it would take $20 million in campaign donations just to make a presidential candidate viable. If there is now no limit to how much a corporation can donate, and since the donors are now world-wide, how much will it take, a billion? I mean, after all, if an oil company wants the lease rights to drill off of California, how much is that worth? How much does one oil rig cost? Millions I'm sure. $20 million in campaign contributions will just be the cost of doing business. The corporations will deduct the contribution as part of the capital expenditures budget. Who needs a measly $200 campaign donation from me anymore? This idea that the door is open for corporations to compete in the political process is more novel an idea than anything Jefferson ever wrote in the Declaration of Independence. In fact, it's the antithesis of the Declaration of Independence and everything our First Amendment was designed to secure, which is the idea that governments are comprised of living and breathing people, not corporations.
The travesty doesn't stop there. In a mere stroke of the pen, the Supreme Court gave First Amendment Rights to every corporation of the world to participate in the US election process. For those who worried about closing our borders, they have just been opened in a much more dangerous way, ways that we will not be able to see and guard against. Now, the Chinese, Russians and even Bin Laden can donate unlimited funds to the candidate of their choice. Don't think so? They'll pay their couple of hundred dollars and form a new corporation right here in the US to make campaign donations.
As a lawyer, I'm not going to waste my time reading the opinion justifying this corporate takeover over American politics, which is really just the formal caisson carrying away the dead body of the American voter. I've practiced law too long to waste my time reading a nefarious court decision somehow justifying giving corporations Constitutional Rights. It won't be long before the Supreme Court gives corporations the Right to vote, and that we individuals will only be counted as 3/4 of a citizen. Citizenship means nothing anymore. I have no problem with a decision that an individual has a Right to personally donate as much as he or she wants, but a corporation? Please, and to add sin upon sin, they get to deduct the expense. Where's my personal deduction for campaign donations? Do I still get to elect on my tax return to donate $1 to the presidential campaign fund?
We have a broken government. It doesn't work anymore. The Constitution is meaningless. It's a free for all in Washington. Washington is a cesspool. There is no difference between Republicans and Democrats. Waiving the banners of liberal versus conservative is the old strategy of divide and conquer. They divide the masses while in the CONgress nothing gets done. You know why? Because they don't work for you and me. They are all working for the money makers. All that fighting you see isn't fighting over political ideology. It's simply vultures fighting over the last remaining scraps of the American pie. They will feed. We will go hungry. Proof? More Americans are on food stamps than ever. More Americans are unemployed than since the Great Depression, and all this growing poverty despite the fact that every Republican and Democratic legislature and President has spent more money than their predecessor under this idea that "trickle down economics" is good for you and me. Where's all this money going? It's not trickling down to you and me. It's going into the pockets of these bankers that get fat bonuses because their banks are too big to fail. Really? I thought this was capitalism, where good business are rewarded and poorly run businesses fail. Apparently I was lied to again, because only the individual hard working American is allowed to fail, not the big corporations. They are too important, so important, they need our tax dollars to run their businesses and pay their personal bonuses. These trillions in tax dollars are trickling down and stopping at Wallstreet to reward banks that too big to fail because they created real estate bubbles that shouldn't have been created, and then they pay themselves tax dollar bonuses for doing so, bc if they didn't get million dollar bonuses, we might not be able to hire another crook to run them. I say good, let them stand in the unemployment line like the rest of us and live on food stamps, but they don't care about my opinion, nor yours.
It's with great sadness that I, a lawyer of 17 years now, a boy raised by his own personal Atticus Finch, a boy that once swore as a paratrooper to uphold and defend a Constitution, who swore again as an attorney to uphold that same Constitution, must now confess that that same Constitution no longer acts to limit the powers of the Government, but limits instead the will of the people to govern themselves, thus allowing the government to run amok.
The Constitution was a novel idea, a novel idea to create a contract between a government and its people. It was a contract whose intent was to protect its people by defining the powers of government in a written document, and in so doing, restrict the powers of the government to encroach upon the freedoms of the people who ultimately constituted that government. It was the idea that government is of the people, by the people for the people, reduced to writing, so that the powers of that government would be restricted, preserving the rights and freedoms of the people who constituted it.
Although novel in design, the ultimate effect of having a government reduced to writing meant that ultimately the people would be forced to look to its "limited government" to interpret the Contract that attempted to limit that same government. Is it any surprise then that the Presidents created by that Constitution have issued thousands upon thousands of executive orders, an authority not expressed in the Constitution, which also have the effect of law but are never approved by Congress? Is it any surprise that the Courts have ruled taxpayers do not having standing to sue their own government? Is it any surprise that the Courts have ruled there is no duty of the police to protect its citizens? Is it any surprise that the 4th Amendment is subject now to an undeclared war on terror? That the Patriot Act and various other legislation passed in the war on terror allows domestic spying without search warrants? Is it any surprise then that banks, regulated by our government, can limit withdrawals, place holds on safety deposit boxes etc? Any surprise at legislative "earmarks"? Any surprise that Congressmen always vote themselves pay raises, won't pass campaign reform, have free healthcare and wonderful retirement plans? These unexpressed powers and benefits of government service should not come as a surprise when it is the government that interprets its own "limited" powers.
In the end, reducing the government to a written Constitution did not limit our government. It did, however, turn the idea of subsequent generations away from the idea government is by the will of the people, to the idea that they had created a limited government that would, through benevolence for its people, restrict itself.
Our forefathers and our present generation falsely assume that government, that power, can be restricted or limited by a piece of paper. Reducing to writing the idea that power can be so easily restricted only acts to restrict the ideas of the people that read and believe the false notion that power can be so easily restricted. The false belief that gov't power can be so easily limited by a written Constitution has become a yoke around the necks of generations of Americans from which the nation can be pulled by the special interest that subvert it.
http://www.doomers.us/forum2/index.php/topic,60955.0.html
American democracy is dead. The Supreme Court recently ruled that corporations have a First Amendment Right to make unlimited campaign donations. In doing so, Court effectively drowned out the voice of the people by allowing unlimited corporate profits to pour into the election process. I was shocked. Corporations have First Amendment Rights? Forgive me for my ignorance, but I thought the First Amendment secured Rights of the citizens that formed the government, not corporations which are a creation of government.
My ignorance started at an early age, in civics class to be exact. In civics class, they taught me that our forefathers, men like Jefferson, wrote a document called the Declaration of Independence which expressed the novel idea ". . .that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. - That to secure these rights, Governments are instituted among "Men, deriving their just powers from the consent of the governed."
The distinction between men and corporations and their relation to government is important, because men create governments, not corporations. Corporations are created by governments. Giving corporations Constitutional rights equal to citizen rights is the antithesis of the Declaration of Independence, that Governments are created by men to protect the Rights of men against government and any of its creations. Jefferson wrote in the Declaration of Independence that Man is endowed from birth with certain unalienable Rights. He did not say corporations. Men, not corporations are arguably created by God while corporations clearly are not. Corporations are neither "born" nor endowed by their "creator" with unalienable Rights. Corporations are legal fictions created by state law.
Our forefathers and anyone with common sense would not confuse the differences between the morality of man and the souless living fiction we call a corporation. Corporations, then and now, were creatures of the state. In the United States, corporations are creatures of state law. Federal law doesn't allow for the creation of a corporation. So, whatever Rights a corporation has are determined by the law of the state in which it is incorporated. Since a corporation has no "mother" other than the state law which creates it, it has only those Rights enumerated in the statutes under which it was chartered. The Rights of a corporation are thus not endowed by a creator and are not "unalienable" as they can be taken away at any time by the state that created it. Further, not all corporations are "created" equal, some are public, some are private, some are for profit, some are not for profit. Some states give more corporate Rights and thus lawyers spend a lot of time perusing various state laws to see where it would be most beneficial to incorporate a new corporation and what type of corporation to create. The Declaration of Independence simply was not talking about corporations having unalienable Rights. It was talking about people having Rights.
The Constitution and Bill of Rights were intended to form a limited government to protect man and his unalienable Rights to Life, Liberty, and the Pursuit of Happiness from the tyranny of a government that has the power to throw him in jail, send him to war, and put him to death. Nothing was intended to protect the legal fiction we call a corporation which cannot be forced to carry a rifle into battle or put on death row. How can the First Amendment possibly be intended to allow those corporations that profit from war and running jails the Right to participate in electing officials that ultimately make the decision to go to war, order their products, sign contracts worth billions of dollars? Only living people have the First Amendment Right to participate in the election process. Why? Because it is the individual that ultimately suffers the consequences of any abuse of government power. Men and women go to war, not corporations. Men and women are buried in Arlington National Cemetary, not corporations. Men and women are the ones that go to jail, not corporations. Only those that must suffer from governmental abuse of power and not profit from it are secured the Right to vote or participate in the election process pursuant to the First Amendment.
Thus, for the US Supreme Court to hold that corporations have First Amendment Rights to participate in the election process is ludicrous and not Constitutionally based. The rights of a corporation are determined by statute and thus can be restricted by statute. The Rights of citizens, of mankind, are not. The Right of mankind to life, liberty and pursuit of happiness are given by the creator and existed before the formation of government and thus cannot be restricted by the government.
The ultimate power of a citizen is the power to vote, the Right of suffrage. It is the Right to form a government by the consent of the governed. We do this at all levels of government each election day. Each election, we form a new government and thus, so long as the Right of suffrage exist, do away with the need for the bloody revolutions of history to form a government responsive to the people. The Right to vote is the Right upon which everything in a democracy rest.
It is only through the Right to vote that a people can hope to have a moral government, one that is beholden to a morality that there is right and wrong in this world, a morality that comes from something beyond ourselves and not a morality guided corporate driven profits. If the power of the vote is diluted or taken by the government in any way, then a government of the people and by the people ceases to exist. Any hope for morality in government is lost to greed. A government corrupted by anything other than the concept of God given Rights is no longer no longer morally accountable to the people that comprise it. Thomas Paine once wrote that if the people are denied their Right of suffrage they have the Right to rebel. How could war ever be justified as being in the best interest of the people if, for example, corporations could vote? A corporation does not register for the draft. It does not suffer the pain of lost of loved ones in war. It has no fear of war. In fact, it may profit from war.
According to the Supreme Court, even though corporations have no body to kick or soul to burn in hell, even though they are creatures of state statute, corporations have a First Amendment Right to participate in the election process just like you and me. This is akin to giving them the Right to vote. It disenfranchises the voter by allowing corporations, which are not beholden to our geographic boundaries and with pocket books of billions, to participate in the political process. It allows the outside interest of corporate greed into government. The only reason corporations participate in the political process is to influence the vote, get candidates elected that further their corporate purpose. Are we to think that the plane and tank manufacturers will not jump into the political process? How much profit is made on each billion dollar bomber? How much would a corporation pay to get a Senator elected who would approve the purchase of another 100 such bombers? Does a weapons manufacturer fear going to war or profit from it? They have no skin in the game of war, only profits. I, however, do. I have kids, that could go to war. I was once a soldier. Young men registering for the draft, young men and women in service now have skin in the game of war, but how can an 18 year old compete in the political process against the deep pockets of weapons manufacturers? This is but one example. There is simply no way that the voters who live here and will be interned here can compete in the political process with the deep pockets of a corporation. Our democracy will no longer be a place of competing ideologies based on human morality, but a place of competing business interests for profit. The politics of profits will replace political morality. This ruling by the Supreme Court supplants democracy and drives a stake through its heart.
We were all shocked in the last election that it would take $20 million in campaign donations just to make a presidential candidate viable. If there is now no limit to how much a corporation can donate, and since the donors are now world-wide, how much will it take, a billion? I mean, after all, if an oil company wants the lease rights to drill off of California, how much is that worth? How much does one oil rig cost? Millions I'm sure. $20 million in campaign contributions will just be the cost of doing business. The corporations will deduct the contribution as part of the capital expenditures budget. Who needs a measly $200 campaign donation from me anymore? This idea that the door is open for corporations to compete in the political process is more novel an idea than anything Jefferson ever wrote in the Declaration of Independence. In fact, it's the antithesis of the Declaration of Independence and everything our First Amendment was designed to secure, which is the idea that governments are comprised of living and breathing people, not corporations.
The travesty doesn't stop there. In a mere stroke of the pen, the Supreme Court gave First Amendment Rights to every corporation of the world to participate in the US election process. For those who worried about closing our borders, they have just been opened in a much more dangerous way, ways that we will not be able to see and guard against. Now, the Chinese, Russians and even Bin Laden can donate unlimited funds to the candidate of their choice. Don't think so? They'll pay their couple of hundred dollars and form a new corporation right here in the US to make campaign donations.
As a lawyer, I'm not going to waste my time reading the opinion justifying this corporate takeover over American politics, which is really just the formal caisson carrying away the dead body of the American voter. I've practiced law too long to waste my time reading a nefarious court decision somehow justifying giving corporations Constitutional Rights. It won't be long before the Supreme Court gives corporations the Right to vote, and that we individuals will only be counted as 3/4 of a citizen. Citizenship means nothing anymore. I have no problem with a decision that an individual has a Right to personally donate as much as he or she wants, but a corporation? Please, and to add sin upon sin, they get to deduct the expense. Where's my personal deduction for campaign donations? Do I still get to elect on my tax return to donate $1 to the presidential campaign fund?
We have a broken government. It doesn't work anymore. The Constitution is meaningless. It's a free for all in Washington. Washington is a cesspool. There is no difference between Republicans and Democrats. Waiving the banners of liberal versus conservative is the old strategy of divide and conquer. They divide the masses while in the CONgress nothing gets done. You know why? Because they don't work for you and me. They are all working for the money makers. All that fighting you see isn't fighting over political ideology. It's simply vultures fighting over the last remaining scraps of the American pie. They will feed. We will go hungry. Proof? More Americans are on food stamps than ever. More Americans are unemployed than since the Great Depression, and all this growing poverty despite the fact that every Republican and Democratic legislature and President has spent more money than their predecessor under this idea that "trickle down economics" is good for you and me. Where's all this money going? It's not trickling down to you and me. It's going into the pockets of these bankers that get fat bonuses because their banks are too big to fail. Really? I thought this was capitalism, where good business are rewarded and poorly run businesses fail. Apparently I was lied to again, because only the individual hard working American is allowed to fail, not the big corporations. They are too important, so important, they need our tax dollars to run their businesses and pay their personal bonuses. These trillions in tax dollars are trickling down and stopping at Wallstreet to reward banks that too big to fail because they created real estate bubbles that shouldn't have been created, and then they pay themselves tax dollar bonuses for doing so, bc if they didn't get million dollar bonuses, we might not be able to hire another crook to run them. I say good, let them stand in the unemployment line like the rest of us and live on food stamps, but they don't care about my opinion, nor yours.
It's with great sadness that I, a lawyer of 17 years now, a boy raised by his own personal Atticus Finch, a boy that once swore as a paratrooper to uphold and defend a Constitution, who swore again as an attorney to uphold that same Constitution, must now confess that that same Constitution no longer acts to limit the powers of the Government, but limits instead the will of the people to govern themselves, thus allowing the government to run amok.
The Constitution was a novel idea, a novel idea to create a contract between a government and its people. It was a contract whose intent was to protect its people by defining the powers of government in a written document, and in so doing, restrict the powers of the government to encroach upon the freedoms of the people who ultimately constituted that government. It was the idea that government is of the people, by the people for the people, reduced to writing, so that the powers of that government would be restricted, preserving the rights and freedoms of the people who constituted it.
Although novel in design, the ultimate effect of having a government reduced to writing meant that ultimately the people would be forced to look to its "limited government" to interpret the Contract that attempted to limit that same government. Is it any surprise then that the Presidents created by that Constitution have issued thousands upon thousands of executive orders, an authority not expressed in the Constitution, which also have the effect of law but are never approved by Congress? Is it any surprise that the Courts have ruled taxpayers do not having standing to sue their own government? Is it any surprise that the Courts have ruled there is no duty of the police to protect its citizens? Is it any surprise that the 4th Amendment is subject now to an undeclared war on terror? That the Patriot Act and various other legislation passed in the war on terror allows domestic spying without search warrants? Is it any surprise then that banks, regulated by our government, can limit withdrawals, place holds on safety deposit boxes etc? Any surprise at legislative "earmarks"? Any surprise that Congressmen always vote themselves pay raises, won't pass campaign reform, have free healthcare and wonderful retirement plans? These unexpressed powers and benefits of government service should not come as a surprise when it is the government that interprets its own "limited" powers.
In the end, reducing the government to a written Constitution did not limit our government. It did, however, turn the idea of subsequent generations away from the idea government is by the will of the people, to the idea that they had created a limited government that would, through benevolence for its people, restrict itself.
Our forefathers and our present generation falsely assume that government, that power, can be restricted or limited by a piece of paper. Reducing to writing the idea that power can be so easily restricted only acts to restrict the ideas of the people that read and believe the false notion that power can be so easily restricted. The false belief that gov't power can be so easily limited by a written Constitution has become a yoke around the necks of generations of Americans from which the nation can be pulled by the special interest that subvert it.
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