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Five changes that would honor the Occupy phenomenon

David Morris: "We need a constitutional amendment consisting of four words: Corporations are not persons."
MinnPost photo by Terry Gydesen
David Morris: “We need a constitutional amendment consisting of four words: Corporations are not persons.”

Jim Hightower likes to tell the story of the moving company in Austin whose slogan is, “If we can get it loose, we can get it moving.” The tens of thousands of people occupying sites around the country, including Minneapolis, may be prying us loose from cynicism and despair.

The next step is to move the country.

Grassroots-driven fundamental change is not without precedent. We can look to the Arab spring. #Occupy Wall Street was self-consciously inspired by the occupation by Egyptians of Tahrir Square. But we can also look to our own history. At the end of the 19th century a political movement arose to confront many of the same concerns that torment us today: concentrated wealth, corporate power, the influence of money on democracy. The populist uprising led to the passage of state and national laws (e.g. antitrust legislation, minimum-wage and maximum-hour statutes) and several constitutional amendments. In 1913 the 16th Amendment allowed an income tax; the 17th Amendment, ratified the same year, required the direct election of senators; the 19th Amendment, ratified in 1920, gave women the right to vote.

What fundamental changes would honor the vision of #Occupy?  I offer five suggestions: two constitutional amendments and three laws.

1. Ratify an amendment: Corporations are not persons

The 14th Amendment, ratified in 1868, gave blacks the constitutional right of citizenship: “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall … 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.”

In 1886, in a case that had nothing to do with corporate personhood, the court clerk wrote a headnote to the case that contained these fateful sentences, “The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of the opinion that it does.”

Some 65 years later Justice William O. Douglas observed that “the Santa Clara case becomes one of the most momentous of all our decisions. Corporations were now armed with constitutional prerogatives.” They made the most of these new prerogatives. The 14th Amendment, written to protect largely defenseless ex-slaves, was used mostly to protect powerful corporations. Of the 150 cases based on the 14th amendment heard by the Supreme Court between 1886 and 1896, 15 involved blacks while 135 involved business entities.

David Morris
David Morris

In the next 20 years, relying on the 1886 “precedent,” the Supreme Court steadily expanded the number of constitutional rights accorded to this new type of person:  in 1893 the 5th Amendment  right of due process;  in 1906 the 4th Amendment protection against search and seizure; in 1908 the 6th Amendment right to a trial by jury. By the 1940s Justice Felix Frankfurter declared, “Artificial or not, corporations have won more rights under law than people have — rights which government has protected with armed force.”

In early 2010 the Supreme Court gave corporations the right, as persons, to spend unlimited amounts of money to influence elections.

A wonderful sign at the Occupy Wall Street protest reads, “I won’t believe corporations are people until Texas executes one.”

We need a constitutional amendment consisting of four words: Corporations are not persons.

2. Ratify an amendment: Money is not speech

In 1976 the Supreme Court ruled that money is speech and therefore protected by the First Amendment. Today members of Congress spend 25-40 percent of their time begging for money. Political scientist Thomas Ferguson observes, “Public opinion has only a weak and inconstant influence on policy. The political system is largely investor-driven, and runs on enormous quantities of money.”

When states or the federal government have tried to make elections fairer the Supreme Court says no. Vermont passed a law to cap campaign expenditures for state offices. The Court struck it down.

Congress tried to stop billionaire candidates from spending an unlimited amount of their own money on their own campaigns. The Supreme Court struck down the law. Speaking for a 5-4 majority, Justice Samuel Alito told Congress that trying to “level electoral opportunities for candidates of different personal wealth” is not “a legitimate government objective.”

Jamie Raskin, a Maryland state senator and law professor at American university, points out that if members of the Fortune 100 spent only l percent of their profits on elections to protect and foster their interests, the total comes to $6 billion, more money than was spent for and on behalf of all congressional and presidential candidates in 2008.

We need a constitutional amendment consisting of four words: Money is not speech.

3. Tax financial transactions

Economist Dean Baker suggests that a modest tax (0.25 percent) could easily raise more than $100 billion a year. “A small increase in trading costs would be a very manageable burden for those who are using financial markets to support productive economic activity. However, it would impose serious costs on those who see the financial markets as a casino in which they place their bets by the day, hour or minute.”

4. Tax all income as ordinary income

Billionaire Warren Buffett has commented on the unfairness of having a lower tax rate than his secretary. That is so because most of his income derives from dividends and capital gains, which are taxed at half the rate as income from work.

In 2007 the 400 Americans with the highest income — nearly $345 million — were taxed at less than half the ordinary tax rate of 35 percent because most of their income was derived from investments. If we were to require that all their income be taxed at the 1999 tax rate of 39.6 percent, this alone would generate an additional $300 billion in revenue over the next 10 years.

5. Declare a moratorium on foreclosures

Foreclosures hurt individuals, neighborhoods and the economy. Dumping millions of homes on the market depresses the overall value of all real estate, increases unemployment and disrupts lives and neighborhoods.

The most effective way to stop the tidal wave of foreclosures is through permanent, sustainable loan modifications that reduce homeowners’ mortgage principal and interest rates to market value.

In a 2010 report, National Peoples Action proposed one strategy. “11 million homeowners are $766 billion under water with their mortgages. Paid off over 30 years this means $73 billion a year [is] needed to reset all underwater homeowners’ principals and interest rates. … (That) would [require] about half of the $143 billion the top six banks alone are getting ready to pay in 2010 in bonuses and compensation.”

David Morris is vice president of the Minneapolis-based Institute for Local Self-Reliance

Comments (23)

  1. Submitted by Richard Schulze on 10/12/2011 - 07:46 am.

    Two words encapsulate Occupy Wall Street:

    Corporate Personhood.

    Corporations should have no part in the political process and they have complete control of it.

  2. Submitted by rolf westgard on 10/12/2011 - 08:03 am.

    Even if you reset those underwater mortgages down to the lower value of the home, many of the borrowers still couldn’t pay. They borrowed more than they could afford.
    It is interesting that an executive of an “Institute of Self Reliance” wants to let people escape from debts that they unwisely incurred.
    This is not to suggest that there is an easy way out of this mess.

  3. Submitted by Dennis Tester on 10/12/2011 - 08:19 am.

    Richard, corporations are a collection of people who have banded together in common purpose. Unions are a collection of people who have banded together for a common purpose.

    It’s intellectually dishonest to ask corporations to give up their rights in the political process without asking the same of unions.

    “In early 2010 the Supreme Court gave corporations the right, as persons, to spend unlimited amounts of money to influence elections.” The same as unions.

    “3. Tax financial transactions” – We generally tax things we want to discourage. So would taxing, and discouraging, financial transactions actually help or hurt the economy? Do we want more financial transactions or less financial transactions?

    “4. Tax all income as ordinary income” – We generally tax things we want to discourage. So would increasing the tax on investments actually help or hurt the economy? Do we want more investment or less investment?

    “5. Declare a moratorium on foreclosures” – If banks are not allowed to recover their assets that are in default, would that make getting a mortgage in the future easier or harder? Would that help the depressed housing industry or hurt it?

    Obama’s problem is that he’s doing the exact opposite of what needs to be done to recover this economy and listening to this kind of short-sighted advice from people like David Morris is not helpful.

  4. Submitted by myles spicer on 10/12/2011 - 08:26 am.

    Excellent article. To me, the Citizens United decision was the most egreguous, damaging, and distorted, SCOTUS decision in modern times; and will have lasting and profound effects for our democracy going forward. It damages the most vital aspect of a democratic nation: our electoral process.

  5. Submitted by Jeff Klein on 10/12/2011 - 09:26 am.

    @3: I think the issues with #3 and #4 are the same: it’s true that we often tax things we want to discourage, but there aren’t enough cigarette sales to sustain our entire government. At some point you simply have to collect, and by the logic Mr. Tester is using, the income tax discourages working, the sales tax discourages buying, etc. There’s no compelling reason to protect rich investors from taxes than anyone else. Additionally, I would say that to some extent we *do* want to discourage financial transactions, at least the kind that are speculative second-by-second computer-made trades that do nothing to create real wealth.

  6. Submitted by Karen Sandness on 10/12/2011 - 09:48 am.

    Dennis:

    I’m in sympathy with the protesters, and I’d actually be fine with forbidding all collective bodies, including corporations, unions, professional associations, business associations, fraternal associations, and non-profits, from contributing to politicians.

    1. Tax financial transactions: The idea is to discourage speculation and encourage long-term holding of assets.

    2. Tax all income as ordinary income: I’d be affected by this, thanks to a small inheritance, but I understand that I lucked out in this respect and that none of these gains were due to my “hard work.”

    3. Moratorium on foreclosures: I have little sympathy with the banks in this respect because they aggressively sought out buyers who were not credit-worthy. (For all their complaints about Barney Frank and Christopher Dodd, the banks were supposed to stop discriminating against worthy buyers, not actively seek out unworthy ones.)

    I know this because at the height of the housing bubble, I was getting two or three “you can own a house!” solicitations in the mail per week, as well as the occasional phone call, and I knew that I could not afford anything but a storage shed at the time.

    Yes, buyers should have been more prudent, but the pressure to buy was intense, and I’m sure the banks were drooling over the prospect of creating life-long debt slaves with such shady deals as interest-only mortgages.

    The banks and buyers BOTH gambled under the assumption that buyers would always have jobs and would always be able to pay off their mortgages. Why should only the buyers suffer?

    But there are practical reasons for a moratorium on foreclosures. People who lose their houses have to join a crowded rental market, move in with relatives, or become homeless. This puts a strain on families and on society in general.

    Since fewer people have the wherewithal to buy houses, foreclosed properties are likely to stand empty, creating an attractive nuisance for vandals and other criminals.

    By the way, I’d like to see a reform that the author of the article didn’t mention: rolling back consumer interest rates to pre-Reagan era levels effective immediately on all outstanding debt and reinstatement of usury as a crime. High interest rates are preventing a lot of people from paying off the credit card debt that they have used to survive during periods of unemployment or low income.

  7. Submitted by James Hamilton on 10/12/2011 - 10:38 am.

    Mr. Morris has not thought through all the consequences of declaring that corporations are not entitled to the same rights and privileges as their owners. His proposal would make it legal to discriminate on behalf or against a minority-owned corporation; it would apply equally to the Fortune 500 and hundreds of thousands of small, closely held corporations throughout the country; it would, as Mr. Tester points out, treat owners and employees (union members) differently.

    The ability to speak one’s mind on political issues always has been tied to money, whether it made it possible to publish a broadsheet in 1776 or to air a two minute commercial on a national broadcast network in 2011.

    The first two proposals are nothing more than a protest against effective speech.

    As for mortgage foreclosures: pass cram-down legislation so that mortgages can be reduced to market levels by bankruptcy courts, where a debtor can convince the court of his or her ability to pay the reduced mortgage balance on current market terms. If the debtor can’t manage that, then there’s no point in prolonging the pain and the property should go into foreclosure. But, absent fraud or similar behaivor on the part of the lender, the law should not be used to excuse those who are not otherwise bankrupt from their obligations.

  8. Submitted by Thomas Swift on 10/12/2011 - 10:43 am.

    The Tea Party started out exactly the same fashion as these “occupiers” did. The Tea Party became a political power to be reckoned with; the “occupiers” will be a faint memory by Thanksgiving.

    Getting government out of our lives is something the majority of Americans can agree with, even if they don’t have a clear idea of precisely what that means.

    Coveting your neighbor’s property, cutting conservative political contributors off at the knees while leaving their leftist counterparts intact and unilaterally forgiving debt are ideas that get leftist kooks excited, but leave Mr. and Mrs. America with a bad taste.

    You can always get a few stoned college kids, burned out hippies, leftist special interest groups and union hacks toghether for a public drum circle, but unless there is a cohesive message that appeals to the mainstream public all you’ll be left with is a pile of dirty blankets and empty ‘za boxes to be cleaned up.

  9. Submitted by Patrick McManus on 10/12/2011 - 11:29 am.

    I think Mr. Morris’ ideas are a good starting point. We should enact his last three points immediately.

    For his first two, he needs more help. He’d be better off with an amendment calling for elections fully funded by the government. No one can contribute money, not even the candidate himself, only money collected through an elections tax could be used. This amendment would also have to limit the ability of third parties to influence elections. So, enacting a provision that bars third parties from advocating on behalf of or against candidates (no more unions, PACs, etc.) needs implementation.

    Two others ideas I’d suggest. The first is lobbying reform of some kind. We need lobbyists, but some industries abuse the system. We need to limit the amount of lobbyists and/or set a limit that interests can spend on lobbying.

    The second would be trust busting. We need to break up the big banks. Also, I think breaking up the media oligopoly extremely important. We need more than five or six media corporations and limits on cross-ownership of television, radio, and papers. We used to have these limits, they need to come back.

  10. Submitted by Dennis Tester on 10/12/2011 - 01:17 pm.

    Patrick, all of your solutions involve limiting or restricting someone’s freedoms. Banning money, banning third-party advocacy, limiting lobbyists, breaking up existing banks and media companies, etc.

    In my view, *any* laws designed to limit our 1st Amendment rights to free speech and to petition government [“…or abridging the freedom of speech, … and to petition the Government for a redress of grievances.”] should be off the table.

    Barack Obama is going to collect and spend a billion dollars for his re-election campaign and I have no problem with that as long as the money comes from people who are eligible to vote in U.S. elections.

    Since most of the money spent is on TV ads, perhaps you could be working to convince these companies to offer free political ad time for all the candidates for a two-week period prior to the election.

  11. Submitted by Ray Schoch on 10/12/2011 - 01:38 pm.

    Mr. Morris falls into the trap typically occupied by Mr. Tester and Mr. Swift: oversimplification.

    I doubt that any amendment, no matter how protective of neofascism and inherited wealth, can be effectively written with only 4 words, and if it can’t be done to protect those that don’t need protection, I have serious doubts that it can be done to protect those that DO need protection. Of course corporations are not people – I have an Aunt living in Texas who sent me a jpeg graphic of that sign a couple weeks ago – but if they can’t speak at all, they can’t advertise, and that would likely destroy whatever shreds of our economy were still operating.

    My inclination – strictly off the top of my head – is to stop treating corporations as children. What we have now are, metaphorically, corporate 3-year-olds. They have virtually all the privileges of citizenship, but none of the responsibilities. Perhaps we should make sure they have responsibilities commensurate with the “personhood” they’ve been granted by the SCOTUS, and one way to do that might be to see to it, via legislation or amendment (of more than 4 words), that corporate CEOs and other relevant executives are held accountable for actions taken by the corporation. Put ‘em in prison if the corporation breaks the law. Confiscate their personal assets, as well as corporate assets, if the corporation has cheated its customers on their watch, or otherwise broken the law in any other than minor and accidental cases. If I poison my neighbor’s well, and his child dies from that poisoned water, there are quite specific consequences for me personally. If a corporation poisons my neighbor’s well, and his child dies from that poisoned water, at present the only consequences – and often there are no meaningful consequences at all – typically take the form of a small fine. Very rarely, it’s a large fine, but in any case, the executives who decided it was OK to poison the water are not personally held responsible for their choice. Perhaps that should change.

    I’ve no idea if such an idea would work, but obviously one of the frustrations of both Tea Partiers and OWS demonstrators is the conviction that no one is being held accountable, whether on the government side for Tea Partiers or the private side for OWS folks. In both cases, the public might be best served by following the money. Money, I think it can be logically argued, is not a “collection of people who have banded together for a common purpose.”

    If Morris’ proposed 5 policies are “intellectually dishonest,” then Mr. Tester’s responses are equally dishonest, since he falls into the same trap of oversimplification.

    As long as “money talks,” and history makes a very strong case that it does, then what to do, as a society, about that specific phenomenon seems an avenue worth pursuing for a society that at least says it’s democratic. Our history is filled with examples of American society struggling with that issue. If we want to limit the influence of money on public policy, or elections, or both, or neither, we have to decide how that will be accomplished. We’ve tried legislation, and people with money – most of whom are neither unions nor union members – have found ways to work around or negate statutory provisions they don’t like. I’d suggest that choosing “neither” essentially turns the society over to that 1% that OWS people are protesting against. Maybe Mr. Tester is OK with that, and doesn’t mind giving up the pretense that ordinary people have some voice in what goes on. If so, it’s a mistake to call him “conservative.” The appropriate term is “reactionary,” or perhaps “royalist.”

    I admire Mr. Swift’s predilection for speaking for the whole of the citizenry, but see no evidence that there’s any basis for his confidence. He may be right about the OWS protesters, and they may well disappear – at least from public view – with the end of good weather. If not, I look forward to his apologetic retraction. Otherwise, most of what he’s written here is projection of the vaguest sort – itself a kind of demagoguery. Plenty of hostility is evident, but very little beyond that.

  12. Submitted by Patrick McManus on 10/12/2011 - 02:08 pm.

    Dennis,

    I’m not against free speech by any means.

    Breaking up big media creates more speech. We would have more ideas, more reporting, more and different angles, etc. We would have a bigger marketplace to obtain information. I’m proposing the direct opposite of taking away rights and taking away speech, I’m proposing more speech.

    As for limiting lobbying and outside money, well, money and the ability to purchase goods or services with money is not speech. Speech is expression through words, symbols, etc. The First Amendment guarantees this. However, it does not guarantee the right of dissemination.

    Money equals dissemination of speech. You have the right to go to a park and speak your peace, join the OWS, say what you want at home etc. However, you don’t have the guaranteed right to access to non-public entities that disseminate what you freely say. You don’t have the right to buy space in newspapers or on television. You may do so, but it’s not up to you to determine, thus it’s not a right. We don’t protect the ability to disseminate speech Dennis, we protect the ability to speak.

    The current system is not speech. It’s a legal form of bribery to influence policy. It happens when lobbyists offer campaign cash or access to networks for campaign cash. It also happens when big business or big labor offer money for campaigns in return for expected policy favors. Elected officials shouldn’t spend nearly half their time in office raising money. Their elected mission is to lead and legislate, raising money takes time away from their mission. Additionally, ending the bribery will allow elected officials to make decisions on what’s best for the people or for the country, instead of what’s best for their financiers in order to get reelected. True political calculations will always influence policy and decisions, but by eliminating the financiers we take away a significant factor that elected officials consider when deciding upon policy.

  13. Submitted by myles spicer on 10/12/2011 - 02:24 pm.

    Actually, Thomas is 180 degrees wrong. The Tea Party is already in our rear view mirror. Once the public began to understand their agenda, they rejected it out of hand. Best example is the Ryan medicare idea, which conservatives could not run away from fast enough.

    The occupiers, on the other hand are a metaphor for ongoing conflict between the “haves” and “have nots”. This has gone on forever historically, and everywhere on the planet. It is here to stay.

  14. Submitted by Pat Thompson on 10/12/2011 - 03:29 pm.

    I love the fact that people like Karen #6 take the time to write coherent responses that carry a discussion like this further. I second everything she said.

  15. Submitted by Ginny Martin on 10/12/2011 - 05:51 pm.

    “Even if you reset those underwater mortgages down to the lower value of the home, many of the borrowers still couldn’t pay. They borrowed more than they could afford.”
    I haven’t heard that one for a while, since it became common knowledge that banks and lenders misrepresented the mortgage loans, lied, had “robo-signers” who never looked at the mortgage agreement, and a ton of other things for which no mortgage holder was responsible.
    Put this blame back where it belongs–on the bankers and Wall street that sold and resold mortgages.
    I tried to get to the Minneapolis Occupy site on Sunday (as part of my religious obligation and I’m serious), but couldn’t. I plan to go this coming weekend.

  16. Submitted by Dennis Tester on 10/12/2011 - 06:47 pm.

    “They have virtually all the privileges of citizenship, but none of the responsibilities.”

    Nonsense. The only responsibility you have as a citizen is to obey the law.

    Ever hear of Enron? Jeffrey Skilling is currently serving a 24-year, four-month prison sentence at the Federal Correctional Institution in Englewood, Colorado.

  17. Submitted by Cynthia Ahlgren on 10/12/2011 - 11:17 pm.

    I would like to add:
    Take back our elections by restoring paper ballots, hand counted. The election process has been corporatized. The voting machines and vote tabulators are yet another source of profit as well as an opportunity for the corporations to manipulate the outcome. I am not saying that it is not possible to hold a fair election using computer technology, but we cannot know whether an outcome is in fact fair. It is invisible and out of our hands. The outcomes will always be suspect when we do not count the ballots in an open and transparent process. Every type of election machinery has been proven to be easily “hackable.” As a former election judge who actually counted paper ballots, I know it is possible and it feels good. It feels like democracy.

  18. Submitted by Glenn Mesaros on 10/13/2011 - 06:58 am.

    why is morris protecting obama and the big mega banks by ignoring the law they fear the most: HR 1489 Marcy Kaptur return to Glass Steagall legisation that FDR pioneered in 1933?

    Is he ignorant of the growing list of co sponsors, including Keith Ellison?

    Is he spinning a communitarian fascist, anti capitalist web from the legacy of Benito Mussolini similar communitarian policies?

    Glass Steagall had conservative and liberal support from 1933 to 1999 when it regulated banks and provided a solid foundation for a modern capitalist economy.

  19. Submitted by Richard Schulze on 10/13/2011 - 07:06 am.

    There is no doubt that some of what we are hearing out of the Wall Street encampment is correct, and there have been good suggestions as to how to translate these sentiments into action. But perhaps the biggest reason young people feel so alienated by their government is because they have removed themselves from the process of choosing it. Tea-party people have been known to take over public spaces, too. Then they go vote.

  20. Submitted by Patrick Wells on 10/13/2011 - 10:22 am.

    Can everyone agree to sign a petition to prosecute the financial criminals no matter which political party is responsible?
    Sign the petition:
    http://www.change.org/petitions/barack-obama-prosecute-the-financial-criminals?share_id=QxmttYvaWA&pe=pce

  21. Submitted by David Greene on 10/13/2011 - 05:38 pm.

    @Dennis (#10)

    “Barack Obama is going to collect and spend a billion dollars for his re-election campaign and I have no problem with that as long as the money comes from people who are eligible to vote in U.S. elections.”

    Last I checked, corporations can’t vote.

    Or are you OK with the Republican candidate raising money from “people” who can’t vote?

    Let’s at least be consistent with yourself, Dennis.

  22. Submitted by Dennis Tester on 10/14/2011 - 10:22 pm.

    David, I’d be satified if Obama donors were limited to U.S. citizens since estimates are he collected $300-400 million last time from foreign nationals.

  23. Submitted by Bernice Vetsch on 10/15/2011 - 04:59 pm.

    Dennis (#22)

    See politifact.com/truth-o-meter/statements/2010/Oct/26/michael-steele-says-obamas/claims/hypocritical etc etc etc

    Politifact’s conclusion after examining both the Obama and McCain campaign finance records was that Michael Steele’s statement about Obama accepting contributions from foreign nations was FALSE.

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