22 January 2010

The End of Democracy?

In a 5-4 decision this week, the Supreme Court ruled that the government cannot prevent corporations from spending money on behalf of political candidates. This decision overturned two longstanding precedents, and will have an enormous impact on future elections. As President Obama described it, the decision was “a major victory for big oil, Wall Street banks, health insurance companies and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans.” Supporters of the decision defended it on free speech grounds, asserting that the Justices rightly applied the protections of the First Amendment to corporations.

I find this decision frightening. Imagine, if you will, a candidate for high office (new or incumbent) who dares to suggest that a large corporation (or group of corporations) should pay a slightly higher tax. For example, a carbon tax on fossil fuel products in order to pay for remediation of global climate change, maybe a modest surtax like an additional 1% of profits. For a corporation like ExxonMobil, that would translate into a $450 million tax (based on 2008 figures). In order to save $450 million, wouldn't you imagine that ExxonMobil would be willing to spend tens of millions of dollars to defeat said candidate, perhaps even $100 million? Now combine ExxonMobil with the rest of Big Oil, and you can rapidly collect many hundreds of millions of dollars to defeat an environmentally-minded Presidential candidate. For comparison, candidate Obama spent about $740 million in the 2008 election cycle, while candidate McCain spent about $330 million. Thus, it's easy to see how one industry sector could equal the entire spending of a single candidate! Now combine Big Oil with Wall Street firms and health insurance and pharmaceutical companies, and the dollars could quickly climb into the billions.

There are two equations at work here that enter into the Supreme Court's calculus on behalf of corporate political spending: money = speech, and corporations = persons. I consider both of these equations to be erroneous and in serious need of rethinking. For now, however, I want to focus on the latter equation, the legal fiction of corporate personhood – that is, the notion that corporations are to be treated like “persons” under the law. This concept originally arose not as a benefit to corporations, but rather as a benefit to their creditors (or those who would seek to recover damages inflicted by the actions of a corporation). Before this concept existed, corporations could argue that since they were not “persons” under the law, they could not be subject to lawsuits, and furthermore, other legal protections guaranteed the limited liability of shareholders of corporations, meaning that they also could not be sued for actions of the corporation. In such a scenario, creditors could not seek legal relief for claims against corporations. Enter the corporate personhood fiction. If the courts treated corporations as persons under the law this dilemma is resolved, and individual people (“natural persons”) feel safe doing business with corporations, banks feel safe extending credit to corporations, and corporate businesses thrive.

Over time, however, this legal fiction of corporate personhood has expanded far beyond its original intent, such as in this week's Supreme Court case. What's more, the Court has completely flipped the original intent of holding corporations liable for their actions, and now appears more interested in protecting corporations rather than those who do business with them (i.e., “natural persons”). The evolution of this concept has been ongoing, and this isn't the first Court decision to move the concept further down what I consider to be a troubling path. It is, however, a major leap forward along that path, a truly “activist” decision by a group of Justices supposedly dedicated to a “non-activist” judicial philosophy. Where does that path lead, and what will America look like at the end of the road? Let's just say that if you think politicians are bought and paid for by corporate interests now, you ain't seen nothing yet.


Unknown said...

It is a little known fact that the constitution was established to protect corporations--not people. All subsequent laws were written with that intent; hence the slowness to civil and human rights throughout our spurious history. This ruling is not a surprise except that the truth of our system is now out in the open. This is not a country for the people. One of our few poverty stricken presidents so beloved was just wrong, poor fellow.

Dan Brown said...

Just a few points you’ve conveniently overlooked, Dan:
1) Media corporations have had free speech, including political speech, since (before)our founding. Witness: Federalist Papers, Tom Paine, etc.) Why shouldn’t all corporations? (thank you, Mitch McConnell).
2) You failed to mention that this decision frees up labor unions to advocate for political candidates without limit as well. (Note that this Supreme Court ruling did not remove restrictions on directly contributing to a candidate’s campaign. It only permits spending in advocacy of (or opposition to) a candidate.)
The argument that it will open the floodgates to increased spending on behalf of candidates certainly augers well for the party that business supports over the party that labor supports. And that would not be the Progressives (witness the stock market the last few days, as the President attempts to get in touch with “the people” with his bank bashing and other misguided understandings of Populist unrest. His coterie, as well as many Republicans as well, are the ones who are truly “out of touch.” Witness: Tea Parties in April, Town Hall meetings in August, then Virginia, and New Jersey in November, and now Massachusetts!
And Dan, I’m surprised, since you are a lawyer, that you could be so irrational as to say, “I consider both of these equations* to be erroneous and in serious need of rethinking.” You surely must know that the case law, including long-standing Supreme Court precedents, have hardened these principles beyond reversal.
*The standing of the corporation as a “legal person” is immutable. The standing of money as speech is fast becoming so.
Finally, the saving grace for every American voter in this historic decision is this: Congress will (and should) make regulations requiring full disclosure and therefore transparency. With the internet, and bloggers on the left (like you) and on the right will make sure that corporate “influence” is well known to the electorate, and the voters will decide for the corporation if the money is well spent. Then, based on the outcome on election day, the candidate will decide if the support is welcomed.

Dan said...

@Dan, you are quite right with both points #1 and #2. The potential problem with #1 is when media corporations hold themselves out as objective journalistic sources and yet slant the truth (as happens on both sides of the political landscape). As for #2, maybe I've lived in the South for too long, but I don't see the feckless labor unions in this country as any match for the corporations.

I also agree that disclosure and transparency regulations will be helpful to a degree, but I'm not sure I have enough faith in the public or the media (see #1 above) to do a good enough job as watchdogs.

As for the standing of corporations as "persons", I don't think that there is any reason to challenge that status when it comes to business dealings (as per my brief history summary). My issue is that they are now on an equal playing field with "natural persons", having been granted First Amendment rights just like natural person, and I'm worried about unforeseen consequences herein. Example: Company X decides to fire every employee who is a professing Christian, and henceforth hires only Muslims, or Buddhists, or atheists, or whatever (this having nothing to do with their business – they're not a religious group, just a widget manufacturer). The fired employees sue, claiming that under federal employment laws the Company isn't allowed to discriminate against them based on their religion. The Company challenges said federal law as unconstitutional, claiming that it (the Company), as a “person” entitled to First Amendment rights, was merely exercising its own religious practices, and Congress isn't allowed to make any law prohibiting their free exercise of religion. Is this really the kind of public policy we want to allow?

Keith said...

I mostly agree with Dan Brown, but the point of disagreement leads to an opposite conclusion on the decision. I actually think the idea that corporations are persons is philosophically defensible, as well as settled law. The real problems with the decision are the money-is-speech principle - the government taxes, redistributes, spends, prints and does lots else to money, none of which make sense as applied to speech. And bribery - the real de facto issue here - is simply not a concern with speech - we accept and even applaud legislators who are persuaded to vote on the basis of spoken and rational argument, and supposedly arrest those who are persuaded to vote on the basis of proffered cash.

Further, even if money=speech, the idea that regulating speech/money is forbidden itself flies in the face of numerous precedents. See http://www.slate.com/id/2242210/pagenum/all/#p2.

Dan Brown said...

Ah, the tyrant revealed! Your admitted -- no, avowed lack of “faith in the public or the media” (and the labor unions to boot!) is what leads the Progressive left to the absolute position that it know best what is right for the American people; hence, the ignoring or dissing and outright dismissal of the multitudes across this land who disagree and voice their opposition (even in “liberal” Massachusetts) to Obamacare, and the Nancy & Harry show. And please don’t attribute the election outcome solely to the candidates, as the White House and Democrat Congressional leaders did. That is simple denial.
I will admit, however, that there is lots of evidence to support your view that the traditional media (NBC, and it’s clone MSNBC, ABC, CBS, CNN, NPR, NYT, WP, etc) are dying. And “Air America” is, gratefully, dead! In contrast, by some (admittedly self-serving) reports, Fox News is soaring, surpassing at times all the other broadcast media combined! What does that tell you about “the people?” And, I know: you want to tell me it confirms your lack of faith in the people. LOL. You’re a smart guy, Dan, but not the only smart guy on the block. You are, however, the only Christo Fascist I know. (Maybe you’d like to explain that one to your readers.)
As for the concern that you are “worried about (the) unforeseen consequences” of this week’s Supreme Court decision, your example is really “tortured” (pardon the use of the expression on this blog, but it is apt). Ad the Zen Master said, in the story told by “Gus” (sp.) in the movie “Charlie Wilson’s War,” “We’ll see.”
Finally, Dan, shame on you for your blog’s title, “The Death of Democracy?” The question mark device is as old as the hills, and as lame. Your hyperbole is exceeded only by your arrogance, my friend.

Michael said...

Good post Dan. I agree that the Supreme Court's decision is very dangerous. Check out these websites for ways we can take action to respond. http://action.citizen.org/t/10315/petition.jsp?petition_KEY=2190
Other good articles about the issue can be found at: http://www.thenation.com/blogs/thebeat/519819/teddy_roosevelt_was_right_ban_all_corporate_contributions

Tom Degan said...

Are corporations really persons?

Do corporations think?

Do corporations grieve when a loved one dies as a result of a lack of adequate health care?

If a corporation ever committed an unspeakable crime against the American people, could IT be sent to federal prison? (Note the operative word here: "It")

Has a corporation ever given its life for its country?

Has a corporation ever been killed in an accident as the result of a design flaw in the automobile it was driving?

Has a corporation ever written a novel that inspired millions?

Has a corporation ever risked its life by climbing a ladder to save a child from a burning house?

Has a corporation ever won an Oscar? Or an Emmy? Or the Nobel Peace Prize? Or the Pulitzer Prize in Biography?

Has a corporation ever been shot and killed by someone who was using an illegal and unregistered gun?

Has a corporation ever paused to reflect upon the simple beauty of an autumn sunset or a brilliant winter moon rising on the horizon?

If a tree falls in the forest, does it make a noise if there are no corporations there to hear it?

Should corporations kiss on the first date?

Our lives - yours and mine - have more worth than any corporation. To say that the Supreme Court made a awful decision on Thursday is an understatement. Not only is it an obscene ruling - it's an insult to our humanity.

I like the cut of your jib, Dan!


Tom Degan
Goshen, NY

Dan Brown said...

OK, you win, Tom. A corporation is not a "natural person." But, I think Dan Anonymous, the US Supreme Court, and I already agree with you on that. I guess that's why you call it a "rant" It's full of emotionalism and redundancies.
PS: Dan A.is not a sailor; he's a golfer.

Dan said...

Correction: I'm not a lawyer, a thief, or a banker, but a son of a son of a sailor (and the son of a daughter of a sailor, but that's less lyrically alliterative).

Dan Brown said...

Dan, I think you are wise to lighten up, to straddle (i.e., prevaricate), and to move on. Bon apetit!

Dan Brown said...

Well, well. Just between the two of us (as your initiation of "comment modification" has dictated), Q.E.D.

Maybe you should get out of the kitchen, Dan, if you can't take the heat, even in your own "house."

Even President Obama has chosen to pivot, become a phony populist, and "fight."

Dan said...

Actually, Dan, I invoked the "comment moderation" feature in lieu of the "post verification" feature because someone else told me it was annoying to have to type in those silly characters. I invoked control over comments in the first place for an entirely unrelated reason - I'd been getting spam comments posted encouraging my readers to go to websites to buy various sexual prowess-enhancing products! Apparently the spammers have figured out another avenue of attack.