The Aristocracy of the Moneyed Corporations

“I hope we shall crush in its birth the aristocracy of our moneyed corporations.” 

Thomas Jefferson

In Citizens United v. FEC on January 21, 2010, the US Supreme Court held by 5 to 4 that because US corporations are legal persons, they can contribute to political campaigns.   The assumption here is that corporations are more than the sum of an aggregate of persons—that is, more than citizens associating.  The corporate entity has rights in itself.  Ginsberg and Sotomeyer questioned in oral arguments whether free speech applies to spending money, and, moreover, whether corporations should be considered legal persons, much less citizens.  After all, they can’t be drafted, or vote.

The full essay is at "Aristocracy of the Moneyed Corporations."

A Tax Unfair to Big Banks?

In a political economy in which large concentrations of privately-held capital, such as that of a bank or large corporation, can legally make political contributions, curiously as "free speech," even the President of the United States may actually be a paper tiger. Even when the federal government comes to the resue of a bank, Wall Street can evade any "strings" and even use the funds to pay out bonuses. Meanwhile, the American people take their elected representatives' speeches at face value, and this suites Wall Street just fine.  

The full essay is at "An Unfair Tax?"

Political Campaign Coverage: A Question of Substance

Popular election presumes meaningful discourse on current issues and political philosophy so the voters can distinguish the candidates.  Too often, however, the media takes its eyes off the ball and orients its coverage to the process rather than the content.  

The full essay is at "Political Campaign Coverage."

Hints of a Shift Back to Federalism?

In the US Senate race in Massachusetts between Scott Brown and Martha Coakley, there was some resistance to the proposed federal health care legislation. This pushback was in line with reinvigorating a federal system for the United States.

The full essay is at "Shift Back to Federalism."

TARP and Foreclosures: A Matter of Misplaced Priorities

Neil Kashkari wrote up the U.S. Treasury department’s Break the Glass Bank Recapitalization Plan in April, 2008—months before the financial crisis—as a “just in case.” It was essentially the TARP program.  Karshkari states in his plan that governmental purchases of toxic mortgage-based assets would do “nothing to help homeowners without [there being] a complimentary program.” He notes that should there be a crisis, “there would be enormous political pressure” for relief going to homeowners in trouble.  Considering the noted downside to his plan, he may have viewed any such pressure from “the masses” as a problem to be ignored rather than even assuaged.  He also admits in his plan that it would provide “no guarantee banks [would] resume lending.”  It is odd that his was made explicit yet not dealt with.  He does gloss an alternative option (C) that would involve refinancing the troubled mortgages, though he assumes a (needlessly cumbersome) case by case basis and that the servicers would determine which loans to put into the program.  The culprits could opt out to insist on the higher payments. In other words, Kashkari was assuming that the government shouldn’t or couldn’t force the banks to take write-downs.  As a former Goldman Sachs man himself (like his boss at the time, Henry Paulson), Kashkari probably didn’t want to propose anything that the bankers wouldn’t view as being in their interest.

The full essay is at "Essays on the Financial Crisis."

Bankers Writing Financial Reform Law: A Case of the Wolves Designing the Chicken Coop

The financial reform bill approved in December, 2009 by the US House of Representatives proposed to regulate the financial industry and keep firms from growing “too big to fail.” The bill can be likened to a ship made of Swiss cheeze, yet seemingly seaworthy. A key intention of the bill was to gain control over the vast market in “over the counter” derivatives by forcing trading onto open exchanges, where regulators can monitor it. Unregulated derivatives were behind much of the havoc that nearly brought down the financial system in 2008, including the subprime-mortgage-backed securities that put many firms underwater and the credit default swaps sold by AIG, the giant insurance company that sucked up about $180 billion in bailout money. The $592 trillion global market in these mostly unmonitored derivatives remained in 2009 among the most profitable businesses for the biggest banks—Goldman Sachs, JPMorgan Chase, Citigroup, Bank of America, and Morgan Stanley—and Wall Street doesn’t want Washington tampering with it. Early versions of Frank’s bill allowed many derivatives to continue trading off exchanges. The bill, Frank wrote, “could be subject to manipulation” by “clever financial firms” seeking to evade a requirement that they trade derivatives on open exchanges.

The full essay is at "Bankers Writing Financial Reform Law."

Private Financial Interests in the Public Square: Crowding Out by Design

Is the typical American self-centered and greedy, or is there a civic-mindedness that yearns to bracket one's own interests?  In other words, is there more to American society than being the sum of the parts? Is there something more than the aggregate?  I don’t mean to criticize individualism here; creativity and liberty, for example, are individualistic traits that highlight a person's character and virtue. Nor do I mean to point to one of the two major parties. One could point to the democrats protecting unions at the expense of a free market for labor just as one could point to rich republicans holding tax cuts hostage unless they are included even though they could afford higher taxes.  If there is something more to American politics than asserting one's own interests, who is to represent the civic component?

The full essay is at "Private Financial Interests."

Federalism Facilitating Self-Preservation

The rights to life, liberty and the pursuit of property (Locke) or happiness (Jefferson) can all fit within a federal system that enables its two systems of government—that of the federation itself and the republics  or (member) states—to check and balance each other. The alternative, at least for a federal empire, may be a return to the state of nature.

The complete essay is at Essays on Two Federal Empires, available at Amazon.

The U.S. National Debt: On the Addiction of Living Beyond One's Means

Twelve times a thousand times a billion  Such a number can only be known abstractly to the human mind.  A person is not apt to see 12 trillion widgets and thus fully realize how many that number signifies. Just in an abstract sense, however, the number can be understood represent debt that is beyond sustainability.   If not, then exactly how much signifies the threshold over which any additional debt will never be paid back? The U.S. federal debt stands at $12 billion as 2009 is drawing to a close.  If this amount is difficult for us to contemplate, how realistic is it that the debt will ever be paid off? that the debt has been growing since the late 1990s may mean that the question of paying off the federal debt might never be seriously entertained. 

The full essay is at "U.S. National Debt."

Are the EU and the US Commensurate?

Are the E.U. and U.S. commensurate? The conventional "wisdom" says no, but are most people, including most European leaders, missing something that in retrospect may be considered rather obvious? 

The full essay is at Essays on Two Federal Empires.

Integrity in the Job-Description of a US Senator: On the Role of the Senate's Design and Purposes

Micheal Bennet, who represented Colorado as a U.S. Senator, told a journalist in 2009 that the possibility of losing his seat  in 2010 should not hold him back from voting for health-care reform even if it were unpopular in Colorado.   The journalist, of CNN, asked, "If you get to the final point and you are a critical vote for health care reform, and every piece of evidence tells you, if you support that bill, you will lose your job, would you cast the vote and lose your job?" Bennet replied, "Yes."[1] Voting in line with the best interests of his fellow citizens would evince a degree of political integrity that I suspect few in the biz have today. However, might a representative be wrong and his or her constituents right about the long term best interest? Is a U.S. senator necessarily smarter or more capable of insight? Lest Bennet be criticized here for failing to have represented his constituents, one might take a look back at Madison’s Notes to the constitutional convention for guidance. 

The complete essay is at Essays on Two Federal Empires.

1. Josh Gerstein, "Bennet Willing to Sacrifice Seat over Health Vote," Politico, November 11, 2009. 

Twenty years after the Berlin Wall fell: Vor zwanzige Jahre ist die Mauer gefallen

It was a gray rainy Monday in Berlin, yet the sun was shining for those in Europe who are celebrating the fall of the iron curtain.   Twenty years ago from that day, it would have seemed surreal to the east Germans who could suddenly simply walk across a border without fear of being shot.  People simply walked through.  “I just wanted to set foot on your side,” one man said.  “Can I cross over there and visit my parents?” a woman asked.  The east German police could only say, “go ahead.”  There would be no criminal penalties.  Before long, people climbed the wall and started chiseling away.  “The wall has to go,” they cried, “Sie ist zu Ende.”

The full essay is at "Twenty Years after the Berlin Wall Fell."

Is Corporate Social Responsibility the Same as Business Ethics?

Corporate Social Responsibility (CSR) is typically thought to be a topic in the field of business ethics. If a company is socially responsible, it is typically presumed to be ethical in being socially responsible. Solidifying this attribution, some scholars of CSR have even sought to explicitly base it on specific ethical principles. However, contrasting a corporate policy with societal norms or specifying how corporations can get in line with them is not to provide an ethical justification.  Even if a societal norm is consistent with an ethical principle, the norm itself is something that is, rather than a justification for what ought to be. To attempt to derive ought from is is known as the naturalistic fallacy. It is like getting what ought to be from a melon ripening in a field. Is does not imply or justify ought.


This paragraph has been incorporated into the introduction in Cases of Unethical Business, which is available in print and as an ebook at Amazon.

Institutional Conflicts of Interest

Although conflicts of interest do not inevitably lead to unethical conduct, they raise the probability that it will occur. Just as a tornado watch indicates that conditions are favorable to the formation of a twister, a conflict of interest evinces conditions favorable to unethical decisions. Interests conflicting in a conflict of interest pit an obligation against either another obligation or self-interest. That is to say, such conflicts tend to involve deontology and egoism.


The full essay is at Institutional Conflicts of Interest, available at Amazon.

Nationalism in Europe: Forestalling Ever Closer Union

Ask a European if the E.U. government could ever consolidate power from the state governments and you would probably get, Nope, we identity with our respective countries. The problem is, such attachments can change. Indeed, they have changed. Europeans alive after fifty years of "ever closer union" would do well to look back at the U.S. after its first fifty (or one hundred) years to get a sense of how the E.U., too, could change. 

The complete essay is at Essays on Two Federal Empires, available at Amazon.