Editor’s note: The text of this article has been corrected; see below.
How does a movement start? Thursday evening, about two dozen people gathered in Raleigh in support of the “Move to Amend,” a nationwide effort to overturn the Supreme Court’s Citizens United decision. A bumper sticker said it best: “If corporations are people, democracy is toast.”
The 2010 Citizens United decision didn’t suddenly allow corporations and the wealthy to spend huge sums of money in American political campaigns. They were already doing that. But in its zeal to justify what many regard as a corruption of democracy, the Supreme Court held that corporations have the same political rights as people, including a First Amendment “right” to pour as much money into political speech as they like.
“Isn’t it crazy that we need a movement to put an end to this?” asked Leesa George Friday, the guest speaker and a veteran activist from Gastonia.
Still, Friday argued, Citizens United “was actually a good thing for those of who want transformative change in our country.” Fifteen years ago, she said, you couldn’t convince people, liberal or conservative, to think seriously about changing the Constitution. Too sacred a document. Too many unintended consequences if you opened it up.
But the Supreme Court’s ruling, Friday says, with all that it represents about a system that seems rigged in favor of the few, has liberals and some tea party conservatives considering how to overhaul the basic structure of government.
Mitt Romney famously epitomized the issue when, heckled about Citizens United at a campaign stop a few months ago, he got mad and blurted out what he really thinks: “Corporations are people, my friend.”
No, they’re not. Corporations employ people and people own them. The corporation is a legal structure for conducting business, designed so that the owners can reap profits but be shielded as persons from any liabilities or debts.
Romney knows how this works as well as anyone. The private equity corporation he co-founded, Bain Capital, generated huge profits for its owners (including Romney) by borrowing to the hilt, making risky investments and either cashing in when an investment clicked or walking away from the debt, via bankruptcy, when an investment flopped.
“Romney’s Bain Yielded Private Gains, Socialized Losses” read the headline on a report published by Bloomberg on Sunday. Anthony Luzzatto Gardner, a private-equity manager in London, analyzed Bain’s deals under Romney from 1985 to 1999, the firm’s heyday. Only 10 of Bain’s 67 investments made any money, Gardner writes, and even of those 10, four ended in bankruptcy.
Leveragedebt at a very high ratio to the investmentis the secret to what Gardner terms “casino capitalism.” Romney generated high returns for his investors, Gardner writes, “through heavy use of tax-deductible debt, usually to finance outsized dividends for the firms’ partners and investors. When some of the investments went bad, workers and creditors felt most of the pain. Romney privatized the gains and socialized the losses.”
The public may not understand Romney’s methods, but the outlines aren’t complicated. Financiers use borrowed money to grab a company and to try to grow it. If they succeed, they flip it and get rich. If it doesn’t, they make a little money from dividends and fees, but the company and its workers are kaput.
One way the so-called investors try to grow a company is by eliminating workers and outsourcing their jobs, often to other countries. In the ’80s and ’90s, when only a few casino capitalists were in the market, this worked for a lot of them, but only when values were rising overall.
By 2007, the market was flooded with borrowed money so far in excess of actual values that the bubble burst, and the casino capitalists’ losses brought the economic world to its knees. The U.S. government and European governments bailed out their banks, socializing the capitalists’ losses so they could continue to beat least on paperprofitable.
The meeting in Raleigh was hosted by N.C. Voters for Clean Elections (NCVCE), a coalition of progressive groups led by executive director Melissa Price Kromm. NCVCE’s original purpose was to lobby for public financing of political campaigns. But that once-promising idea has “hit a wall” with the advent of Citizens United and the flood of money pouring into campaigns from special interests and the rich.
So Kromm has become a point person for the Move to Amend movement, organizing community groups whose first objective is to win over local governments. The Triangle Move to Amend group recently persuaded the Raleigh City Council to pass a resolution calling for the Supreme Court’s ruling to be overturned. Carrboro, Chapel Hill, Durham and Orange County governments have approved similar measures.
Nationally, Move to Amend has a heavy Green Party orientation and ties to the Occupy Wall Street movement. Other allied efforts are under way through Common Cause, Public Citizen and other progressive organizations like NCVCE.
It’s unclear how Citizens United might be overcome, whether by a constitutional amendment, an act of Congress, a reversal by the Supreme Court or all of the above.
What’s important now, Friday says, is to recognize that the court’s ruling, combined with Romney’s candidacy and the failure of the American economy to generate jobs, have created a chance to redefine government and societya movement, in other words.
A movement could lead to a simple change to the Constitution limiting the First Amendment to people, not corporations. It may prompt people to pledge a living wage, national health care or citizenship for all North Americans in our basic charter.
Movement is a scary word, Friday told the Raleigh group. It suggests a lot of hard work. But there’s no hurry. For a movement to succeed, it will take the rest of your life.
Correction: The sentence that read “A movement could lead to a simple change to the Constitution limiting people’s First Amendment rights.” should have instead concluded “…limiting the First Amendment to people, not corporations.” We regret the error.