More, on excessive power of corporations ... by gimleteye

The most dismal result of the economic collapse (oh, it is now 'a jobless recovery') is that trillions of taxpayer dollars are backstopping the mismanagement of the nation's largest financial institutions-- that lent during the housing boom with reckless abandon like drunken sailors on shore leave--and Congress still is nowhere near passing meaningful regulation of those institutions from engaging in excessive risk through trading fraudulent derivatives. Derivatives, based on risk models invented by "quants"-- 20 year olds supervised by middle aged men and women who had no clue beyond their pay packages -- are the financial nuclear bomb that went off, bringing down Lehman Brothers and more than a hundred banks around the nation. Many more banks are dead men walking: kept alive with a wink and a nod by regulators who don't offer the same breaks to individual borrowers. It is a sad fact: if you owe the bank a few million, the bank owns you. If you owe the bank a few hundred million, you own the bank. There is a simple reason that regulatory reform is stuck in irons, beyond the agitating for turf by government regulators. The power of corporations in Washington.

One example of the abuse of corporate power is the overbearing influence of the state's largest electric utility, Florida Power and Light. The corporation is pushing around regulators and legislators and, even, the Governor and Cabinet in its quest for new nuclear power at the edge of Biscayne National Park in South Dade. The power of corporations is in the current focus of the US Supreme Court. The New York Times makes a concise case in an editorial today, noting with irony that conservatives on the court-- appointed by Republican presidents-- are poised to expand the power of corporations in American political life. Strange, how the political party that claims to be grounded in limited government and individual rights is the chief defender of corporate power.


September 22, 2009
Editorial
The Rights of Corporations

The question at the heart of one of the biggest Supreme Court cases this year is simple: What constitutional rights should corporations have? To us, as well as many legal scholars, former justices and, indeed, drafters of the Constitution, the answer is that their rights should be quite limited — far less than those of people.

This Supreme Court, the John Roberts court, seems to be having trouble with that. It has been on a campaign to increase corporations’ legal rights — based on the conviction of some conservative justices that businesses are, at least legally, not much different than people.

Now the court is considering what should be a fairly narrow campaign finance case, involving whether Citizens United, a nonprofit corporation, had the right to air a slashing movie about Hillary Rodham Clinton during the Democratic primary season. There is a real danger that the case will expand corporations’ rights in ways that would undermine the election system.

The legal doctrine underlying this debate is known as “corporate personhood.”

The courts have long treated corporations as persons in limited ways for some legal purposes. They may own property and have limited rights to free speech. They can sue and be sued. They have the right to enter into contracts and advertise their products. But corporations cannot and should not be allowed to vote, run for office or bear arms. Since 1907, Congress has banned them from contributing to federal political campaigns — a ban the Supreme Court has repeatedly upheld.

In an exchange this month with Chief Justice Roberts, the solicitor general, Elena Kagan, argued against expanding that narrowly defined personhood. “Few of us are only our economic interests,” she said. “We have beliefs. We have convictions.” Corporations, “engage the political process in an entirely different way, and this is what makes them so much more damaging,” she said.

Chief Justice Roberts disagreed: “A large corporation, just like an individual, has many diverse interests.” Justice Antonin Scalia said most corporations are “indistinguishable from the individual who owns them.”

The Constitution mentions the rights of the people frequently but does not cite corporations. Indeed, many of the founders were skeptical of corporate influence.

John Marshall, the nation’s greatest chief justice, saw a corporation as “an artificial being, invisible, intangible,” he wrote in 1819. “Being the mere creature of law, it possesses only those properties which the charter of its creation confers upon it, either expressly, or as incidental to its very existence.”

That does not mean that corporations should have no rights. It is in society’s interest that they are allowed to speak about their products and policies and that they are able to go to court when another company steals their patents. It makes sense that they can be sued, as a person would be, when they pollute or violate labor laws.

The law also gives corporations special legal status: limited liability, special rules for the accumulation of assets and the ability to live forever. These rules put corporations in a privileged position in producing profits and aggregating wealth. Their influence would be overwhelming with the full array of rights that people have.

One of the main areas where corporations’ rights have long been limited is politics. Polls suggest that Americans are worried about the influence that corporations already have with elected officials. The drive to give corporations more rights is coming from the court’s conservative bloc — a curious position given their often-proclaimed devotion to the text of the Constitution.

The founders of this nation knew just what they were doing when they drew a line between legally created economic entities and living, breathing human beings. The court should stick to that line.