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More corporate First Amendment Rights?

Via Truthout comes this report from PR Watch:

In a new lawsuit against the Securities and Exchange Commission (SEC), big energy extractors are pushing for carte blanche in their interactions with foreign governments, making it harder to track whether their deals are padding the coffers of dictators, warlords, or crony capitalists. The United States Chamber of Commerce, American Petroleum Institute, the Independent Petroleum Association of America, and the National Foreign Trade Council filed a lawsuit on October 10, 2012 against a new SEC rule, which requires U.S. oil, mining and gas companies to formally disclose payments made to foreign governments as part of their annual SEC reporting.

Chamber of Commerce  National Chamber Litigation Center quote says:

On October 10, 2012, the Chamber and its association partners filed a complaint with the U.S. District Court for the District of Columbia and a petition for review with the U.S. Court of Appeals for the D.C. Circuit, charging that the rule violates the First Amendment, the Administrative Procedure Act (APA), and the Exchange Act of 1934. The lawsuits allege that the SEC failed to conduct an adequate cost-benefit analysis as required by law, that the SEC grossly misinterpreted its statutory mandate to make a “compilation” of information available to the public, and that the regulation is incompatible with the First Amendment.

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Corporations are not people and Thomas Hartmann

by Beverly Mann

Thomas Hartmann writes via Truthout:

Most Americans don’t realize that the idea that ‘corporations are people’ and ‘money is speech’ are concepts that were never, ever considered or promoted or even passed by any legislature in the history of America. Neither were they ever promoted or signed into law by any president – if anything, the opposite, with presidents from Grover Cleveland in 1887 to Barack Obama in 2010 condemning them.

And Congress and the executive branch are the two of the three branches of government that are elected by the people, and thus the only two to which the founders of this country and the framers of the Constitution gave the right to create laws.

The Supreme Court is so much not supposed to create law, that Article 3, Section 2 of the Constitution even says that it must operate ‘under such Regulations as the Congress shall make.

There are two problems with what Hartmann writes. First of all, there needs to be an explicit distinction made between the idea of “corporate personhood” in law, generally, and “corporate personhood” in a constitutional-rights sense. Hartmann, like so many others who are appropriately outraged by Citizens United and earlier corporate-free-speech Supreme Court opinions, clearly intends his comments to apply only to the corporate-free-speech Supreme-Court-created laws, just as the drafters of the proposed constitutional amendment regarding corporate personhood do.


But the “corporate personhood” fiction actually was created, I believe, simply as a practical way to allow corporations to own property. Later, that fiction enabled corporations to sue and be sued, to be subject to criminal laws and civil regulatory law and to be charged with violations of those laws and to be fined for violations and required by court order to comply with (say) a particular environmental or securities regulation or whatever. State statutes, which provide for the creation of corporations, and federal statutes do provide for these things, and although they don’t use the term “corporate person,” these laws (e.g., tax laws, environmental laws, lawsuit procedural laws) do include corporations in the statute’s “definitions” section, in defining the term “person”, in order to make clear that the statute or regulation does apply to corporations.

So the problem of corporate personhood is that the Supreme Court has pronounced corporations “persons” for purposes of First Amendment speech rights. Constitutional rights apply only to persons, so this pronouncement of personhood for corporations in a constitutional sense, rather than just a statutory sense (as in, say, corporations can own property), was a prerequisite to the accordance of First Amendment free-speech rights to corporations. This is a really important distinction.

The distinction gets complicated when you consider that there are some constitutional rights that most people would think do and should pertain to corporations: the Fourth Amendment’s guarantee against warrantless searches and seizures, and the Fifth and Fourteenth Amendments’ due and property “takings” provisions, for example. But that’s because actual people do own direct monetary shares of corporations, and so corporate property does belong to real people, and because the constitutional protections at issue there—against warrantless searches and seizures of documents, for example—would compromise those rights of real persons (the corporation’s employees or customers, for example).

The First Amendment right to advocate for a particular political candidate or party or political position, using shareholders’ money, though, is hardly a right that logically can be said to derive from those shareholders’ First Amendment speech rights, the exercise of which is cannot reasonably be said to be intentionally collective; the specific expenditure is not foreseeable to shareholders, many of whom would be horrified by it. Of course, the Fab Five majority in Citizens United did pretend otherwise. But then, declaring clearly false facts in order to arrive at their result in that case is the very hallmark of that opinion.

But here’s another problem with what Hartmann and others are arguing: This claim of theirs that the courts have no authority to declare render decisions—rules of law—concerning issues of constitutional law is profoundly dangerous. It mirrors what Clarence Thomas and Antonin Scalia regularly claim, except of course when they themselves are simply fabricating some new rule of constitutional law.

I love Thom Hartmann. But I think his position here needs some refinement.

Beverly


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Senators Levin and Isakson: millionaire surtax vs corporate repatriation subsidy

by Linda Beale

Senators Levin and Isakson: millionaire surtax vs corporate repatriation subsidy

The PBS News Hour last night interviewed Senators Levin and Isakson on the jobs bill (video and transcript available here).

Isakson was first off.  He sounded like a right wing sound bite machine: we’re overregulating businesses so we need a “time out” on regulation.  And we need to pass a repatriation tax holiday so businesses can get the money they need to invest and create jobs.

Levin was asked what he thought about that.  He didn’t even comment on the repatriation sound-bite–after all, he has a report just out that investigates the idea of repatriation and concludes it was a losing proposition.   See  Repatriating Offshore Funds: 2004 Tax Windfall for Select Multinationals, Permanent Committee on Investigations Majority Staff Report, Senate (Oct. 11, 2011) (listing a series of findings showing that repatriation failed to accomplish its goals).**

But Levin did respond to the “it’s regulations and taxes that are killing job creation” GOP mantra.  A recent poll of small business owners showed that small business owners aren’t worried about regulations or taxes.  They just need customers.   So you can help things out by helping small businesses and helping people become customers.

Makes sense, doesn’t it?  It’s certainly an argument made here on ataxingmatter many times: the way to create customers is to stop the collapse of the American middle class with programs like infrastructure projects.

Woodruff then asked Isakson what he had to say to that.  His response–yeah, well, the vote we have tonight is the pay-for–a surtax on millionaires.  And there are 392,000 small businesses that a surtax on millionaires is going to hurt.

So now Woodruff asks Levin what about this argument that the surtax is gonna hurt small businesses.

Levin set the facts straight on his colleague’s claim that a surtax on millionaires would hurt all those small businesses.  He said quite clearly that the facts show that only a very small percentage of small business owners earn the million that would put them in the group subject to the surtax.  So the issue is taxing millionaires, whose share of the income has skyrocketed in the last few years compared to the middle class, which has stagnated.  The surtax would mainly hit the overpaid CEOs of big corporations, etc.

Funny, Judy Woodruff (an undergraduate classmate of mine back at Duke, by the way) didn’t blink an eye.  You’d think the next question to Isakson would be–given the fact that only a tiny proportion of small businesses would be subject to the millionaire surtax, Senator, a fact that has been pointed out numerous times, why do you insist on claiming that it would hurt all small businesses.  But she didn’t.  The PBS station is worried about appearing “balanced” and that means you can’t call a fact a fact and point out that a presenter is stating something that isn’t supported in the facts.  You let an interviewee do it, if they can get it in, but you let the other side get by with continuing to repeat its fact-less sound bites.

So Senator Isakson’s response was:

[Senator Levin’s] response to that question just proves this is all about political messaging and really doesn’t have anything to do with purpose, because if they really cared about small business, they would exempt limited liability corporations, S-corporations and sole proprietorships from the application of this tax. Then they’d only be taxing millionaires. But they’re going after small business as well.\

Now, folks, that’s a ridiculous response.  (Woodruff didn’t say that, but I will.)  It’s ridiculous because Levin gave the facts–small businesses don’t complain about regulations, most small businesses don’t make millions and wouldn’t be subject to the surtax.  And Isakson had the gall to call that factual response “political messaging” , even while Isakson continued with his GOP soundbite political message campaign of implying that small businesses need to be protected from the millionaires surtax!

Note also that Isakson suggested that tif there had to be a surtax, it should exempt LLCs, S corporations and sole proprietorships.  He offered no justification whatsoever for that terribly broad exemption (other than the proffered “it’ll hurt small businesses that Levin already soundly defeated).  If you’re making millions from your business, you are successful enough to pay the tax.  If you are not, you won’t have to pay the tax.  If you exempt LLCs (mostly operated as partnerships) and S corporations and sole proprietorships, you are exempting a lot more than small businesses!  Those include hedge and private equity funds (some managers of which make hundreds of millions a year), real estate partnerships, huge businesses operating as sole proprietorships, and  people like John Edwards who make millions through their S corporations etc. etc. etc.  If you couple that with the zero taxation on capital gains that most on the right are pushing for, that’d likely mean that the CEOs of multinational corporations would be the ONLY millionaires and gazillionaires that the tax would hit!

But did Judy follow up along those lines?  Nope.  Instead she asked Isakson whether the country doesn’t need stimulus rather than cutting at this fragile time for the economy.

His response was to deliver the right wing political message yet again:

1.  the right’s response to the fact that the last stimulus made a huge difference–a claim that it didn’t solve tthe problem permanently (with the implication that we might as well not have done it).  Says Isakson (paraphrasing):  Last bill paid teachers, but once the bill is gone, there’s no money to pay them.  (Implication–the stimulus was useless.  I doubt that the teachers whose jobs were saved for a few years would agree or the students who were saved from overcrowded classrooms or the lack of a music program.)

2.  the right’s response to the need to enact a stimulus rather than cutting–we’ve got a debt problem and a debt crisis.   Isakson says “we’re at the breaking point on leverage” so he wants to “inspire the private sector to reinvest in our country and reinvest in businesses.”   (of course, this overlooks the fact that the “debt crisis” was caused by right-wing obstructionism. or that the US Treasury can borrow now at the cheapest rate we can expect to see forever once this crisis ends–we should borrow cheap while we can, spend it on infrastructure and job creation.  It also roundly ignores the historic pattern that businesses won’t invest in US business when (a) we allow them to expatriate assets to create businesses abroad without taxing them on the built in gains in those assets, (b) we allow them to fire workers with ease because we’ve so weakened our labor laws that workers find it almost impossible to form unions and have any negotiating power with their bosses and (c) we continue to give businesses tax breaks for mergers and consolidations that create multinational super businesses that have no loyalty to the country  (Jeff Immelt said as much in the previous night’s NewsHour broadcast).

_______

**The report lists the findings as follows:

1. U.S. Jobs Lost Rather Than Gained; 2. Research and Development Expenditures Did Not Accelerate;  3. Stock Repurchases Increased After Repatriation; 4. Executive Compensation Increased After Repatriation; 5. Only A Narrow Sector of Multinationals Benefited; 6. Most Repatriated Funds Flowed from Tax Havens; 7. Offshore Funds Increased After 2004 Repatriation; 8. More than $2 Trillion in Cash Assets Now Held by U.S. Corporations ; 9. Repatriation is a Failed Tax Policy

originally published at ataxingmatter

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Public sector collective bargaining and secrete corporate political campaign contributions

Jonathan Zasloff asks at The Reality-based Community blog New Directions in GOP Political Economy

Quite subtle, actually:

Public-sector collective bargaining is unhealthy and distorts democracy because it enables workers to influence the government which negotiates with them; but

Unlimited and secret corporate political campaign contributions are necessary to democracy because they enable corporations to influence the government which regulates them.

Discuss.

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"Run Government Like a Business" = Deficit Spending

We’re used to that line by now. Ross Perot—one of the more prominent people who got rich due to government contracts—used it, Carly Fiorina and Meg Whitman are using it (while desperately hoping you don’t pay attention to how they ran Lucent/HP or eBay), and Aaron Sorkin even had Charles Grodin say it in Dave, if only to establish his Sensible Centrist cred.

So how are businesses running their debt-laden firms? Ask the WSJ and ye shall receive:

U.S. corporations have taken full advantage of low interest rates, going on a bond-issuing binge that has left them with tons of cash, which they appear to be holding largely as insurance against a new bout of financial turmoil, rather than spending on new hires. Nonfinancial companies were sitting on about $8.4 trillion in cash as of the end of March, or about 7% of all company assets, the highest level since 1963. Even before its [$1.5 billion at the bargain-basement interest rate of only 1%] bond issue, IBM had $12.3 billion in cash and short-term investments, which accounted for about 12% of all its assets.

The WSJ is, of course, worried about The Savers:

Meanwhile, though, savers are seeing some of the worst nominal returns in decades. As of June, the weighted average interest rate on deposits, money-market funds and other highly liquid investments stood at only 0.29%. Returns on riskier investments aren’t great, either: The average yield on near-junk bonds with maturities close to 30 years stood at about 5.9% this week.

As Brad DeLong said recently, in a slightly different context, “I share [the] belief that these numbers ought to be higher. But I also think that I don’t have very good reasons to claim that I am right that they should be higher.”

Neither does the market.

And it’s not as if those companies were all saving during the Good Times. Indeed, they were arguably more poorly managed than the government. As Floyd Norris noted almost two years ago:

Over the last four years, since the buyback boom began, from the fourth quarter of 2004 through the third quarter of 2008, companies in the S&P500 showed:

Reported earnings: $2.42 trillion
Stock buybacks: $1.73 trillion
Dividends: $0.91 trillion

The net flows there is -$220B, give or take a billion. It’s spending roughly $1.10 for every dollar you earn. And, to make matters worse, nearly twice as much was spent to make people go away (buybacks) than to reward loyalty (dividends).

If the government really were to be run like a successful business—the way the S&P500 are run, the way IBM is run—they would be borrowing long-term right now at that 2.82% 10-year or even than 4.00% 30-year rate.

If it’s good enough for IBM, it should be good enough for the U.S. Government. The Mitt Romneys and Ross Perots have been telling us that for years; many we should listen?

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CORPORATE CASH HOLDINGS



Recently there has been a claim that corporations are holding large sums of cash rather than investing it because they are fearful of Obama’s “socialist policies”.

But if you compare corporate retained earnings to the GDP GAP lagged one year it looks like the debate should be over why corporations are investing so much. This determinate of corporate retained earnings implies that corporations are actually holding much less cash than the traditional relationship implies they should be.

Commenters are saying this analysis should use cash flow rather than retained earnings.
OK, here is a chart comparing corporate cash flow to retained earnings.


The net cash flow data shows essentially the same pattern as the retained earnings data. It
does not make any difference except at the last couple of observations where the cash flow data is turning down. So the only difference really contradicts the argument that Obama is scaring corporations into hording cash even more than the retained earnings data does. It shows net cash flow as a % of profits falling over the last two quarters — just the opposite of what would be the case if Obama was scaring corporate decision makers.

Both series show that corporate decision makers appear to be much less concerned than they were at a very comparable point in the Reagan administration when the GDP GAP was about the same.

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Corporations are now your brother and sister

by Divorced one like Bush

If you haven’t heard, the SCOTUS just ruled 5/4 that corporations are now your brother and sister under the constitution. 

Hey brother, can you spare a dime?

To bad corporations didn’t have to fight in the Revolution and actually bleed to get such rights.

More seriously, the court ruled that free speech is protected not based on the ability to bleed human genetic material.  An artificial entity is just as protected.  What happens now as artificial intelligence and robots become more capable.  All those programed rules to protect us from something going wrong can now be considered a violation of the electronic entities free speech.

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Doing the Economy One Better

Seems there is a movement afoot to do the economy one better. There will be a conference Beyond GDP held in Brussels in November.

GDP is the best-recognised measure of economic performance in the world, often used as a generic indicator of progress. However, the relationship between economic growth as measured by GDP and other dimensions of societal progress is not straightforward. Effectively measuring progress, wealth and well-being requires indices that are as clear and appealing as GDP but more inclusive than GDP—ones that incorporate social and environmental issues. This is especially important given global challenges such as climate change, global poverty, pressure on resources and their potential impact on societies.

The purpose:

The European Commission, European Parliament, Club of Rome, OECD and WWF will host a high-level conference with the objectives of clarifying which indices are most appropriate to measure progress, and how these can best be integrated into the decision-making process and taken up by public debate.

This link is to a list of indicators that are being discussed.

While people look to come up with a better measurement, there is a movement coming to your town that has happened throughout the rest of the world: The Solidarity Economy Network.

The Solidarity Economy offers an alternative economic framework to that of neoliberal globalization – one that is grounded in solidarity and cooperation, rather than the pursuit of narrow, individual self-interest.• It promotes social and economic democracy, equity in all dimensions (e.g. race, class, gender…) and sustainability.• It is pluralist and organic in its approach, allowing for different forms and strategies in different contexts, and is open to continual change driven from the bottom up whether in civil society or the marketplace.

Of course, a move to do the economy one better would not be complete without a discussion of the “corporation”.
There is a Summit at Faneuil Hall, Boston asking: Are Corporations equipped for the 21st century?

The Summit…is inspired by the growing tension between the emergence of the corporation as the world’s most powerful and innovative social institution and the growing severity of social and environmental problems that plague billions of people. As the tension between these two realities grows, the roles, responsibilities and rights of business are the subject of increasing controversy, as are the relationships of the corporation to government and civil society.

The Summit marks an historical moment for considering how the most influential social institution of our time can serve the broader public interest essential to its own long-term prosperity, and to begin designing corporate forms that recognize the reciprocity between private and public interests.

Enjoy.

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