Mis-Rule of Law


Injury piles on insult, when the rule of law jumps to conclusions in forcing facts to fit a legal theory.  Take the rights of individual citizens in a representative democracy.  Start with Freedom of Speech.  Then force the facts to monetize it.  Spending power moves up the ladder, on a slippery slope, from a benign property right to “Battle Star Gallactica”.  Equality of Opportunity switches place, through the same hocus pocus, with noblesse oblige.  Put freedom of speech in the judicial blender, thus, and it comes out money talks.

NY Post on Clearing of Zuccotti Park

Photo Source: http://legalinsurrection.com.

Since individual citizens freely associate in a representative democracy, through another leap of judicial faith, there’s an associative property in the exercise of a Constitutional right.  The ‘right’ of individuals to speech in free association – which made plain sense before it was monetized – reproduces itself through Constitutional DNA to conjure an Origin of Species in free associations, including corporations.  So “political speech does not lose First Amendment protection simply because its source is a corporation” (Citizens United v. Federal Election Commission, Supreme Court of the United States, 129 S. Ct. 2893 on June 29, 2009).  Just don’t try it in Zuccotti Park without a permit.

Perish the thought that “a democracy cannot function effectively when its constituent members believe laws are being bought and sold” (dissent of Justice Stevens in Citizens United v. Federal Election Commission), because “it never shows (Justice Scalia) why ‘the freedom of speech’ that was the right of Englishmen did not include the freedom to speak in association with other individuals, including association in the corporate form.”  On condition of proving the negative to a Justice of the Preposterous, the Bill of Rights is coded in crowd sourcing.  So money talks, and the more the merrier.  In the rite of passage from singular to plural – as rights transfer through a constitutionally promiscuous associative property – monetization orbits the transnational mobility of anonymous capital.

Shares of ownership command votes “in the corporate form”.

It ain’t just Englishmen exercising “the freedom to speak in association” with the New York Stock Exchange (NYSE).

Sovereign Wealth Funds command $5.368 trillion worth of votes in “the corporate form” (Sovereign Wealth Fund Institute, updated March 2013).  Their money talks – rightfully – to its stewards in executive suites.  If the talk turns to politics, imagine what’s on these sovereign agendas:

Sovereign Wealth Fund Ranking

JUSTICE OF THE PREPOSTEROUS

What’s been coming lately out of five celebrity Justices on the U.S. Supreme Court, with their fetish about the framers’ original intent in Constitutional interpretation, makes about as much sense as they “are able to appreciate the importance to any manufacturing nation” – meaning Great Britain – “of the markets of three millions of people” – meaning us – “increasing in rapid progression, for the most part exclusively addicted to agriculture, and likely from local circumstances to remain in this disposition.” (“The Utility of the Union in Respect to Commercial Relations and a Navy” by Alexander Hamilton in Federalist No. 11 published November 24, 1787)

Whether there’s any way to show “why ‘the freedom of speech’ that was the right of Englishmen did not include the freedom to speak in association with other individuals”, it didn’t restrain the English Football Association from stripping John Terry in February 2012 of their World Cup team’s captaincy on suspicion of exercising such ‘right’ in a racist remark that also came with a Crown Prosecution kicker (“John Terry Verdict:  FA Finds Chelsea Captain Guilty Over Racism Charge” in The Guardian on September 27, 2012).  Neither did it afford Her Majesty’s Fleet Street armada safe harbor from charges of bounty hunting for tabloid news (“Parliament Asks Murdoch to Discuss Hacking” by Christine Haughney in The New York Times on July 9, 2013).  Be careful what you wish for – forcing facts to fit a legal theory – because you just might get proof of the negative.  Constitutional rights shouldn’t be low lying fruit in a Clockwork Orange grove.

While we’re weaving tales from the crypt of English cobwebs, how’s this for an “association in the corporate form”?

“The East India Company…was an anomaly without a parallel in the history of the world.  It originated from subscriptions, trifling in amount, of a few private individuals…It gradually became a commercial body with gigantic resources, and by the force of unforeseen circumstances assumed the form of a sovereign power, while those by whom its affairs were directed continued, in their individual capacities, to be without power or political influence…The company’s encounters with foreign competitors eventually required it to assemble its own military and administrative departments, thereby becoming an imperial power in its own right…During its heyday, the East India Company not only established trade through Asia and the Middle East but also effectively became the ruler of territories vastly larger than the United Kingdom itself.” (“The British East India Company — the Company that Owned a Nation (or Two)” by George P. Landow, Professor of English and the History of Art, Brown University on The Victorian Web)

British East India Company

Photo Source: The National Archives of the United Kingdom.

“The East India Company foreshadowed the modern world in all sorts of striking ways.  It was one of the first companies to offer limited liability to its shareholders.  It laid the foundations of the British Empire.  It spawned Company Man…The Company lasted for far longer than most private companies precisely because it had two patrons to choose from — prospering from trade in good times and turning to the government for help in bad ones.” (“The East India Company:  The Company that Ruled the Waves” in The Economist on December 11, 2011).

“[T]he political firm…consists of the entire two-tiered hierarchy linking politicians, interest groups, and bureaucrats.”  (“The Politics of Structural Choice:  Toward a Theory of Public Bureaucracy” by Terry M. Moe in Organization Theory From Chester Bernard to the Present and Beyond, Oxford University Press, 1995)  “This two-tiered hierarchy actually does have a reasonable analogy in the world of economic organization…The simplest explanation of the business firm is that it arises out of contractual agreements among individuals.  They agree to a set of rules, typically including a set of authority relationships, to impose a mutually beneficial order on their future exchanges with one another…[T]he firm is understood as a governance structure.”

Obstruction of Justice

Photo Source: http://www.phillips.blogs.com.

“Conventional wisdom has it that the 1773 Tea Act – a tax law passed in London that led to the Boston Tea Party – was simply an increase in the taxes on tea paid by American colonists.  In reality, however, the Tea Act gave the world’s largest transnational corporation – The East India Company – full and unlimited access to the American tea trade…The primary purpose of the Tea Act was to increase the profitability of the East India Company to its stockholders (which included the King and the wealthy elite that kept him secure in power), and to help the Company drive its colonial small-business competitors out of business.  Because the Company no longer had to pay high taxes to England and held a monopoly on the tea it sold in the American colonies, it was able to lower its tea prices to undercut the prices of the local importers and the mom-and-pop tea merchants and tea houses in every town in America.” (“Boston Tea Party” by Thom Hartmann in Unequal Protection:  How Corporations Became People and How You Can Fight Back, ©2010, published by Berrett-Koehler Publishers, Inc.) “This infuriated the independence-minded American colonists, who were wholly unappreciative of their colonies being used as a profit center for the world’s largest multinational corporation, The East India Company…Even in the official British version of the history, the 1773 Tea Act was a ‘legislative maneuver by the British ministry of Lord North to make English tea marketable in America’ with a goal of helping the East India Company quickly ‘sell 17 million pounds of tea stored in England’…[T]he Boston Tea Party resembled in many ways the growing modern-day protests against transnational corporations and small-town efforts to protect themselves from chain-store retailers or factory farms.  With few exceptions, the Tea Party’s participants thought of themselves as protesters against the actions of the multinational East India Company and the government that ‘unfairly’ represented, supported, and served the company while not representing or serving them…Most Americans today believe that the colonists were only upset that they didn’t have a legislature they’d elected that would pass the laws under which they were taxed:  ‘no taxation without representation’ was their rallying cry.  And while that was true…the needle in their side, the pinprick that was really driving their rage, was that England was passing tax laws solely for the benefit of the transnational East India Company corporation, and at the expense of the average American worker and America’s small business owners.  Thus, ‘Taxation without representation’ also meant hitting the average person and small business with taxes, while letting the richest and most powerful corporation in the world off the hook for its taxes…Among the reasons cited in the 1776 Declaration of Independence for separating America from Britain are: ‘For cutting off our Trade with all parts of the world:  For imposing Taxes on us without our Consent.’  The British had used tax and anti-smuggling laws to make it nearly impossible for American small businesses to compete against the huge multinational East India Company, and the Tea Act of 1773 was the final straw.”

When partisan politics gets the gears of Justice stuck in reverse, big surprise if the legacy of British corporate prerogatives goes loony tunes overruling the Declaration of Independence.

Under the new normal corporate citizenship “U.S. companies, along with their lobbyists and trade groups, are treating Washington, D.C., like a big, swampy strip club, showering it with cash in an effort to fight tax reform laws that might put hundreds of billions of dollars back into government coffers.”  (“U.S. Companies Lobbying Furiously To Save Corporate Tax Loopholes” by Mark Gongloff in The Huffington Post on June 18, 2013)

Corporate Tax Havens

Photo Source: http://www.macobserver.com.

Corporate profits have soared to all-time highs as a percentage of U.S. gross domestic product, while corporate taxes are near record lows.  This state of affairs exists largely because the biggest U.S. corporations have for years lobbied Congress for loopholes that allow them to keep much of their profits out of the clutches of the IRS, including an estimated $1.7 trillion in cash held offshore.  Apple Inc. has been the public face of this issue lately, with its CEO Tim Cook hauled before a Senate panel to explain why his company is keeping more than $100 billion offshore.  Apple spent $2 million on lobbying last year and could double that this year, Reuters reported recently…the U.S. financial sector currently makes up 30 percent of total corporate profits, but only coughs up 18 percent of total corporate tax revenues to the government…It’s a free country, of course, and companies, like people, have the right to free speech in the form of campaign donations.  But all that free speech is expensive, and these companies have a lot more money to make their case than the rest of us taxpayers – who will almost certainly keep ending up paying the cost.” (“U.S. Companies Lobbying Furiously To Save Corporate Tax Loopholes”)

“A Corporate tax haven is a country or jurisdiction which sets the right conditions and encourages corporations to set up and use the said country as its residence…Corporate tax havens are mostly offshore jurisdictions.”  (“Corporate Tax Havens” in TaxHavens.biz)  “The majority of corporate tax havens have zero taxation schemes applied to offshore companies which are incorporated in the jurisdiction but have no business operations there.  Offshore companies whose incomes (interest gained, dividends, and profits) are gained outside of the jurisdiction will pay no taxes at all.”  Who besides the brain dead actually believes that this creates American jobs?

“CIVILISATION works only if those who enjoy its benefits are also prepared to pay their share of the costs.”  (“Tax Havens: The Missing $20 Trillion” in The Economist on February 16, 2013)  “If you define a tax haven as a place that tries to attract non-resident funds by offering light regulation, low (or zero) taxation and secrecy, then the world has 50-60 such havens.  These serve as domiciles for more than 2m companies and thousands of banks, funds and insurers.  Nobody really knows how much money is stashed away:  estimates vary from way below to way above $20 trillion.”

FOLLOW THE LEADER

The preponderant “association in the corporate form” tests positive for artificial DNA in the Capital Asset Pricing Model.  Its preponderant ownership is an (institutional) species of “financial institution exercising discretionary management of investment portfolios over $100 million in qualified securities” required to report those holdings to the U.S. Securities and Exchange Commission using Form 13F:

Artificial Intelligence

“Artificial Intelligence”: Less of the Machines | Channeled Essence.

“The proportion of equities managed by institutional investors hovered around five percent from 1900 to 1945.  But after World War II, institutional ownership started to increase, reaching 67 percent by the end of 2010.  An extensive literature documents this growth in their assets as well as the changing composition of the types of stocks in which they invest.  For example, the Institutional Study Report of the Securities and Exchange Commission (1971) finds that institutional equity holdings ‘tend to be concentrated in the shares of the larger, publicly traded corporations’.” (“Institutional Investors and Stock Market Liquidity:  Trends and Relationships” by Marshall E. Blume and Donald B. Keim under auspices of The Wharton School at the University of Pennsylvania in a draft dated August 21, 2012)

The kindred spirit that moves all of this “association in the corporate form” goes for the gain, while dodging the pain.  They gather – under a restrictive covenant to be fruitful and multiply – into clans of pension funds, mutual funds, endowment funds and hedge funds.  Whoever hires them to get ahead of the 8-ball probably doesn’t give a rat’s ass whether their job performance shows “why ‘the freedom of speech’ that was the right of Englishmen did not include the freedom to speak in association with other individuals”. (Citizens United v. Federal Election Commission)

Noah's Ark on Mount Ararat by Simon de Myle

“Follow the Leader”: Noah’s Ark on Mount Ararat by Simon de Myle – Wikimedia Commons.

It’s just not in the job descriptions of institutional investors to do much more than vote with their feet in the game of thrones.  Even though they literally own the outcome, this is a herd with the DNA to follow rather than lead.  Whether this is a rising tide that lifts all ships, they are only along for the ride.

CELEBRITY JUSTICE

Speaking in tongues scrambles static filters for good reason.  It’s the same reason why check balancers ought to balance their own checks.  If rule of law – in the application of judicial precedents to moving targets (stare decisis) – wasn’t instrumental in Constitutional adaptability, why would we bring it back to a prime time Operating Room every year for reconstructive surgery?

threemonkeysthrowingpoop - wordpress.com

“Stare Decisis”: http://ThreeMonkeysThrowingPoop.wordpress.com.

Instead of jumping to conclusions – because five rock stars on the bench are eager to play their own tune – who should know better that “stare decisis…counsels deference to past mistakes, but provides no justification for making new ones”?  (Chief Justice Roberts, speaking for the U.S. Supreme Court, on behalf of the majority opinion in Citizens United v. Federal Election Commission.)

Whether the U.S. Constitution’s authors could’ve possibly anticipated systemic corruption in a monetization of free speech, “Pride goeth before destruction, and an haughty spirit before a fall.”  (The Holy Bible, Proverbs, Chapter 16, Verse 18)

“The 1987 confirmation fight over Robert Bork gave political salience to the dispute between originalism and living constitutionalism as interpretive methods…[T]he debate is no longer relevant to judicial appointments.  Nominees of both parties now present themselves as modest and humble servants of the law, respectful of existing precedent and without a desire to move the law in any particular direction.  Most Senators on both sides of the aisle accept this as the proper model for judging, and the only real question now seems to be whether a given nominee is sincerely pledging allegiance to the accepted ideal.” (“The Supreme Court’s Cult of Celebrity” by Craig Lerner and Nelson Lund in The Volokh Conspiracy on January 19, 2010)

“[A] reform that was advocated long ago by a young John Roberts…[was] motivated by the view that the Court is no longer functioning, according to its original design, as a genuinely judicial institution…[A]n effort to think about changing the incentives that operate on the Justices required some analysis of how existing incentives shape their behavior…[in] the rise of what we call the celebrity Justice…[through a practice that] has allowed and encouraged Justices to pursue personal glory through opinions that sometimes read less like the work of judges than like political manifestos or pop philosophy.  In the twentieth century, moreover, Supreme Court Justices have managed to shed various onerous judicial responsibilities, making possible an ever greater focus on the politically architectonic issues of greatest interest to themselves and to the political, journalistic, and academic elites from which they seek approval.”

“The Supreme Court on Tuesday [June 24, 2013] effectively struck down the heart of the Voting Rights Act of 1965 by a 5-to-4 vote…Chief Justice Roberts wrote that Congress remained free to try to impose federal oversight on states where voting rights were at risk, but must do so based on contemporary data…Congress renewed the act in 2006 after holding extensive hearings on the persistence of racial discrimination at the polls…In her written dissent, Justice Ginsburg said that Congress was the right body to decide whether the law was still needed and where.” (“Supreme Court Invalidates Key Part of Voting Rights Act” by Adam Liptak in The New York Times on June 25, 2013)  “The question in this case, she said, is, ‘Who decides?’  Congress or the court?  The post-Civil War amendments, she observed, are not like many other provisions of the Constitution that treat Congress with suspicion.  The First Amendment, she noted, says ‘Congress shall make no law…’  In contrast, the 15th Amendment ‘instructs that the right to vote shall not be denied or abridged on account of race, and it vests in Congress the power to enforce that right by appropriate legislation’.” (“Supreme Court: Congress Has To Fix Broken Voting Rights Act” by Nina Totenberg in All Things Considered broadcast by  NPR on June 25, 2013)  Just what we needed in this country:  Jim Crow trading in his white sheet for a black robe.  Who knew voting rights count for less than the corporate right to buy votes?

Raft_of_the_Medusa

La Balsa de la Medusa (Museo del Louvre, 1818-19) by Jean Louis Théodore Géricault: http://en.wikipedia.org.

OUT OF TOUCH WITH REALITY

Decoding the message in a bottle, truth is stranger than diction.  “The freedom to speak in association with other individuals, including association in the corporate form” is a tag line for completely out of touch with reality.  If the U.N General Assembly assigned seats by GDP, 10 associations “in the corporate form” – only 3 of them American – would be among the first 50 ducks in a row (World Bank’s 2011 GDP Ranking):

World Bank's 2011 GDP Ranking

So far from a parliamentary “association” of Englishmen, “the corporate form” is a vessel for such DNA as the People’s Republic of China and the royal House of Saud.

Gone forever are the days, when nations go to war with swords and spears.  Because economies of scale concentrate so much more power in the deployment of technology, both government and corporate enterprise are increasingly shaped by the same imperative “moving from a simple to a more complex structure”.  (“Division of Labor and Economic Growth” by Andrea Mario Lavezzi in a paper prepared for the Conference on Old and New Growth Theories in Pisa from October 5-7, 2001)

“The relevant partners to the ‘political contract’…are politicians and interest groups…Organized interest groups…are active and informed in their policy domains…and they have every incentive to mobilize their political resources to get what they want.  They are very likely, as a result, to be the only source of political demands and pressures when structural issues are at stake.”  (“The Politics of Structural Choice:  Toward a Theory of Public Bureaucracy”)

“The best way to put the new economics to use in the politics of structure…is stop thinking of constituency in terms of voters and to start thinking of it in terms of interest groups…[P]oliticians have strong incentives to be sensitive to their interests and demands…[I]t does not make much sense to start with politicians as the prime movers…[Organized interest] groups are the prime movers in the politics of structural choice.”

OBSTRUCTION OF JUSTICE

With the ink still wet on the U.S. Constitution, its authors would’ve thought it creepy for life tenure on the bench to become a celebrity cult around annual séances on “Secrets of the Dead”.  The message in their experimental media was checks and balances.  In order to balance a rogue judiciary that meddles in its own peddle, Congress need only check whether a Justice of the Preposterous has gone bait and switch since his job interview.  Perjury is an impeachable offense under the U.S. Constitution.

“The question of impeachment turns on the meaning of the phrase in the Constitution at Art. II Sec. 4, ‘Treason, Bribery, or other high Crimes and Misdemeanors’…[T]he key to understanding it is the word ‘high’.  It does not mean ‘more serious’.  It refers to those punishable offenses that only apply to high persons, that is, to public officials, those who, because of their official status, are under special obligations that ordinary persons are not under, and which could not be meaningfully applied or justly punished if committed by ordinary persons.”  (“Meaning of High Crimes and Misdemeanors” by Jon Roland of The Constitution Society)

A Mosaic Law by Frederick Dielman

“A Mosaic Law by Frederick Dielman”: http://www.wikipedia.org.

Perjury is usually defined as ‘lying under oath’.  That is not quite right.  The original meaning was ‘violation of one’s oath (or affirmation)’…When a person takes an oath (or affirmation) before giving testimony, he is assuming the role of an official, that of ‘witness under oath’, for the duration of his testimony.  That official position entails a special obligation to tell the truth, the whole truth, and nothing but the truth, and in that capacity, one is punishable in a way he would not be as an ordinary person not under oath.  Therefore, perjury is a high crime.” (“Meaning of High Crimes and Misdemeanors”)  “[A]n offense like ‘obstruction of justice’ or ‘subornation of perjury’ may become ‘abuse of authority’ when done by an official bound by oath.  As such it would be grounds for impeachment and removal from office, but would be punishable by its statutory name once the official is out of office.”

“The dignity and stability of government in all its branches, the morals of the people, and every blessing of society depend so much upon an upright and skilful administration of justice, that the judicial power ought to be distinct from both the legislative and executive, and independent upon both, that so it may be a check upon both, as both should be checks upon that…For misbehavior, the grand inquest of the colony, the house of representatives, should impeach them before the governor and council, where they should have time and opportunity to make their defence; but, if convicted, should be removed from their offices, and subjected to such other punishment as shall be thought proper.” (“Thoughts on Government” in April of 1776 by John Adams in The Founders’ Constitution, Vol. 1, Ch. 4 published by University of Chicago Press)

“The germ of dissolution of our federal government is in the constitution of the federal judiciary; an irresponsible body, (for impeachment is scarcely a scare-crow) working like gravity by night and by day, gaining a little today and a little tomorrow, and advancing its noiseless step like a thief, over the field of jurisdiction, until all shall be usurped from the States, and the government of all be consolidated into one.” (Thomas Jefferson, Letter to Charles Hammond, 1821)  Wearing a blindfold to work, Justice doesn’t even come close to what vanity can’t find in the dark.

The Sorcerer's Apprentice

“Der Zauberlehrling”: http://en.wikipedia.org.

REFERENCE SOURCES

  1. Citizens United v. Federal Election Commission, Supreme Court of the United States, 129 S. Ct. 2893 on June 29, 2009.
  2. Sovereign Wealth Fund Institute, updated March 2013.
  3. Sovereign Wealth Fund Rankings on http://www.ameinfo.com.
  4. The Utility of the Union in Respect to Commercial Relations and a Navy” by Alexander Hamilton in Federalist No. 11 published November 24, 1787.
  5. John Terry Verdict:  FA Finds Chelsea Captain Guilty Over Racism Charge” in The Guardian on September 27, 2012.
  6. Parliament Asks Murdoch to Discuss Hacking” by Christine Haughney in The New York Times on July 9, 2013.
  7. The British East India Company — the Company that Owned a Nation (or Two)” by George P. Landow, Professor of English and the History of Art, Brown University on The Victorian Web.
  8. The East India Company: The Company that Ruled the Waves” in The Economist on December 11, 2011.
  9. The Politics of Structural Choice:  Toward a Theory of Public Bureaucracy” by Terry M. Moe in Organization Theory From Chester Bernard to the Present and Beyond, Oxford University Press, 1995.
  10. Boston Tea Party” by Thom Hartmann in Unequal Protection:  How Corporations Became People and How You Can Fight Back, ©2010, published by Berrett-Koehler Publishers, Inc.
  11. U.S. Companies Lobbying Furiously To Save Corporate Tax Loopholes” by Mark Gongloff in The Huffington Post on June 18, 2013.
  12. Corporate Tax Havens” in TaxHavens.biz.
  13. Tax Havens: The Missing $20 Trillion” in The Economist on February 16, 2013.
  14. Institutional Investors and Stock Market Liquidity:  Trends and Relationships” by Marshall E. Blume and Donald B. Keim under auspices of The Wharton School at the University of Pennsylvania in a draft dated August 21, 2012.
  15. The Supreme Court’s Cult of Celebrity” by Craig Lerner and Nelson Lund in The Volokh Conspiracy on January 19, 2010.
  16. Supreme Court Invalidates Key Part of Voting Rights Act” by Adam Liptak in The New York Times on June 25, 2013.
  17. Supreme Court: Congress Has To Fix Broken Voting Rights Act” by Nina Totenberg in All Things Considered broadcast by  NPR on June 25, 2013.
  18. World Bank’s 2011 GDP Ranking.
  19. Division of Labor and Economic Growth” by Andrea Mario Lavezzi in a paper prepared for the Conference on Old and New Growth Theories in Pisa from October 5-7, 2001.
  20. Meaning of High Crimes and Misdemeanors” by Jon Roland of The Constitution Society.
  21. Thoughts on Government” in April of 1776 by John Adams in The Founders’ Constitution, Vol. 1, Ch. 4 published by University of Chicago Press.
  22. Thomas Jefferson, Letter to Charles Hammond, 1821.

ART & PHOTO REFERENCES

  1. “Cops Clear Zuccotti Park”:  http://legalinsurrection.com.
  2. “No Speech Without Permit”:  http://spiritual-journal.blogspot.com.
  3. “The British East India Company”:  The National Archives of the United Kingdom.
  4. “Der Zauberlehrling”:  http://en.wikipedia.org.
  5. “Corporate Tax Havens”:  http://www.macobserver.com.
  6. “Artificial Intelligence”:  Less of the Machines | Channeled Essence.
  7. “Follow the Leader”:  Noah’s Ark on Mount Ararat by Simon de Myle – Wikimedia Commons.
  8. “Stare Decisis”:  http://ThreeMonkeysThrowingPoop.wordpress.com.
  9. “Obstruction of Justice”:  http://www.phillips.blogs.com.
  10. “A Mosaic Law by Frederick Dielman”:  http://www.wikipedia.org.
  11. La Balsa de la Medusa (Museo del Louvre, 1818-19) by Jean Louis Théodore Géricault:  http://en.wikipedia.org.