Tuesday, June 1, 2010

Problems with democracy - Corporations are not people

The Supreme Court's recent decision holding that corporations have the same free speech rights as persons under the Constitution is the latest in a long line of nonsensical decisions that go back to the 1890's.

Corporations exist because the law gives them the right to exist. Years ago to encourage people to invest in new economic ventures governments created laws allowing people to band together, throw their money in a pot, and be protected from liability for anything stupid they did in that enterprise. Their liability was limited to the amount of money they threw in the pot. Originally there were often requirements on how Corporations conducted their business, in particular requirements that the have a limited and specific corporate purpose.

Corporations have turned out to be wonderful vehicles for generating wealth, and protecting wealth, so wealthy and powerful people have over the years managed to remove most of the restrictions on Corporations by using the economic benefits they confer by their presence as a bargaining chip to reward whatever State or Country gives them the best deal.

As a result Corporations have become a dominant force in politics, able to use their financial muscle and marketing expertise to shape public policy to their will. Wall Street undermines regulation by Government, then gets bailed out when their bad decisions blow up in their face. Corporations suck up billions of dollars in Government subsidies each year, even in the face of evidence the subsidy is counterproductive.

Corporations are not people, they are fictitious entities created for convenience by Government - Congress could abolish them tomorrow. It is nonsense for the Supreme Court to say that even though Congress could abolish them, Congress can't regulate them.


Problems with democracy - 2/3 vote requirements

One of the abuses of the democratic process that has become increasingly popular here in California is imposing 2/3 vote requirements to protect some vested interest. The abusive part of 2/3 vote requirements stems from the fact that typically a bare majority are imposing at 2/3 vote requirement on future voters. So if you have a particular viewpoint and can convince 51 voters out of a 100 current voters to vote your way in the future votes for your point of view equal 2 of the other sides votes. So if tomorrow 65 out of 100 want to vote the other way, they lose.

Now big business has recognized the extraordinary power of imposing 2/3 vote requirements. Proposition 16 on the June 2010 California ballot was an attempt by a private for profit energy company to protect their monopolies by imposing a 2/3 vote requirement on any public entity that wants to try to provide cheaper or greener energy to their citizen/voters. It was barely defeated.

Every government entity should have a rule that no law can impose a higher vote requirement on future voters than is achieved in enacting the law. So if 51% of the voters approve a particular law today, the law cannot impose any requirement higher than 51% approval on future voters.

Update:  Prop 26 on the November 2010 Ballot sought to impose a 2/3 vote requirement to make it harder to impose state or local fees and taxes.  It was approved by 52.5% v. 47.5%.   That was 52.5% of the 43.7% of the eligible voters who actually voted.

California Constitution Article II Section 2.5 provides that a voter who casts a vote...shall have that vote counted.  Doesn't that imply one group of voters cannot devalue the vote of other voters?