Monthly Archives: June 2014

The National Defense Authorization Act of 2012, designed to defend the U.S. and signed by President Obama on Dec. 31, 2011 contains ominous provisions that could undermine basic freedoms. Two weeks before the president approved the NDAA, the ACLU released a statement explaining parts of the legislation “could authorize the U.S. military to pick up and imprison, without charge or trial, civilians anywhere in the world.”

Many opponents of the NDAA are concerned the bill could foster indefinite detention and the practice could be expanded to jail innocent people, instead of suspected terrorists.

The NDAA has been a routine bill the president always signed to grant annual funding to the Department of Defense, according to an article by Robert Johnson for Business Insider. Senate Armed Services Chairman Carl Levin, D-Mich., and Senator John McCain, R-Ariz., sponsored the provisions for the legislation. Though Obama vowed not to approve the NDAA if it included such amendments, he changed course.

Funding for the Department of Defense was about to expire and the provisions were added at the last minute, according to a Washington Post article by David Nakamura. The president decided to act.

“I have signed this bill despite having serious reservations with certain provisions that regulate the detention, interrogation and prosecution of suspected terrorists,” Obama said in a signing statement that accompanied the legislation.

Margaret Stock, an Alaska-based attorney specializing in immigration law and national security issues, explained the NDAA is a huge bill and it is common for senators and representatives to insert provisions that could never pass on their own. Most people are unaware the president can only veto entire bills, not parts of them.

“[Presidents] don’t want to veto the whole bill because it’s going to cause a whole bunch of stuff that they want to be disapproved,” Stock said.

Word play

The Authorization to Use Military Force provided a foundation for some of the language in the NDAA. The AUMF became law on Sept. 18, 2001.

The joint resolution between the House of Representatives and the Senate authorized the president of the United States “to use all necessary and appropriate force against those nations, organizations or persons he determines planned, authorized, committed, or aided the terrorist attacks that occurred on September 11, 2001, or harbored such organizations or persons.”

Obama’s detention authority statement, documented in a court brief from March 13, 2009, incorporated similar language to the AUMF, according to a report for the Congressional Research Service, authored by two legislative attorneys, Jennifer K. Elsea and Michael John Garcia.

“The President has the authority to detain persons that the President determines planned, authorized, committed or aided the terrorist attacks that occurred on September 11, 2001, and persons who harbored those responsible for those attacks.”

The statement also notes the president has the power to detain persons who supported al Qaeda, the Taliban or associated forces engaged in hostilities with the U.S.

The report discussed the conflict about whether Obama’s detention authority statement exceeded the bounds of the AUMF and the power of the executive. For example, how would the military determine if a group or person were an associated force? In a 2009 brief, the government refused to give details about how such a decision would be made, explaining it was not possible or even advisable to speculate about such matters.

According to the government’s brief, the term “associated forces” would become better understood as it was applied to real situations and reviewed on a case-by-case basis.

Consequences of the NDAA

If U.S. citizens were detained as a result of the NDAA, Obama promised to ensure they would be granted a trial.

“I want to clarify that my Administration will not authorize the indefinite military detention without trial of American citizens,” the president wrote in the signing statement.

In order for a person in military detention to be given a trial, the president must send permission in writing to Congress to grant the detained person the ability to receive judicial process.

Andrew Rosenthal, the editorial page editor for The New York Times, described issues he sees with the NDAA. One of his major concerns is the expansion of power the law grants the president.

“I think it’s barely possible that Mr. Obama would sign a waiver of military detention when warranted,” Rosenthal wrote. “But it’s impossible to imagine a Republican successor doing that.”

Rosenthal explained Obama’s approval of the NDAA is a sign he is approaching national security issues the way George W. Bush did after the Sept. 11 attacks. While fear gripped the nation in September 2001, Republicans passed the Patriot Act and the AUMF. By allowing the counterterrorism provisions to become law, Obama is putting civil liberties and human rights at risk.

Although Obama said he would not allow U.S. citizens to be detained without a trial, he can, of course, change his mind. For example, Obama chose to add a signing statement to the NDAA. Signing statements are a way for a president to protest parts of legislation, but they have no legal power whatsoever, Stock said.

During his presidential campaign, Obama criticized Bush for repeatedly adding signing statements to bills.

The vague nature of the language in Sections 1021 and 1022, such as the mysterious meaning of “associated forces,” is common in legislation that relates to national security, Stock said.

The Congressional Research Service report also noted additional terms in the NDAA that lacked clarification. It is not made clear in the language of the law what is considered “substantially supporting” al Qaeda or the Taliban. The word “hostilities” is similarly indefinite, as no detailed description of it exists in the NDAA.

According to the report, the full meaning of the terms, “may be subject to an evolving interpretation that effectively permits a broadening of the scope of the conflict.”

Stock said the application and development of laws regarding apprehending and prosecuting terrorists and their supporters during the last ten years has been irregular.

“There hasn’t been a whole lot of consistency in any of this stuff,” she said. “It just depends on the facts of a particular situation and who’s in charge at the time.”

AUMF and war

The conflicts about the expansion of executive powers and the nebulous structure of national security protocol are not new.

“There’s an ongoing, long-standing constitutional debate about who within the federal government is allowed to use force,” Stock said.

According to the Constitution, only Congress is authorized to declare war. Many people accept this idea, but also believe it is necessary for the president to respond to a sudden attack on the U.S., Stock said. The language in the Constitution was intentionally drafted for Congress to be able to “declare war” rather than “make war,” so it was possible for the president to respond to an invasion or attack on the nation.

“The problem with that is over the centuries, presidents have taken that language that originally people thought would only apply if some army attacked the United States suddenly and they have used it to expand presidential authority,” Stock said.

Presidents, such as Lyndon B. Johnson handling the Gulf of Tonkin resolution and Ronald Reagan’s actions in the Gulf of Sidra, have rationalized military aggression toward countries that had not actually attacked the U.S., Stock said. In both cases, the presidents claimed U.S. military strikes were based on retaliation, when in fact U.S. ships were intentionally guided into enemy waters in the first place.

“Wars can get started by presidents just triggering an attack on the U.S.,” she said. “That’s caused a great deal of upset among members of Congress who think that they’re supposed to have the war power and the president’s not supposed to have it.”

The AUMF was an attempt by Congress to authorize and to support the president using force. An official declaration of war has not been made since World War II because doing so would cause tedious and unpopular consequences. For example, it is still required to set up internment camps to hold citizens in the U.S. who are from the nation(s) the U.S. is fighting, Stock said.

“[Congress authorizes] the use of force so it doesn’t trigger all these other laws applying,” she said.

Although the AUMF is more than ten years old, it still justifies the wars in Iraq and Afghanistan.

“Congress is trying to exercise its constitutional duties in a piece of legislation to show it’s supporting the president,” Stock said.

As far as the language of the law is concerned, the U.S. has engaged in hostilities in the Middle East. The controversial provisions in the NDAA seem to reiterate many of the same powers the AUMF authorized to the executive.

Under the NDAA, a person or group considered an “associated force” during “hostilities” may be held indefinitely in military detention for “substantially supporting” terrorists until the end of said “hostilities.” It is up to the judgment of President Obama, and the judgment of all future presidents, to decide what the language of NDAA really means.

Stock is concerned many U.S. citizens don’t understand the potential ramifications of the NDAA of 2012. Furthermore, she thinks most voters are unaware of the breakdown between the legislative and executive branches, which has increased the president’s power to use force.

“It’s very important for people to be careful who they elect president,” Stock said. “Because whether they end up in jail or not is going to depend on who they elect to be president.”

This article oringally appeared in the Fall 2011 edition of the Fairhaven Free Press. It explores interpretations of the term “class warfare” and focuses on the growing gap of income inequality in America.

“The eternal lie I’ve told

About the pyramids of gold

I’ve got you hooked at every turn

Your money’s left to burn.”

–“El Dorado” by Iron Maiden

 It’s no secret that economic recovery in the U.S. has been a slow process punctuated with controversy and outrage. When President Barack Obama outlined his plan to spur job creation, Republicans balked at the idea. Rep. Paul Ryan, R-Wisc., claimed the proposal would hurt corporations and wealthy Americans, which would discourage job growth.

“It looks like the president wants to move down the class warfare path,” he said on Fox News.

What is “class warfare,” and how has it been used in political rhetoric? How is it related to other issues that have contributed to the national economic crisis, including cutting taxes for the rich, stagnant social mobility, the shrinking middle class, the home mortgage debacle and the drastically increased redistribution of income from the poor to the wealthy?

The most current and greatest outcry against this economic disparity comes from the Occupy Wall Street protests. The slogan of the movement, “we are 99 percent,” is worth keeping in mind when looking at the graph. The nonpartisan Economic Policy Institute released this data at the end of October and it shows the extreme concentration of wealth into, not just the top 1 percent of the population, but also the top 0.1 percent.

Just a couple weeks after that article was published, the Pew Research Center discovered that previous Americans are 47 times richer than younger generations. This general fact has always been true, because older adults have more time to establish income and save money, but the size of the gap is significant. In 1984, the difference of the average net worth of people 65 and older and for people younger than 35 was $108,936. In 2009, the difference between the same age groups increased to $166,832.

This disparity is unprecedented and the report blames changes in the labor and housing markets. As Paul Taylor, vice president of the Pew Research Center, said of the data: “We don’t know how the story ends but we know how the story is beginning.”

Class warfare and jobs

A few days after Ryan commented that Obama was encouraging class warfare, the president fired back during a speech to promote the American Jobs Act.

“The only class warfare I’ve seen is the battle that’s been waged against the middle class in this country for a decade,” he said.

Amid the numerous discussions about America’s economic turmoil, it seems talk of class warfare keeps surfacing. CBS News reported that Mitt Romney, a Republican presidential candidate, called the Occupy Wall Street protests class warfare. The phrase has also appeared in political discourse in recent years.

The late Howard Zinn, author of “A People’s History of the United States,” gave a speech in October 2000 to support Ralph Nader for president. Zinn insisted class warfare has been present since the founding of this nation.

“[When] the wealthy White men known as our Founding Fathers fashioned a Constitution designed to prevent more rebellion, to maintain control of the country by slave owners, merchants, manufacturers and Western expansionists, that was class warfare,” he said.

After George W. Bush was declared the winner of the 2000 election, he proposed cutting taxes for the richest 1 percent of Americans, who would receive, on average, a cut of $60,000, according to an article by Patrick Martin posted on the World Socialist website in March 2001. Meanwhile, 88 percent of taxpayers would see their taxes slashed by only $1,600. As he toured the country to support the plan, Bush countered attacks on his budget proposal, claiming such denouncements were class warfare against the rich.

“Class warfare has been the policy of the American ruling elite for more than two decades, during which working class incomes have declined and the share of U.S. national wealth in the hands of the top 1 percent has doubled,” Martin wrote.

He suggested in the beginning of his article that the White House was trying to rush through the tax cut legislation, which had been set in motion less than two months after Bush took office, before most Americans understood what was going on.

Some conservative commentators even noted that talk of class warfare was distracting from the core debate about the tax cuts, which if Martin was correct, could have been part of Bush’s strategy.

“Most Americans still regard success as something to be admired—and sought after—rather than as something to be envied,” Daniel Mitchell wrote for The Heritage Foundation in March 2001. “But to allow all Americans to reach for success, we must remove the barriers to upward mobility that clutter our tax code.”

The belief held by many who supported the Bush tax cuts is that reducing taxes on the rich would encourage more Americans to push harder to get to the top. The idea is central to the infamous “trickle-down theory,” that those with greater wealth will donate their money to philanthropic purposes and share their success with others. Taxing the rich, Mitchell argued, would discourage the drive to gain more wealth and lead to economic stagnation.

“The last thing we should do is mimic Europe’s welfare states, which have been economically crippled for years by wealth-redistribution policies,” he wrote. “The United States is prosperous in large part because it avoids class warfare.”

The media watchdog organization FAIR reported that during the past decade, most major news outlets discussed class warfare by linking the term to actions of non-wealthy Americans. Radley Glasser and Steve Rendall explain the results of the FAIR study in an article on the organization’s website.

“In all outlets combined, the phrase was almost 18 times more likely to describe bottom-up action—rhetoric or policy decisions perceived as benefiting the poor or lower classes—than it was to describe top-down action (90 percent vs. 5 percent of occurrences),” they wrote.

Warren Buffet, chairman and CEO of Berkshire Hathaway, wrote a letter to Congress that was published by The New York Times demanding that taxes should be raised on wealthy Americans like himself. The letter put Buffet in the middle of the debate about job creation, with Obama even proposing the “Buffet Rule” that would make it necessary for wealthy Americans to at least be taxed the same rate as the middle class citizens, according to the president’s website. When Ryan mentions class warfare, he is talking about the bottom-up perspective, but Buffet thinks it is the other way around.

In 2003, during an interview on the ABC news show “Nightline,” the host, Ted Koppel, raised the issue of how taxing wealthy Americans could be characterized as class warfare.

“Well, I’ll tell you, if it’s class warfare, my class is winning,” Buffet said.

Neither side seems to deny that class warfare exists, but the argument is focused on identifying who the victims are. If the rich are suffering from class warfare, it hasn’t reduced their earnings

Wealthy job creators

The state of the U.S. economy has increased demand for more jobs and many Republicans have insisted that wealthy members of society can provide them. Mona Charen advocated for the idea in a column posted on the National Review website.

“I’m for the rich because they create the dynamism and energy of a growing economy,” she wrote. “The rich create businesses and hire people.”

Charen mentioned that a wealthy person hired her for her first job. In addition to the rich, she supports people who want to become rich, but acknowledged that opportunities to do so are disappearing.

Ryan also noted in a YouTube clip posted on hyscience.com the importance of lowering taxes on wealthy Americans and businesses in order to stay competitive with foreign markets. He claimed it would ease financial burdens on entrepreneurs in the U.S., maintain equal opportunity for employment and encourage upward mobility.

Hart Hodges, an economics professor at Western Washington University, noted that increasing taxes on the wealthy might not help economic recovery as much as some people think.

“The most basic thing in economics is when you lower the price of something it becomes relatively more attractive, when you raise the price of something it becomes relatively less attractive,” Hodges said.

He added that one method a person can use to avoid paying larger taxes on earned income is to find a way to earn less and live off of capital and dividends. In addition to the concern that taxing wealthy members of society would lead to economic stagnation, Hodges pointed out the consequences that might affect people in occupations that require a lot of money and education, such as doctors.

If people are discouraged from pursuing a career in the medical field because of the economic drawbacks, there may be fewer doctors who haven’t received as much training. The key is to raise taxes carefully so they don’t alienate people from filling those jobs, Hodges said.

Not everyone is convinced that the rich and corporations are creating enough jobs, if they are creating jobs at all. Offering tax credits as incentives for big businesses to hire domestically is a popular idea, one that has taken form as a bipartisan bill in the Senate, according to Andrew Zajac and Steven Sloan of Bloomberg Businessweek.

The bill, theoretically, would encourage corporations to funnel offshore profits, which total about $1.4 trillion, into the U.S. economy by giving them a tax rate of 8.75 percent. The top corporate tax is currently 35 percent.

“The rate on repatriated profits would drop to 5.25 percent if a company’s payroll expanded during 2012,” Zajac and Sloan wrote. To qualify for the lower rate, a corporation would have to increase its workforce by at least 10 percent.

Similar attempts to energize the economy in recent years have caused a lot of mistrust toward this style of job growth encouragement.

In 2004, Congress approved repatriation legislation for overseas profits from domestic corporations. An article by Floyd Norris from The New York Times explained what happened to most of the money that became available from the Homeland Investment Act. The legislation granted a one-time offer to corporations that had profits stored outside the nation: if big businesses brought those profits home to spur job growth and invested in creating infrastructure, they would pay a dramatically lower tax rate on those finances. It was a golden opportunity for corporations to give merit to Republican rhetoric that big businesses are job creators.

The Homeland Investment Act prohibited the use of the money for the purposes of raising dividends and purchasing shares, because such actions would recycle the finances into corporate control. Many corporations took advantage of the tax holiday and $299 billion poured in from overseas accounts.

“About 92 percent of it went to shareholders, mostly in the form of increased share buybacks and the rest through increased dividends,” Norris wrote.

He added that some corporations were aware of the looming tax holiday and began using foreign subsidiaries that year to exploit the repatriation.

The proposed bipartisan bill for a similar tax holiday, which is backed by groups of multinational companies such as the WIN America Coalition, faces tough scrutiny in its current form. Senate Majority Leader Harry Reid said the legislation would need to be bundled with infrastructure programs if it has any chance of passing the Senate.

On the business side of job creation, a common goal Republicans have pursued is the need to reduce regulations, which might deter companies from investing their money in the U.S., according to an article by Lawrence Mishel for the Economic Policy Institute. Sen. Susan Collins, R-Maine, introduced a bill to place a moratorium on all new job regulation.

“Businesses, our nation’s job creators and the engine of any lasting economic growth, have been saying for some time that the lack of jobs is largely due to a climate of uncertainty, most notably the uncertainty and cost created by new federal regulations,” Collins said.

Mishel blasted the so-called “uncertainty” argument, because the approach affects job creation whether it is from a wealthy source or otherwise. By delaying regulation standards, Collins and other Republicans are actually causing economic uncertainty, because businesses don’t know what regulations will require when they are imposed, Mishel wrote.

Mobility in America

Both Mitchell and Ryan point out the need to preserve upward mobility in order to strengthen the nation’s economy. A 2005 article in The Economist took issue with the whole ideal of social mobility and how it has become less likely that a poor person can make their way up the ladder and become rich.

Roughly 35 years ago, the average annual salary of the top 100 CEOs in America was $1.3 million, which was 39 times that of the average worker, The Economist reported. Now, the disparity has widened to a ratio of 1,000-to-1. Mitchell claimed that lower tax rates do benefit the rich to some extent, but the poor and the middle class are the ones who can take advantage of the breaks and seek more opportunities for themselves and their families. Some see the disparity as an opportunity and if they cross it, they will attain financial security.

Hodges said he doesn’t know how to justify the large salaries and bonuses CEOs receive, because it simply doesn’t make sense for them to earn that much money. Niall O’Murchu, a professor and coordinator for the Law, Diversity and Justice program at Fairhaven College, discussed the relationship between wages and skills of corporate CEOs.

“Some economists believe that the chief executives are making brilliant decisions to make lots of money and they’ve got such rare talents that they’re worth that money to the companies,” O’Murchu said. “Some political economists believe that these chief executives are bilking the shareholders, because they’re in a position of power.”

He added that the increasing concentration of wealth in the top 0.1 percent of the population should cause CEO’s pay rates to be reexamined and compared to the skills they bring to their businesses.

“There are a lot more highly-educated people with new, useful skills who have not seen anything like the stratospheric growth in their compensation,” O’Murchu said.

The Economist found most economists agree that recent decades have seen stagnation for social mobility while income inequality has continued to increase. Gary Solon, an economics professor at the University of Michigan, found that social mobility might be better in other countries. It is hard to accurately measure, but evidence suggests Germany, Sweden, Finland and Canada are all competitive when it comes to social mobility success rates.

Competition could also be part of the reason for growing social stratification. Upward mobility has worked for elite Americans who learn about the importance of getting into the best schools from a young age, according to The Economist. A decade may go by before they are required to prepare for gaining access to the top universities in the country. By the time they enter higher education, they likely have their career figured out (if it wasn’t already when they first entered school) and the competition continues.

Education is a perfect model to assess social stratification. Poorer members of society have no choice but to send their children to schools that are rated and run by superficial data. Linking teacher salaries to student performance is an example of data that harms everyone involved. Students who have trouble with schoolwork and need extra help do not receive it because teachers are forced to make sure students who are learning continue to succeed if the teachers want to keep their jobs.

The outlook for low-income students to succeed in higher education is bleak, too. The Economist explained that Pell grants are the main source of funding for poorer students, but money for the grants is being shuffled to other financial aid programs. Though the article is from 2005, this October a student at a town hall meeting in Wisconsin asked Ryan why he proposed cutting 15 percent of the total Pell grant award. Ryan responded by explaining that the Pell grant program is not sustainable, it encourages universities to raise tuition and it can’t be paid for.

“Ryan justified the GOP’s desire to cut the highly-necessary Pell grant program by claiming that it costs too much; but the GOP’s budget provides huge tax breaks for the wealthy and corporations which dwarf the cost of preserving the grants,” Travis Waldron and Pat Garofalo wrote in an article for the ThinkProgress website.

Middle class woes

The problems facing the U.S. economy are so extreme, some think it would be best to adopt multiple approaches to addressing the crises. In an article for The Atlantic, Don Peck explained how different tactics can be used to make sure the economy is growing and that more people can share the success of such growth. Changing the perspective on the U.S. economy is key to protecting the middle class, which has been made vulnerable by a number of economic and social factors.

Peck began his article by discussing a 2005 report from three Citigroup analysts who examined the growth of the nation’s economy. At the time, the analysts found that members of the richest 1 percent the U.S. population were responsible for all the significant financial activity in the country. This concentrated wealth gave those who possessed it greater influence in the nation and that wealth increased annually, according to the report. The analysts divided the U.S. population into “the rich and the rest,” even though they knew it was a generalization.

The division has some merit, Peck argued, citing a Gallup poll that indicates recovery from the recent recessions has been fueled by those with more wealth.

“[From] May 2009 to May 2011, daily consumer spending rose by 16 percent among Americans earning more than $90,000 a year; among all other Americans, spending was completely flat,” he wrote.

Another issue that has hit middle-class families particularly hard was the collapse of the housing market, which will be discussed in greater detail shortly. In that crisis, the stock market rebounded and eased economic burdens on wealthy investors. Middle-class families who rely on the investment value of their homes have been adversely affected by the recession, Peck wrote. A Pew Research poll from 2010 showed that, since the recession began, the wealth of the middle class had decreased by 23 percent compared to 12 percent for wealthier classes.

Peck also mentioned how the corporations have bounced back quickly and continue to benefit from the recession by setting up accounts offshore and keeping wages and expenses low to ensure higher returns. Wealthy members of society are able to weather the storm of economic turmoil, according to Anthony Atkinson, an economist from Oxford University. He studied recessions in other countries and found that the consequences differed significantly between the middle and upper classes.

“[The] middle class suffered depressed income for a long time after the crisis, while the top 1 percent were able to protect themselves—using their cash reserves to buy up assets very cheaply once the market crashed and emerging from crisis with a significantly higher share of assets and income than they’d had before,” Peck wrote.

He also noted that the nonprofessional middle class has suffered because of the economic plight of men who work blue-collar jobs. Michael Greenstone, an MIT economist, reported that the median income those men earned has declined since 1973 by 32 percent. Lawrence Katz, a Harvard economist, discussed significant changes in the labor market that have occurred in the past three decades. Employer interest has increased for creative, analytical and interpersonal skills and men without college degrees continue to have a hard time learning these talents.

Katz explained men from previous generations could find work in manufacturing and construction, but that isn’t a likely option for young men today. Peck reported that, in 2009, men concentrated in a few major job categories.

“They did, however, consolidate their hold on manufacturing—those dwindling jobs, along with jobs in construction, transportation and utilities, were more heavily dominated by men in 2009 than they’d been nine years earlier,” he wrote.

Men hold only one in four jobs in the health and education sectors. Those sectors added roughly 4 million jobs during the previous decade, while many male-dominated markets reported losses. The problem goes beyond the U.S. As other wealthy nations have moved away from industrial-age manufacturing and have invested more in innovation, men are having more trouble finding work. As a greater number of employers place an emphasis on “people skills,” more women are filling those vacancies, according to Bruce Weinberg, an Ohio State University economist.

O’Murchu suggested the shift is not as simple as innovative jobs overshadowing manufacturing.

“It doesn’t explain how much more inequality has risen in the United States,” O’Murchu said.

American politics have affected the nation’s economy much more than the skills-based technological change. The severity of the wealth disparity, the structure of the tax code and the declining power of labor unions are all connected to legislative activity of the past 30 years, O’Murchu said.

He added that the political system in this nation has been slow to respond to the innovation boom and the predominant reaction has been to facilitate the success of innovative business with deregulation. This has contributed to income inequality, because the concentration of wealth cannot be spread across the economy if corporations aren’t mandated to do so.

One of Peck’s conclusions is a greater number of Americans will have to accept jobs that require fewer skills and pay lower wages. It is exactly what many people seem to be doing. According to the National Employment Law Project, 75 percent of the job growth in 2010 came from industries and sectors that paid less that $15 an hour. The trick, Peck wrote, will be to try to add benefits and securities that will make these traditionally low-end jobs more like middle-class occupations.

Bailouts: banks and the housing market

In 2008, President George W. Bush signed the Troubled Asset Relief Program (TARP) into law. It was designed to shield major banks and businesses from bankruptcy and it required $700 billion from the government. It gave rise to two pejorative terms: “bailout” and “too big to fail.” One of the goals of TARP was to encourage banks to lend so citizens could have the means to make large purchases, such as new homes.

The expected increase of lending never happened, which has become a significant roadblock to economic recovery. In September, the Federal Reserve tried to encourage people to borrow money by announcing Operation Twist, according to an article by Annalyn Censky on CNN’s website. The goal of the proposal was to lower interest rates and make the process of lending more affordable.

Operation Twist faced skeptics in the mortgage industry who said interest rates have been slashed repeatedly but it hasn’t spurred growth. Greg McBride, a senior financial analyst for Bankrate.com, reported his opposition to the Federal Reserve’s plan in Censky’s article.

“Low rates can only do so much,” he said. “Operation Twist will not prompt banks to make loans they’re not comfortable making. It won’t prompt people to buy houses if they’re worried about a job loss, and it won’t help homeowners refinance mortgages if they’re already unable to qualify.”

Censky added that people would have to prove their credibility to take advantage of Operation Twist.

The housing crisis began in 2003 when fixed-rate mortgages fell to the lowest they had ever been. According to an article by Jeff Faux for the Economic Policy Institute, realtors and bankers discovered how they could take advantage of this by targeting members of the middle class and the working poor.

Deregulation reduced the qualifications necessary to buy a house, according to an article on stockmarketinvestors.com. New loans were introduced that allowed people to sign up for mortgages without needing to provide proof of income. Home loan standards shrank until all a subprime borrower needed was a decent credit score to move into their own home.

Supporters of the rampant lending spree, which became known as “the housing bubble,” thought that the falling home prices would continue to descend and even if mortgage holders couldn’t afford to pay, they could refinance their home to cover the cost. Faux wrote that as the demand for housing continued, the plunging costs for houses reversed and people began defaulting on their mortgages faster than they had signed up for them.

“[It] is not the squeeze on homeowners that is giving our central bankers nightmares,” Faux wrote. “It is the blowback of housing deflation on the country’s massively overleveraged financial markets, which has seriously constricted the flow of credit—the lifeblood of the world’s largest debtor economy.”

About 22 percent of homeowners who are already struggling with their mortgages would not qualify for the benefits and that doesn’t include the number of jobless people, who would also be denied lower interest rates.

Businesses are also withholding from investing because of the economic climate. Mike Schenk, vice president of economics for the Credit Union National Association, noted that even though some businesses have money, it is hard to convince them to invest, because they don’t want to lose the finances they have.

“Most corporations are already sitting on piles of cash,” Schenk said. “And those that aren’t will find it difficult to sell internally the idea of investing more in an environment where demand just isn’t there.”

At the same time the Federal Reserve introduced Operation Twist, Jacob Goldstein of NPR reported that U.S. corporations are holding more than $2 trillion. The major reason for this is the doubt associated with the recession, but Goldstein also pointed out the shrinking role of manufacturing is a change some businesses are still adjusting to.

“[The] U.S. economy has shifted away from heavy industry and toward companies that rely more heavily on R&D and intellectual property,” he wrote.

He added that large factories could be used for investment purposes to help companies expand. When those factories are abandoned, the collateral value is lost. Businesses have also reduced inventory and money shows up as cash rather than as goods.

Plenty of banks and businesses took advantage of TARP, but the money has not been repaid, essentially because of the risks associated with moving the money into the economy. Banks don’t want to lend to the unemployed or people with poor credit and people don’t want to take out loans and deal with volatile interest rates that might make the loans impossible to pay off. Contrary to Charen’s vision, as long as wealthy Americans and businesses continue to hold their money, they will not help the economy grow.

In their book, “Winner-Take-All Politics,” Jacob Hacker and Paul Pierson discuss something called, “the big zero.” They predict it will be the name history gives to the first decade of the new millennium. From an economic perspective the first 10 years of it were wasted.

“Even the most optimistic estimates suggested it would take years to recover from the hemorrhaging of jobs and incomes triggered by the collapse,” they wrote.

Some of the economic recovery is already evident. Recent data show the number of Americans filing for unemployment fell for the first time in seven months, according to an article in The Washington Post from Nov. 17. In the middle of October, PBS reported that home building increased during the month of September by the largest margin in the past 17 months.

While this is good news, little progress has been made that directly challenges existing systems that support income inequality. Will efforts to reform the tax code and redistribute the wealth always be mired by discussions of class warfare? Where does that leave our most vulnerable citizens, such as the elderly, people who can’t work or children? What will happen to the 99 percent of Americans if greater percentages of wealth are perpetually flowing to the richest members of our society?

This article originally appeared in the Winter 2011 edition of the Fairhaven Free Press. It examines Citizens United Supreme Court case and the origin of the idea of corporate personhood.

In January of 2010, the Supreme Court issued a controversial ruling that granted new rights to a certain kind of person. Some of these persons are immortal. Some are multinational. Many of them are wealthy. Some of them sell fast food, produce insecticides and, because of the decision in Citizens United v. Federal Election Commission, can legally provide unlimited funding to political campaigns.

These persons are known as corporations. The conflict that led to Citizens United began as an argument about whether trailers for a documentary could be broadcast a few weeks prior to the presidential primary elections in 2008. The 5-4 decision passed by the court not only allowed the trailers and documentary to air, but also declared corporations have a right to free speech under the First Amendment. Additionally, the ruling relaxed regulations on corporate funding of elections.

A report from the Public Citizen Foundation, which showed that funding from big businesses for the 2010 mid-term election campaigns was $294.2 million, a dramatic increase from $68.9 million from the 2006 midterm election.

“The 2010 figures nearly matched the $301.7 million spent by outside groups in the 2008 presidential cycle. Because spending in presidential cycles normally dwarfs spending in midterm elections, the uncharacteristically high spending in 2010 presages blockbuster spending in the upcoming 2012 elections,” according to the Public Citizen report.

The report also mentions that nearly 50 percent of the total $294.2 million came from only 10 groups. In the wake of the Citizens United decision, fewer donors to campaigns disclosed their funding sources before the election. The report ignored party committees in its tally of 308 organizations and corporations that financially influenced the 2010 election. Only 166 of these donors revealed the sources of their money.

“Among the top 10 groups, which accounted for nearly half of all spending, seven disclosed nothing about their donors. These seven groups accounted for 73.6 percent of the total amount spent by the top 10 groups,” according to the Public Citizen report.

Chris Kromm, executive director of the Institute for Southern Studies, explored how unlimited money from big businesses has changed the political process in this country in an article posted on alternet.org.

“[The Citizens United ruling] opened a massive loophole in our country’s already porous campaign finance system, giving corporations the green light to inject unlimited sums of cash into independent groups—527s and 501c4s, references to their IRS tax status—that can intervene in elections,” he wrote.

Before the Citizens United case, corporations funneled money into political action committees (private groups that organize to elect specific candidates or further particular legislation) and used other methods to offer financial support to campaigns and candidates, Kromm wrote.

He also notes data from the report showing that out of 75 congressional races, 60 of the candidates who relied on outside funding emerged victorious. In other words, 80 percent of these candidates had successful campaigns sponsored by external (and often undisclosed) sources.

Todd Donovan, a political science professor at Western Washington University, noted that the Citizens United ruling makes it easier for corporations to contribute large sums of unregulated money to campaigns. After Citizens United, campaign contributions have changed, but elections are still inundated with money.

While the amount of money for the midterm elections increased, Citizens United may not be completely responsible for the greater amount of donations. A substantial conservative interest in the outcome of 2010 midterm election may have also caused the leap in spending, Donovan said. Most of the top 10 groups cited in the Public Citizen report support right-wing interests.

“There’s more at stake as government starts regulating more and doing more and groups are going to start throwing more money [at elections],” Donovan said.

He added that a drawback to the ruling is previous regulations on advertisements during elections have been removed. Many special interest groups run attack ads that crowd out messages from candidates and surround elections with negativity. Donovan mentioned he is also concerned about the arbitrary disclosure process for donors to political campaigns.

Although Justice Anthony Kennedy assumed that further disclosure of donors in elections would result from the Citizens United ruling, the evidence from the 2010 midterm election indicates that many financial sources were not publicized. One method corporations use to circumvent disclosure laws is to claim protection under the First Amendment. They also claim their business could be undermined if they disclosed the sources of money they donated to elections.

While the Supreme Court upheld disclosure laws in Citizens United, congressional democrats knew the laws were going to be adversely impacted by the decision, according to Donovan. Some members of Congress were already drafting legislation that would compel political advertisements to show, for example, the name of the CEO of the company that sponsored the ad. The ruling was an opportunity for Congress to force more disclosure legislation and limit the influence of foreign-based corporations on U.S. elections, but it did not happen, Donovan said.

Citizens United overview

The origins of this case began when the activist organization Citizens United produced a film titled “Hillary: The Movie.” The website for the documentary declares, “If you want to hear about the Clinton scandals of the past and present, you have it here!” The description notes that “Hillary: The Movie” includes nearly 40 interviews “with experts, opinion makers, and many of the people who personally locked horns with the Clintons” such as Newt Gingrich and Ann Coulter. Every complete sentence in the description concludes with an exclamation point.

The issue Citizens United faced by airing trailers for “Hillary: The Movie” concerned restrictions on “electioneering communication,” which is a term for “any broadcast, cable, or satellite communication [that] refers to a clearly identified candidate for federal office,” according to the Supreme Court decision. The Bipartisan Campaign Reform Act of 2002 explicitly states that corporations and unions cannot use finances from their treasuries to produce electioneering communication.

A turning point in the case arose when Citizens United claimed that as a corporation, they were entitled to protection by the First Amendment. They argued that their right to free speech was being threatened by the FEC. Citizens United wanted to advertise and show their documentary regardless of when the election was (There was a specific ban on airing electioneering communication within 30 days of when an election occurs.). The majority of the justices agreed that censoring “Hillary: The Movie” breached the First Amendment and, as documented in the case proceedings, previous Supreme Court rulings about regulating corporate funding of political campaigns were reinterpreted to support the outcome of Citizens United.

The Washington Post reported reactions from various politicians the day the Citizens United ruling was announced. President Obama expressed that he would work with Congress to immediately initiate “a forceful response” to the decision.

“[Citizens United] is 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,” he said.

Former Republican presidential candidate and one of the sponsors of the BCRA, John McCain, declared his opposition to the ruling.

“I am disappointed by the decision of the Supreme Court and the lifting of the limits on corporate and union contributions,” he said.

Not all of the reactions to the Citizens United ruling were negative. Senate Minority Leader Mitch McConnell, for example, praised the decision.

“For too long, some in this country have been deprived of full participation in the political process,” he said. “With today’s monumental decision, the Supreme Court took an important step in the direction of restoring the First Amendment rights of these groups by ruling that the Constitution protects their right to express themselves about political candidates and issues up until Election Day.”

The chair of the National Republican Senatorial Committee John Cornyn was also in favor of the court’s decision.

“I am pleased that the Supreme Court has acted to protect the Constitution’s First Amendment rights of free speech and association,” he said. “These are the bedrock principles that underpin our system of governance and strengthen our democracy.”

Anthony Dick, author for the National Review Online, wrote an article supporting the ruling of Citizens United. He agreed with claims that political funding should be considered speech and therefore protected under the First Amendment.

“[S]pending money is an indispensable component of effective political speech, especially when it involves any audience above a trivial size,” he wrote.

Dick also disregarded the notion that corporations should be denied similar rights as people.

“[T]he First Amendment has long been extended beyond isolated individuals to groups and associations whose members gather for a wide variety of purposes ranging from political to commercial,” he wrote. He added the issue of granting corporations such rights was really a question of how freedom of expression should be interpreted in the U.S.

According to Dick many negative responses to the decision claimed it was an example of judicial activism. He rebutted such protests by asserting that the Supreme Court was faithfully preserving the rights of the First Amendment and there was no activism performed by the justices at all.

“The government argued in Citizens United that it had the power to outlaw books and movies produced by unions and corporations, both non-profit and for-profit, if they included even a single line addressing an election or a political issue,” he wrote.

Dissent

Former Justice John Paul Stevens composed the 90-page dissent for the Supreme Court decision, which he begins by noting that Citizens United is a wealthy nonprofit and its political action committee has millions of dollars that could have aired “Hillary: The Movie” at any time.

Stevens asserted that the basic dispute in the case is whether Citizens United used money from its own treasury to fund the documentary.

“The notion that the First Amendment dictates an affirmative answer [to the case] is, in my judgment, profoundly misguided. Even more misguided is the notion that the court must rewrite the law relating to campaign expenditures by for-profit corporations and unions to decide this case,” he wrote.

The interpretation of the First Amendment became a central and contentious issue in the case. Stevens disagrees with the view put forth by Dick that there is long history of free speech rights extending beyond individual people. He expresses that when the First Amendment was conceived, there was “not a scintilla of evidence” that predicted the legislation would later be used by corporations to deregulate campaign spending.

Besides, corporations of today are created and managed very differently than those of the 1700s. Stevens targeted Justice Antonin Scalia’s reasoning of the nebulous nature of the First Amendment in terms of exactly who or what it protects.

“Nothing in [Scalia’s] account dislodges my basic point that members of the founding generation held a cautious view of corporate power and a narrow view of corporate rights,” Stevens wrote.

Dick wrote that money has an important place in politics and has so much influence that it should be considered speech and protected by the First Amendment. Johann Neem, a history professor at Western, is critical of the Citizens United decision because it threatens the marketplace of ideas. He agrees with Dick that finances play an essential role in politics. Unlike Dick, Neem sees this as a vast inequity and detrimental to the democratic process.

“Money is a form of speech,” Neem said in an interview. “Any interest that has an issue at stake ought to be allowed to come to the table and enter the marketplace of ideas. The First Amendment protects the competition of interests.”

Neem continues noting that optimal organization is advantageous for participating in interest group politics. For this reason, it is harder for the public at large to organize and unite behind common causes. Organized interests are focused precisely on causes that further their agendas, Neem said.

Stevens continued his dissent mentioning the case failed to resolve what Citizens United and its political action committee are permitted to finance. Instead, the decision opened the door to greater corporate influence in elections.

“The court operates with a sledgehammer rather than a scalpel when it strikes down one of Congress’ most significant efforts to regulate the role that corporations and unions play in electoral politics. It compounds the offense by implicitly striking down a great many state laws as well,” he wrote.

The idea that the court revisited and manipulated other cases to come to a ruling on Citizens United is the basis for the argument that the decision was reached through excessive utilization of judicial activism, a topic which Dick addressed but claimed had no role in the final verdict.

The term judicial activism means that “Supreme Court justices (and even other lower-ranking judges as well) can and should creatively (re)interpret the texts of the Constitution and the laws in order to serve the judges’ own considered estimates of the vital needs of contemporary society,” according the definition on the website for Auburn University.

“Surely, the argument runs, [the Citizens United ruling] is judicial activism, and surely it reveals the critique of judicial activism as just a convenient tool by which conservatives decry decisions to which they object for political reasons, cloaking their real concerns in feigned constitutional principles,” wroteCarson Holloway, a political science professor at the University of Nebraska. His article appeared on The Witherspoon Institute’s website and discussed the inherent complications of judicial activism.

A key issue Holloway proposed is most justices, regardless of their political affiliation, developed an intellectual framework that causes them to value their own interests and beliefs more than the rights laid before the Constitution.

Further, Holloway suggests that judicial activism was present in Citizens United because the Supreme Court was deliberating with not only the meaning of the Constitution, but also with a judicial record, a history that has been built through previous cases. The court chose to reverse, in Holloway’s words, “the usual presumption of constitutionality.” In this case, rather than compelling Citizens United to explain why censoring their documentary was unconstitutional, the FEC was challenged to prove how censoring the documentary was constitutional.

Neem suggested that Citizens United might further corruption of the political process in the U.S. He explained that the court ruled that corruption can include the appearance of corruption and both of these concepts erode the public’s trust.

“Corruption doesn’t necessarily mean I pay you and you vote what I want. Corruption also means that if it appears that my paying you will affect your vote and your ability to be an objective legislator or judge, that appearance of corruption is problematic to the system,” he said.

The more cynical the public becomes about political engagement, the easier it will be for corporations to control the legislative agenda. Neem said that greater corporate influence in political elections is troubling because most voters get their information from television and Internet film clips. It costs a lot of money to broadcast and promote such information, but corporations can afford it and so they help shape the opinions of voters. The crux of this reality is corporations that fund such campaigns do not invite people to formulate and express their own opinions.

“[Corporations] are not going to encourage people to deliberate,” Neem said. “They are not going to encourage people to think.”

The consequence of this, Neem added, is that people’s opinions will be reinforced and it will become harder for them to accept alternative views. It keeps people from engaging in deliberation and corporations, in this way, shape the outcome of elections. The complexity of differences between people is one of the reasons democracy works, Neem explained. Actually having a conversation with someone who may have contrasting beliefs from your own usually yields an understanding of that individual beyond general stereotypes and dichotomous opinions.

“And, of course, corporations are not those kind of complex beings,” Neem said. “They are seeking to pursue their interests, which is why the extension of First Amendment political speech protections to corporations is really problematic.”

Neem agrees with Stevens and Holloway that the Supreme Court could have made a much narrower ruling that simply would have allowed Citizens United to show “Hillary: The Movie.” Instead, issues of corporate personhood and challenges to campaign finance reform were raised as Citizens United progressed. Historically, the Supreme Court deliberately executed conservative rulings in cases that dealt with corporate rights. The balance between granting freedoms to corporations to engage in commerce and other services while deciding the extent of corporate powers in the U.S. has been an issue the court has taken very seriously. With the broad ruling of Citizens United, corporations have gained more of the same rights naturalized citizens enjoy.

Justice Stevens objected to the Supreme Court upholding the idea that corporations should have such rights, especially since much of the Citizens United ruling was based on this interpretation.

“The conceit that corporations must be treated identically to natural persons in the political sphere is not only inaccurate but also inadequate to justify the court’s disposition of this case,” Stevens wrote.

Corporate personhood and Citizens United

Opposition has risen against the Citizens United ruling and the ideas of corporate personhood. Kromm reported that Maryland Rep. Donna Edwards proposed a constitutional amendment that would eliminate any corporation’s access to the same rights as people.

“The Supreme Court really has left us with no choice but to change the Constitution and make sure that people own our government and our elections,” Edwards said in a YouTube clip posted on freespeechforpeople.org. The bill was introduced on Feb. 2, within two weeks of the Citizens United ruling. The bill passed to the House Committee of the Judiciary on June 15 and made no further progress.

The 2003 documentary called “The Corporation,” directed by Mark Achbar and Jennifer Abbott, critically examined the influences of big businesses on the world and discussed some of the consequences of such influences. One of the first questions posed by the film is if a corporation is legally considered a person, what kind of person it? Noam Chomsky, a political activist and professor of linguistics at MIT, offered an answer in the documentary.

“Corporations were given the rights of immortal persons,” he said. “These are special kinds of persons which are designed by law to be concerned only for their stockholders.”

He added that this concern does not extend to the communities in which businesses are based, nor to the employees who work for the corporations. The emphasis on satisfying stockholders has been built up over time through judicial decisions and marketing practices that are designed to direct corporate interests to short-term financial gains.

This necessity to accumulate wealth quickly puts a lot of pressure on corporations to deliver results faster, Chair and Founder of Interface, Inc. Ray Anderson said in “The Corporation.” The pressure often leads big businesses to externalize, which is an economics term Anderson described as, “Let someone else do it.” An example of externalizing is easily applied to automobile companies. They design and assemble cars, but let other entities make and maintain the roads used by millions of vehicles every day. Corporations utilize externalities to cut costs and are not responsible for the actions of outside entities.

Film director and author Michael Moore admitted in “The Corporation” that there are many corporations that certainly benefit communities and society. They make useful products or provide services that make our lives easier. Problems arise and corporations can be harmful when the motivation for increasing profits becomes the ultimate goal and attention for communities and the environment is neglected. Once a business’ primary goal is only to make money, it is a trap because no matter how much that company gains financially, it is never enough, Moore said.

In many instances, the sole focus of profit resulted in companies severely damaging the environment in ways individual persons could not. Former professorof environmental medicine at the University of Illinois Samuel Epstein noted in “The Corporation” that 1940 marked the beginning of synthetic chemical production. Oil companies sponsored laboratory projects that rearranged molecules that offered an unlimited supply of new chemicals the world had never seen. This led to development of the insecticide DDT. At the time, it was considered a solution to combat disease. As more synthetic compounds were invented and introduced, some data indicated potential health and environmental problems were increasing with the production of petrochemicals.

“Warning signs emerged that some of these chemicals could pose hazards,” Epstein said. As time went on, data began revealing that some of the synthesized products that were widely used in society were blamed for causing cancer and birth defects.

As studies continued to report the disturbing effects of DDT and other harmful chemicals, the industries that produced them attempted to trivialize the risks, according to Epstein. This returns to the ideas of what kind of person a corporation is and the difference between the levels of harm a person can cause as opposed to a large company.

“If I take a gun and shoot you, that’s criminal,” Epstein said. “If I expose you to some chemicals which knowingly are going to kill you, what difference is there? The difference is it takes longer to kill you.”

He further asserted that industry is largely to blame for the epidemic of cancer in this country. Through corporate sponsorship and distribution, some of the petrochemicals have undermined the environment and public health on a national, sometimes global, scale. The destruction is beyond what any individual could accomplish.

Dr. Robert Hare is a consultant to the FBI on psychopaths and concludes in “The Corporation” that is not difficult to draw a parallel between psychotic individuals and psychotic corporations. Assuming corporations are considered legal persons, most corporations meet all the characteristics of prototypical psychopaths.

“The Corporation” uses case studies to show how some specific companies meet the criteria for psychopathic behavior with the Personality Diagnostic Checklist from the World Health Organization. The list includes: callous unconcern for the feelings of others; incapacity to maintain enduring relationships; reckless disregard for the safety of others (use of DDT); deceitfulness, including repeated lying and conning others for profit; incapacity to experience guilt and failure to conform to social norms with respect to lawful behaviors. The documentary asks if the dominant institutions are psychopathic, who bears the moral responsibility for the actions of those institutions? How did corporations become so prevalent in the U.S. and where did the idea of corporate personhood come from?

Early attitudes toward corporations

Corporate personhood, as defined by Thom Hartmann in his book “Unequal Protection” is “the story that a group of people can get together and form a legal fiction…called a corporation—and that legal agreement could then have the rights and powers given to living, breathing humans by modern democratic governments.”

Agreeing with Chomsky and Moore about corporations being designed to satisfy their stockholders and increasing profits, Hartmann points to a dangerous imbalance that occurs when the same rights of common individuals are granted to big businesses. With such rights, large quantities of money and great size, a corporation can easily pursue its own interests. This form of corporate power can also be used to interfere with the national interests and influence legislation.

“[T]he corporation [is placed] in a position of unbalanced power over human citizens and [is allowed] to manipulate governments, which then lose their connections to their own citizens and instead become instruments to further the corporate agenda of accumulating wealth,” Hartmann wrote. This idea also returns to Epstein’s claim that a corporation can cause greater destruction than an individual because of this imbalance.

Many early leaders of the U.S. recognized the importance of limiting corporate power. Thomas Jefferson believed freedom from monopolies should be a fundamental human right, according to Hartmann.

Jane Anne Morris studies corporate anthropology and writes for Democracy Unlimited of Wisconsin Cooperative. She found remarks from Edward G. Ryan, Chief Justice of Wisconsin’s Supreme Court, that were delivered the night before he was sworn in as Chief Justice in 1873: “[There] is looming up a new and dark power… the enterprises of the country are aggregating vast corporate combinations of unexampled capital, boldly marching, not for economical conquests only, but for political power.”

Morris continues in the same article posted on the website thirdworldtraveler.com with a quote from former President Grover Cleveland. In 1888, he said, “Corporations, which should be the carefully restrained creatures of the law and the servants of the people, are fast becoming the people’s masters.” Two years before he made this statement, corporations had already been granted many of same the rights as individual persons.

Railroad rights

By the time the Civil War began, Hartmann noted, the railroads were taking full advantage of their monopoly statuses. With the absence of competition, they could charge whatever they pleased. The railroads were soon using their accumulated wealth in courtrooms to win tax exemption in states and counties where tracks were laid.

The part of the 14th Amendment of the U.S. Constitution that relates to the greatest judicial and corporate success of the railroads is, “[N]o state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”

This amendment to the U.S. Constitution was made after slavery was outlawed and designed to protect the newly freed slaves. Hartmann wrote that the lawyers for the railroads immediately jumped on the rights guaranteed by the 14th Amendment and argued that the legislation should protect the railroads, too. From a legal perspective, corporations were not referred to as people, but rather as artificial persons. The lawsuits railroads initiated over taxes were made based on claims of discrimination since the railroads were taxed differently depending on local tax codes.

For almost 20 years, the railroads continued to sue, claiming they were denied their rights as naturalized persons. In 1877, four separate cases from railroads made it to the Supreme Court. Five years after the 14th Amendment was ratified and the lawsuits had begun, Justice Samuel Miller reaffirmed that the “one pervading purpose” of the amendment was to establish and uphold the freedom of former slaves.

According to Hartmann, this opinion held throughout the Supreme Court for years while the railroads continued financing lawyers who would put their business beyond the reach of local laws and regulations. One of the problems Hartmann cited with corporations is their immortality. Jefferson worried about corporate wealth, because it made it possible for corporations to perpetually to bring cases before the court, regardless of cost or time, until they got what they wanted. In 1886, the railroads achieved their judicial objective.

More than a decade earlier, Chief Justice Morris Waite, a former attorney for the railroads, had been sworn in. He had no prior experience as a judge, but Waite was committed to the position, even turning down a run for president to remain with the Supreme Court. The 1886 case was Santa Clara County v. Southern Pacific Railroad and the conflict concerned taxation. Santa Clara County taxed the railroad right-of-way in accordance with local tax laws. Southern Pacific argued that taxes were unfair and had refused to pay them for the past six years.

Just as Santa Clara County was only about a tax dispute, Citizens United was originally only concerned with a broadcast and election dispute, but the rulings of both cases commented on much more than the original conflicts. Southern Pacific complained about the issue of taxes, but spent most of the case declaring they should have access to the rights of persons under the 14th Amendment.

Hartmann includes the explanation from S.W. Sanderson, the attorney for the railroad, for why Southern Pacific should have the rights of individuals.

“I believe that the clause [of the Fourteenth Amendment] in relation to equal protection means the same thing as the plain and simple yet sublime words found in our Declaration of Independence, ‘all men are created equal.’ Not equal in physical or mental power, not equal in fortune or social position, but equal before the law.”

Southern Pacific did not dispute they owed taxes, but claimed their property was incorrectly assessed by Santa Clara County. This defense was one of six the railroad used to win the case, but the defense involving the 14th Amendment was not ruled on. After the court sided with the railroad, it also rejected an appeal by Santa Clara County.

Even though the justices explicitly declared they would not make a decision regarding the 14th Amendment protecting corporations, the court recorder made a note about this declaration. Part of the written record of the case reads, “The defendant corporations are persons within the intent of the clause in section one of the Fourteenth Amendment to the Constitution of the United States, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws.” In this passage, the court recorder essentially claims that Southern Pacific Railroad is a person under the 14th Amendment, but this was not the opinion of any of the justices.

While researching his book, Hartmann found the original court record from Santa Clara County and asked an attorney about the significance of the above statement. The attorney identified the statement as part of the headnotes of the case. Headnotes are not part of the formal decision by the Court and have no legal authority whatsoever. When Hartmann pointed out that the headnotes had no legal standing, the attorney said, “a mistake compounding on a mistake.”

In cases that followed, corporations cited the headnotes from the Santa Clara County decision to be legally recognized as persons. Between the 1886 ruling and 1910, 307 14th Amendment cases were brought to the Supreme Court. Nineteen cases were from individual African Americans; 288 were from corporations, according to Hartmann.

Citizens United is the most recent example of the Supreme Court furthering the rights of corporations, especially in the realm of political funding. Aside from possibly limiting deliberation in politics, Neem mentioned another potential consequence of the ruling.

“Voters have the sense that the people who are making the decisions are not them and then what is the point of voting?” Neem said. Whether that scenario actually occurs returns to the idea of corruption or the appearance of corruption. As long as voters feel marginalized by corporate influence that is a threat to the political process.

Corporations also do not encourage people to collaborate or reach across the aisle.

“Your neighbor is conservative and you’re liberal and you realize that ‘We’ve got to make this work together,’” Neem said. “Corporations don’t have that problem. They are not seeking to make it work together.”

This inability to relate and reach a consensus raises the question of what the political landscape might look like when dominated by corporate influence. The Citizens United ruling already resulted in a significant increase in campaign spending during the 2010 midterm election. Citizens United extends corporate rights in the U.S. and, more specifically, allows them to provide unlimited funds to elections. How the decision will affect the nation and its political process in the long run remains to be seen.