The Economic crisis of 2008-2009 is summarized in the PBS program, Frontline's February 17, 2009 "Inside the Meltdown". This crisis threatened to bring down the American and global economy and lead to the popularization of the phrase "Too big to fail."
"Too big to fail" means that a superorganic entity, "Corporation," is so complex and so intertwined with the other elements that make up the many levels of the superorganic entity known as the "Nation", that the failure of the former could result in the fatal failure or death of the latter.
As the Frontline report makes clear -- when it comes to the superorganic, human moral principles come up against the question of systematic pragmatism. When the survival of the whole depends upon the survival of the one critical part that is TOO BIG TO FAIL, then how do we, as individuals, justify and come to an accommodation with the paradox of personal responsibility vs the greater good?
The questions it raises for us are two-fold:
Should the greed and selfishness which fostered the systematic breakdown of Wall Street's investment banks be punished by letting the individual and institutional immorality be punished by letting them fail regardless of the collateral damage to the nation's financial system? (Moral Hazard)
Or, Should those responsibility for safe guarding the United States' financial system as a whole, step forward and take over the failed system, and, in effect, reward greed and stupidity in order to mitigate the collateral damage and to save the system? (Systematic Pragmatism)
As we come out of the depths of the crisis, it is time to take stock.
Here is the paradox we now face, what was TOO BIG TO FAIL, is today MUCH TOO BIG TO FAIL.
For example: As part of the Bush/Obama solution to the crisis -- big investment banks that failed have been allowed to fail in the case of Lehman Brothers, or forced to merge with stronger ones, i.e. J.P. Morgan/Bear Sterns and Bank of American/Merrill-Lynch. In either case, where there were 5; now there are 2.
Financial innovation such a credit default swaps are sold with no regard to the "product liability" concerns that innovators in other sectors of the economy are held to. Should there be an FDA or CPSC to oversee the manufacture and marketing of "toxic" assets. Should the stock analyst be held accountable for false advertising? Where are the trial lawyers and regulators?
Should the fund managers for the nation's retirement funds, the major investors in Wall Street, be held accountable for their failure as fiduciary agents to safe guard the long term interests of their clients. Should there be special rules for fiduciary capitalism to distinguish it from entrepreneurial capitalism?
Do the survivors of the crisis represent a healthy new heart for our financial system or are they part of the same cancer in the system?
Are the moral ideals of a "free market" and "capitalistic political system" still philosophically valid principles for government today in a global, instantaneous economy where private corporations are free to move assets anywhere at any time without any responsibility to anyone for the consequences?
If governments are the courts and banks of last resort for their people (citizens), can a republican democracy limit their exposure to financial failure while maintaining a principle of moral hazard applicable to its citizens and institutions equally?
Or, Does a systematic pragmatism require a redefinition of the principles of republican democracy and a formal differentiation in the role of government toward different segments of its citizens?
Should any corporation be allowed to become TOO BIG TO FAIL?
These are the questions the American people and their representatives must address in the remaining months of 2009 and will answer in the election of 2010.
Tuesday, September 22, 2009
Saturday, September 12, 2009
Citizen’s United vs. FEC: America in the Balance .
The United States is about to become a republic of corporations, and not the States nor the people. If the Supreme Court decides in favor of Citizen’s United in the case now before it, the voice of the people will be silenced by the wealth of corporations.
The Supreme Court has within its power to declare human citizens null and void as the owners and source of government power. It will proclaim the CORPORATION as the true citizen of this once great nation founded on the principle of individual human freedom.
This is what is at stake in the case of Citizen’s United against the Federal Election Commission. The case will be argued on the narrow bases of length of the “commercial” as a movie (entertainment) protected under the “free speech” principle, or as political propaganda subject to McCain-Feingold campaign finance law. Yet the underlying principle is between the priority of individual human rights over the rights of class privilege and economic power.
The conservative members of the court are reported to have signaled that they would invite arguments to challenge the constitutionality of McCain-Feingold. Over turning McCain-Feingold, would grant to the CEO’s of American and foreign corporations uncontrollable power to buy the government regardless of the wishes of the citizens of this country.
I find this strange. These are the “strict constructionists” and “libertarian” members who should be pro-individual human being and who respect the only contract that counts, the US Constitution. The purpose of that contract, the only purpose, is set forth in the Preamble, which states:
That contract is between the people of United States and one another, not between people (humans) and corporations (fictitious persons). Instead these justices appear to be taking the side of the corporations against the true citizens of the country -- born biologically individuals.
The preamble says “ We, the people,” they did it then for ourselves and now we are their “ Posterity”, They “ ordain[ed] and establish[ed] this Constitution of the United States of America” for this purpose.
Human beings are born as an act of nature, or God. Corporations are fictional creatures invented by government and born of state law. When government can create its “fictional citizens” and those “fictional citizens” in turn can buy the government, who needs the people?
Who represents the people’s desire for a more perfect union, justice, tranquility, common defense? Who promotes (much less determines) the common Welfare? And how are the people to secure the blessing of liberty?
Under current McCain Feingold campaign finance law, the individual’s constitutional right is protected and individuals are free to act in a collective fashion to express their preferences. There is no need or reason to grant special status to the corporation when the owners, workers and management can act as individuals already.
Corporations already enjoy special status -- they are allowed to live in perpetuity and those responsible for the corporation are granted limited liability for their actions. No human citizen is granted such special status.
If the Supreme Court sides with the Corporation and empower it to act like a real person without being held accountable as a real person would be, then they will have broken their oath to defend the Constitution. Instead, they will have rewritten the Constitution.
These Strict Constructionist will be legislating. They will be saying that the Corporation is allowed to use its resources to support political activity rather than for the economic activity they promised their investors. Management will become unaccountable to its owners (stockholders) for their fiduciary performance which they were hired to do. We have seen what damage such managerial misbehavior has brought to investors, other stakeholders, and the people of this nation over the last decade. And we have seen the near total lack of accountability and responsibility that they have been held to by government and the courts.
Where and how are the rights of individual citizens to be protected?
McCain-Feingold and similar campaign finance laws, designed to circumscribe corporate political activity, are the only way the balance of power between the individual and the corporation can be maintained.
In my view, strict construction means “WE, the people”, and not “WE, the corporations”. We the people, not some fictional legal construction, own this government.
This case is not that complex. The Supreme Court Justices can decide for the people or for the fictional corporations. Congress has the power and obligation to serve the people by limiting the powers of the vehicles used by those who control great wealth.
What the Supreme Court decides in the case of Citizens United vs. Federal Election Commission will show just how “strict” these strict constructionists really are.
The Supreme Court has within its power to declare human citizens null and void as the owners and source of government power. It will proclaim the CORPORATION as the true citizen of this once great nation founded on the principle of individual human freedom.
This is what is at stake in the case of Citizen’s United against the Federal Election Commission. The case will be argued on the narrow bases of length of the “commercial” as a movie (entertainment) protected under the “free speech” principle, or as political propaganda subject to McCain-Feingold campaign finance law. Yet the underlying principle is between the priority of individual human rights over the rights of class privilege and economic power.
The conservative members of the court are reported to have signaled that they would invite arguments to challenge the constitutionality of McCain-Feingold. Over turning McCain-Feingold, would grant to the CEO’s of American and foreign corporations uncontrollable power to buy the government regardless of the wishes of the citizens of this country.
I find this strange. These are the “strict constructionists” and “libertarian” members who should be pro-individual human being and who respect the only contract that counts, the US Constitution. The purpose of that contract, the only purpose, is set forth in the Preamble, which states:
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.
That contract is between the people of United States and one another, not between people (humans) and corporations (fictitious persons). Instead these justices appear to be taking the side of the corporations against the true citizens of the country -- born biologically individuals.
The preamble says “ We, the people,” they did it then for ourselves and now we are their “ Posterity”, They “ ordain[ed] and establish[ed] this Constitution of the United States of America” for this purpose.
Human beings are born as an act of nature, or God. Corporations are fictional creatures invented by government and born of state law. When government can create its “fictional citizens” and those “fictional citizens” in turn can buy the government, who needs the people?
Who represents the people’s desire for a more perfect union, justice, tranquility, common defense? Who promotes (much less determines) the common Welfare? And how are the people to secure the blessing of liberty?
Under current McCain Feingold campaign finance law, the individual’s constitutional right is protected and individuals are free to act in a collective fashion to express their preferences. There is no need or reason to grant special status to the corporation when the owners, workers and management can act as individuals already.
Corporations already enjoy special status -- they are allowed to live in perpetuity and those responsible for the corporation are granted limited liability for their actions. No human citizen is granted such special status.
If the Supreme Court sides with the Corporation and empower it to act like a real person without being held accountable as a real person would be, then they will have broken their oath to defend the Constitution. Instead, they will have rewritten the Constitution.
These Strict Constructionist will be legislating. They will be saying that the Corporation is allowed to use its resources to support political activity rather than for the economic activity they promised their investors. Management will become unaccountable to its owners (stockholders) for their fiduciary performance which they were hired to do. We have seen what damage such managerial misbehavior has brought to investors, other stakeholders, and the people of this nation over the last decade. And we have seen the near total lack of accountability and responsibility that they have been held to by government and the courts.
Where and how are the rights of individual citizens to be protected?
McCain-Feingold and similar campaign finance laws, designed to circumscribe corporate political activity, are the only way the balance of power between the individual and the corporation can be maintained.
In my view, strict construction means “WE, the people”, and not “WE, the corporations”. We the people, not some fictional legal construction, own this government.
This case is not that complex. The Supreme Court Justices can decide for the people or for the fictional corporations. Congress has the power and obligation to serve the people by limiting the powers of the vehicles used by those who control great wealth.
What the Supreme Court decides in the case of Citizens United vs. Federal Election Commission will show just how “strict” these strict constructionists really are.
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