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Author Topic:   The Problem With Socialism
jwhop
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posted May 07, 2010 09:33 AM     Click Here to See the Profile for jwhop     Edit/Delete Message
The problem with Socialism is that you eventually run out of other people's money. So said Margaret Thatcher, former PM of Great Britain.

We now see this truism playing out in Socialist Europe as it has previously played out in other Socialist regimes around the world as nations became economic basket cases requiring other peoples money to keep their fraudulent systems afloat.

Greece is on fire as Socialist and Communist union protesters rampage in the streets. Greece is broke; largely because of fat salaries, health care costs and pension costs for public union employees...not to mention the entitlement mentality of Greek citizens.

For months, Greece has lobbied for a bailout from European governments. Now, it appears Greece is going to get their bailout from the IMF and US taxpayer funds will fund about 17% of the money to bail out the Greek government. Since O'Bomber is running a $1.4 Trillion budget deficit, that means the US will be helping to bail out Greece with BORROWED MONEY.

So now, Socialist and Communists are rampaging in the streets of Greece protesting the mild cutbacks in overly fat government union salaries, and government pensions which were awarded to public union employess who produce no wealth but who consume every Euro they can get their hands on.

Spain, Portugal and Italy are not far away from needing their own fix of other people's money to prevent national bankruptcy.

The problem with Socialism is that it isn't a wealth producing system. Socialism is a wealth consuming system where hard work, thrift, investment and success are penalized and sloth, indolence and voting yourself goodies from the public treasury are rewarded.

Guess what. O'Bomber has America on the very same track. O'Bomber has vastly expanded government union employment and government employees make about $20,000 more per year than private sector employees doing similar jobs. Much more when perks of employment like public union pensions and health care are added.

While O'Bomber has utterly failed to set the stage for an economic recovery in the private sector economy...the sector which is the wealth producing sector, O'Bomber has protected and enlarged government union employment...which is the wealth consuming sector.

Further, the so called Stimulus money was mainly used to bail out overly fat state and public employee union salaries, health care and pension funds.

If you want to see what America will look like in a few short years, look at Greece, Spain, Portugal, Italy and perhaps Great Britain....today.

There is only one cure to prevent the future bankruptcy of the United States.

Throw all Socialists out of Congress, out of decision making agencies of the federal government, out of state governments and out of the White House...and keep Socialists far away from the levers of power in government at all levels.

One other thing. Don't be confused by "Progressive" double speak. "Progressives" are Socialists. "Progressives" are not Liberals.

Crisis Deepens; Chaos Grips Greece

ATHENS—Greece's fiscal crisis took a new turn to violence Wednesday when three people died in a firebomb attack amid a paralyzing national strike.....

http://online.wsj.com/article/SB100014240527487039611045752 25472577513414.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsTop


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AcousticGod
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posted May 07, 2010 11:11 AM     Click Here to See the Profile for AcousticGod     Edit/Delete Message
I wonder what would happen if we ran out of other people's money.

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jwhop
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posted May 07, 2010 11:18 AM     Click Here to See the Profile for jwhop     Edit/Delete Message
We're about to find out what will happen when we run out of other people's money...defined as...when other people, China and Japan refuse to lend the US any more money by refusing to buy any more US government bonds at US bond auctions.

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katatonic
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posted May 07, 2010 11:19 AM     Click Here to See the Profile for katatonic     Edit/Delete Message
money being a construct anyway, and backed by basically nothing these days, it would not be that hard to just forgive everyone's debts - though i tend to think those that made money out of helping others INTO debt should contribute to the pot not take from it. time to start again folks, the global system is bankrupt except for the money controllers. usury is "illegal" in almost every country but still it goes on...

as to greece it is seldom the fat cats who go out and protest, but those who are up against it. why do you think it is any different there?

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jwhop
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posted May 07, 2010 12:28 PM     Click Here to See the Profile for jwhop     Edit/Delete Message
It's not those "who are up against it" who are rioting in the streets of Greece. It's over paid and over funded public union employees and their Communist and Socialist union leaders.

Yeah katatonic, just dissolve everyone's debt. That's the fastest way to a 3rd world banana republic...long a wet dream of Communists and Socialists for America.

The Socialist party is almost over. The day of reckoning is fast approaching.

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katatonic
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posted May 07, 2010 01:09 PM     Click Here to See the Profile for katatonic     Edit/Delete Message
well apart from the fact that i was joking, as obviously it is never going to happen, i still think it is the obvious solution. money is just paper at this point...debts also. nothing to do with socialism. but cling to your pieces of paper if you insist i really don't expect any govt let alone all of them to do the kind thing by letting the little guys off the hook for what the big players have created.

seems britain has now got itself a hung parliament...reminds me of 35 years ago, a charming time complete with post box bombs courtesy of the ira, garbage piled in the streets due to strikes, the national front blaming the commonwealth "immigrants" like the pakistanis and jamaicans who were "stealing" their jobs (as if)...

funny thing was that life went on in its classically english way. toffs are still toffs and the underclass is still getting kicked while its down.

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jwhop
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posted May 07, 2010 02:02 PM     Click Here to See the Profile for jwhop     Edit/Delete Message
Yes, money is just paper katatonic. But, that paper is backed by the full faith and credit of the United States...and the American taxpayer.

Perhaps you believe we should do away with money..or the appearance of money...altogether and institute the Marxist axiom..."to each according to his needs".

Wouldn't that be lovely? Everyone working side by side doing their share of the work and sharing equally in the "wealth"...the productive output of goods and services?

Yes, the fraudulent words and images of Communist ideology, where...Communist party members went shopping in the G.U.M. department store stocked with goods citizens of the Soviet Union didn't have access to, then got in their hand built Zils and motored off in their chauffeured limos to their Dacha.

In the meantime, the little babushka stood in line for hours to buy some wilted vegetables...unless they had run out..then walked to the bus stop with her meager haul, caught the bus, got off at her apartment complex and climbed the stairs to her prison cell sized apartment.

Yep, that's sharing the wealth equally...according to Communist "PRACTICE".

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katatonic
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posted May 07, 2010 02:25 PM     Click Here to See the Profile for katatonic     Edit/Delete Message
now you are taking the p!ss sirrah. no i don't think we should level the playing field and make everyone equally drab if that is what you mean. allow me my fantasy however where the clever moneylenders do not drive the foolish dreamers into the ground for a few more digits in their bank accounts.

but communist russia was not that different from czarist russia in that respect. the peasants had only what they could eke from the land and the cossacks would stop by to relieve them of even that AND their lives when they were feeling sadistic...why do you think the russians bought the new style? because they were happy as they were and a few ruffians decided to take over? nyet!! my grandmother never really recovered from the day the cossacks visited her village and she alone (age 17) of her family got away with her life.

of course they had their religion to comfort them, not quite as good as food and warm clothes but better than nothing!

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AcousticGod
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posted May 07, 2010 03:32 PM     Click Here to See the Profile for AcousticGod     Edit/Delete Message
There's only one American President in recent times who's tried to ween us off the foreign dollar, and he was a Democrat. Oh, and I think he'd call himself a Progressive as well. So much for that theory Jwhop.

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AbsintheDragonfly
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posted May 07, 2010 04:30 PM     Click Here to See the Profile for AbsintheDragonfly     Edit/Delete Message
Lincoln did too if I'm not mistaken.

There are problems like you mentioned here in America too, Jwhop. Obviously, people don't wait in lines for hours for wilted vegetables, however, people do scrounge, and have trouble getting by, live in their crummy neighborhood, with their cockroach/vermin infested apartment, while the wealthy drive by in their (fill in the blank) luxury car, and shop at fancy botiques, etc. I don't think those problems are limited to any one country. Sometimes they are just better hidden in countries, you know swept out of site, so that it's neat and tidy, and Stepford like.

I think the real conversation, ought to be about, how to we best go about solving these problems. I hate to think of anyone going hungry, you know? Especially children.

------------------
We cannot seek or attain health, wealth, learning, justice or kindness in general. Action is always specific, concrete, individualized, unique. --Benjamin Jowett


It is in giving that we receive. --Saint Francis of Assisi

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katatonic
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posted May 07, 2010 05:16 PM     Click Here to See the Profile for katatonic     Edit/Delete Message
in fact these problems have yet to be solved by any form of government. and since it is true that government is basically the evolution of protection rackets unlikely they ever will be. in the old days in the old country (england for example) the common lands, such as those "grabbed" by the feds in roosevelt's time, afforded a great deal of sustenance for those without "means"...in the form of hunting and planting, finding shelter etc. in fact that is what the common lands (popularly known as "commons" just like the house of p) were for, so that even though the king commandeered most things and land there was something to make a living on for everyone.

but whether they be aristocrats, bureaucrats or democrats, there are always some who live on the smaller top of the heap and the rest watch them drive by in the rolls royce equivalent of their time.

with or without money this would probably be the case. which is why SOME people have tried to level the playing field by LAW. so far it hasn't worked out too well has it?

i agree with AD it has nothing to do with socialist/capitalist/monarchist/anyist. the question really is how to make sure everyone has "enough" without those at the top being reined in in some way? because whether it comes from taxes or charity or crime, the havenots cost the rest of us something anyway.

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katatonic
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posted May 07, 2010 05:44 PM     Click Here to See the Profile for katatonic     Edit/Delete Message
speaking of greece does anyone else think it was basically planned for this to happen? is anyone reminded of preWWII germany (when uranus was also in aries squaring saturn in libra and pluto in cap, wasn't it?) besides this writer and moi?

The Crisis In Greece Presages The Arrival Of Uranus In Aries

The Greek riots are beyond spark at this point–they are starting to reach full tilt blaze. Of course, footage of what’s happening there and in places like Iceland are not found in great abundance in here in the US. No. we’re searching for the next big terror threat, packing SUV’s with fireworks and fertilizer. The Greek riots are significant to say the least. To understand why people are ****** , we need to look at why the Greeks are being charred like souvlaki over the naked flame of betrayal. Does the name Goldman Sachs ring a a bell?

In 2002, Goldman Sachs and Greece’s debt managers decided to pump life into the Greek economy. For those that are still living in the 19th Century, GNP and GDP are no longer what they seem to be or perhaps never were. Greece and nearly every other country in the first world cannot rely on it’s own resources and burgeoning industry (unless you happen to be Poland) to compete in the global economy. That’s where GS comes into play. To understand the murky world of currency and credit swaps, let use baseball as an analogy.

So let’s say you’re Mark McGwire and you had a good roid run with your pal Jose Canseco, but Jose is gone and your supplier is as well. Your back is betraying you and you are missing more games than you’re playing. You hook up with your juice pimping bro and start the cycle all over again. You hoist and lift. The next thing you know, you’re jacking balls just as juiced out of parks at an eye popping rate. You find yourself in a race to break Roger Maris’ seasonal home run record with Sammy Sosa (hey where did Sammy get his juice?). By the end of the season, you’re the next Babe Ruth and Sammy is your Cantinflas. The rest of the league knows what you’ve been up and knows that if they want to compete, get big contracts, save their jobs, they gotta hit that juice as well. Barry Bonds, as fine a natural hitter as the game has ever seen (and a vain Leo at that) watched McGwire steal the spotlight and said, “damn!”

Barry got hooked up with Victor Conte, former bass player of “Tower Of Power.” Tower of Power? Can you believe that? You can’t make this stuff up. Anyway he was peddling roids to guys like Niner defensive tackle, Dana Stubblefield, who parlayed his performance into a NFL defensive player of the year award and a massive contract with The Redskins and sprinter, Tim Montgomery. The next thing you know, Barry is hitting home runs into McCovey Cove and going after both Maris AND Aaron. Even little guys like Marvin Benard got into the act, yanking 20+ jacks out of the yard and scoring a big contract as well.

You see, just playing well, executing, sound fundamentals, regular weight training, all that was not enough anymore. To compete, you had to stick a needle in your ass and pump up the volume.

Goldman Sachs are the Victor Conte of the global economy. If Italy is playing with currency swaps (and they were) and scoring big cash, then why not Spain, or Portugal or Greece? Once somebody crosses the line, that line will be crossed by everyone else, because if it isn’t, a dreadful panic that you’ll get left behind sets in.

So Greece took the plunge and started swapping. Here’s how it worked:

“Greece’s debt managers agreed a huge deal with the savvy bankers of US investment bank Goldman Sachs at the start of 2002. The deal involved so-called cross-currency swaps in which government debt issued in dollars and yen was swapped for euro debt for a certain period — to be exchanged back into the original currencies at a later date. Such transactions are part of normal government refinancing. Europe’s governments obtain funds from investors around the world by issuing bonds in yen, dollar or Swiss francs. But they need euros to pay their daily bills. Years later the bonds are repaid in the original foreign denominations. But in the Greek case the US bankers devised a special kind of swap with fictional exchange rates. That enabled Greece to receive a far higher sum than the actual euro market value of 10 billion dollars or yen. In that way Goldman Sachs secretly arranged additional credit of up to $1 billion for the Greeks.

This credit disguised as a swap didn’t show up in the Greek debt statistics. Eurostat’s reporting rules don’t comprehensively record transactions involving financial derivatives. “The Maastricht rules can be circumvented quite legally through swaps,” says a German derivatives dealer. At some point Greece will have to pay up for its swap transactions, and that will impact its deficit. The bond maturities range between 10 and 15 years. Goldman Sachs charged a hefty commission for the deal and sold the swaps on to a Greek bank in 2005.” (Spiegel Online)

The deficit between the fictional credit and the actual debt/currency, plus any accrued interest is completely radioactive to Greece now. For all intents and purposes, they are bankrupt. Apparently, Spain and Portugal are not far behind due to similar leveraging and now hemorrhaging.

What we’re seeing here is not dissimilar to what happened after “The Treaty Of Versailles” where crippling sanctions and reparations were foisted upon the German people at the end of WWI, which in essence bankrupted them and created the economic and social void, which led to the rise of The Third Reich. Here, we’re seeing something similar. The sanctions and debt regulation being imposed on the people of Greece are beyond the pale. They are being forced by The IMF in coercion with their so-called leadership to to take massive salary cuts and forego most, if not all of their pensions. They are ****** and they’ve only just begun to vent their anger.

What’s fascinating about watching these protests is the fierce, thrust and parry of the protestors front lines, brandishing small, red flags in the face of the riot police, who are no doubt just as annoyed as the protestors themselves, since they are having their salaries whacked as well. You can almost see the hesitancy in the approach of the riot police at times, not wanting to hit or hurt their fellow Grecians. It’s a fascinating war dance. But unfortunately, it will only get hotter. Three bank employees have died in the protests and as always, we need to be wary of agent provocateurs in any setting such as this.

All of this is leading up to the shift of Uranus in Pisces to Uranus in Aries. During the last days of Uranus in Pisces, we witnessed the explosion at sea of the TransOcean/BP rig in the Gulf of Mexico as well as the bursting of a central water main in Boston that threatened water supplies and safety in that city over the weekend. Just prior to a planetary shift, especially one as major as this, there seems to be a denouement to the activity of that particular alignment during the last days of a planet in a sign–the intensity gets dialed up.

And now the rioting, a presage to Uranus in Aries begins to foment.

If Greece falls, either through monetary failure or internal strife and prolonged disruption, then the next domino will begin to fall, since the global economy is trip-wired like a complex explosive, where one bang triggers the next and so on in a hyper-destructive-sequence, a chain reaction.

It’s a device that’s been set to go off and we’re now witnessing the first of many explosions.

When we look at mythology and astrology, we reference the Greeks and Romans at great length. While we call Mars, “Mars” the Roman god of war and Venus, “Venus” the Roman goddess of beauty, we assign Aries to Mars. Aries of course was Mars’ correlative in Greece. Aries is the first sign and initiates the wheel into action. Aries is “Greek.” Thus, as Uranus approaches Aries, it is little more than ironic that Greece is channeling the fury of this deity within it’s own borders. My guess is that what we will see is the ritual reenactment of each great civilization and their eventual fall through the oncoming economic crisis and the arrival of Uranus in Aries.

In The West, it started with the fall of Greece, then Rome, then the dark ages, then the rise of England and it’s eventual fall to the US (the public version), and ultimately the fall of The USA itself, the culmination of the last deadly charge on the global economic domino bomb. We’ll witness the reenactment of the fall of each great epoch in real time, drawing history as we know it to a close.

Ritual theater.

Riots, anarchy, the entire collapse of the world economy are all very, very, real possibilities. Amidst the chaos a void will arise, just like it did in Germany and of course it was the bankers and their outright betrayal of the German people at Versailles that Hitler seized as his lightning rod, the dual bolts of Sowelu, The SS. All of this . . . and I mean all of it, is some form of controlled chaos and it will be allowed to foment to the point where hopelessness and fear run rampant. In the void of natural order, something and quite possibly someone will emerge to “save us.” In Uranus in Aries, we will likely witness “The Age Of The False Savior,” entering onto the world stage, bringer of light to our darkest times. Together, The Ram and The Goat will reign supreme in the heavens. If that’s not a clear sign of what’s to come, I’m not sure what is.
http://www.robertphoenix.com/content/

(courtesy of VIG in astro2)


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katatonic
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posted May 07, 2010 06:31 PM     Click Here to See the Profile for katatonic     Edit/Delete Message
interestingly, jwhop, while your predictions of a move to the right LOOK like they came true in england yesterday, what may not be so obvious is that it is really just turn and turnabout once more. whoever was in power during this debacle was almost guaranteed to lose their seat, but not because they were socialists...in fact the BNP - about as right wing as they get in england - was OUSTED from the places where they were used to enjoying their warm chairs.

in other words, people don't give a rat's whether youre socialist or monarchist or "republican" for the most part. they just want things to get better and finger someone for the blame.

sooo cozy!

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jwhop
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posted May 07, 2010 09:31 PM     Click Here to See the Profile for jwhop     Edit/Delete Message
acoustic not sure who you are talking about but every President has talked about budget deficits and the national debt.

The problem is, none have actually done anything about them...including Republicans, for what ever reason.

Please don't bring up Clinton. Clinton was dragged to the signing table kicking and screeching when he signed legislation which balanced the budget...a few years after signing. It sure as hell wasn't his idea.

O'Bomber has elevated budget deficits to an art form.

With no intentions of preemption, I think you would agree...this cannot continue.

So katatonic, if I read you right; you believe one government is interchangeable with another and they're all the same under the skin, so to speak...and it's all theater for public consumption.

Regarding bankers:
Perhaps I should remind you that I would repeal the Federal Reserve Act of 1913, prosecute Federal Reserve bank Presidents and upper echelon executives...and those behind those Federal Reserve Banks with prosecutions which would mean that if they lived to be 1000 years old...they would still be in prison at the end of their lives.

I could get down with dissolving any consumer debt where the "proceeds" were created out of thin air. In other words, consumers were never loaned money but were loaned the bank's credit.

AD, God forbid anyone going hungry in America...and especially children. But, we need to get back to the basics of economics 101, get government out of the private sector, let private enterprise thrive and create the wealth which is now locked up in government intervention in free markets. There is no greater gift which can be given...on this earth... to individuals than an opportunity to stretch their wings and go as far as their dreams and hard work will carry them.

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katatonic
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posted May 07, 2010 09:56 PM     Click Here to See the Profile for katatonic     Edit/Delete Message
no, jwhop, i don't actually think they are interchangeable. i was commenting on the fact that most people really don't care HOW it's done as long as they have dinner on the table and a roof over it...plus a few amenities of course. and when things get rough they will vote for whoever they perceive as NOT having DONE IT to them.

what i meant was that pretty much every form of government ends up being hogged by a few people and those people repeat themselves over and over, the same families with a few exceptions have been consolidating their power since governments began. they don't care about socialism or capitalism but they manage to stay richer than anyone else in any market.

as to government hogging too much of the market, what of the banks that are basically making it clear they own the governments? the scenario in greece, which may soon affect most or all of europe, is not a pretty one.

while i deplore the stupidity of people who fall for these scams, and swaps and whatever else kind of trading on the margin has been going on, it is even more amazing that whole countries have allowed themselves to be sucked in - and maybe under - by them. and it is reprehensible that the perps are still, at this point getting away with it.

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jwhop
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posted May 07, 2010 10:35 PM     Click Here to See the Profile for jwhop     Edit/Delete Message
katatonic,

let me say this to you. In any nation with a representative form of government; the people are in charge...in reality.

If they permit their elected officials to sell them out to special interests, bankers, corporations, etc, then, the fault is theirs. There will always be the greedy, the unscrupulous, seeking to make a buck on the backs of the unwary and with the help of those who they have bought and paid for in government.

The ultimate power in the United States resides in the people...if they are wise enough to recognize that fact. There is no politician they cannot throw out of office. There is no corporation they cannot put out of business. There is no wrong they cannot right.

Thomas Jefferson said it best.

"I know no safe depositary of the ultimate powers of the society but the people themselves; and if we think them not enlightened enough to exercise their control with a wholesome discretion, the remedy is not to take it from them, but to inform their discretion by education. This is the true corrective of abuses of constitutional power." --Thomas Jefferson to W. Jarvis, 1820.

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AbsintheDragonfly
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posted May 08, 2010 12:14 AM     Click Here to See the Profile for AbsintheDragonfly     Edit/Delete Message
Ok so speaking of corporations.

Jwhop, what say you on the recent SCOTUS ruling about corporations and money in elections? And further back, the original ruling?

Doesn't that effectively take the power out of the hands of the People? There is no way, any one person, or the collective of people of this nation, can compete with a single corporation, is there?

------------------
We cannot seek or attain health, wealth, learning, justice or kindness in general. Action is always specific, concrete, individualized, unique. --Benjamin Jowett


It is in giving that we receive. --Saint Francis of Assisi

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katatonic
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posted May 08, 2010 12:34 AM     Click Here to See the Profile for katatonic     Edit/Delete Message
you're right about the power lying in the people. if the people use it. and if they're not duped by madison avenue and other means to the point they just don't know who's who or what's what.

where can you buy anything that doesn't ultimately come from one of a few corporations? who gets to make his own enterprise these days?

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jwhop
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posted May 10, 2010 10:27 AM     Click Here to See the Profile for jwhop     Edit/Delete Message
Hmmm, there are about 305,000,000 American citizens. Most of them can vote.

Corporations cannot vote and therefore...do not vote.

As for the recent Supreme Court Ruling: That merely corrected the McCain/Feingold law which violated the 1st Amendment free speech rights of Americans.

At least corporations pay taxes to the United States Federal government.

So, what do you think about all the 503 and 527 C3 tax exempt organizations...most of which are on the far left fringe, pay no taxes on their donated money and gave hundreds of millions of dollars to mostly leftist politicians for their elections or reelections?

At the same time, grass roots citizen organizations were prohibited from running any advertising which mentioned any politician's name within 60 days of an election.

When McCain/Feingold was passed, I called it the Congressional Incumbent Reelection Act.

I'm quite happy the US Supreme Court struck down the parts of McCain/Feingold which violated 1st Amendment rights of Americans.

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AbsintheDragonfly
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posted May 10, 2010 11:23 AM     Click Here to See the Profile for AbsintheDragonfly     Edit/Delete Message
My point was that they can spend more money than any one living person, and therefore do vote. I also know that most corporations try to pay as little in taxes as they can.

As far as the 503 organizations:

The most common types of non-profits seeking 501(c)(3) status include:

* Civil Leagues;
* Social Welfare Groups;
* Religious Organizations;
* Educational Institutions;
* Recreational Clubs;
* Chambers of Commerce and similar business organizations; and
* Certain Retirement Fund Associations, such as Teachers Retirement Fund Associations.

The 527's are another matter. I understand the point behind the organization, however, it seems like they are gaming the system. I did some quick research, and from the websites I found, it looks as if both libs and conservs are using these types of fundraising organizations.

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jwhop
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posted May 10, 2010 01:02 PM     Click Here to See the Profile for jwhop     Edit/Delete Message
Most of what Americans have heard about Citizens United vs FEC is sheer bloviation and BS. Especially what they've heard from O'Bomber and far left demoscats in Congress.

So, I thought it proper to flesh out what this decision by the Supreme Court does and does not do.

Incredibly, the US Federal government believed McCain/Feingold gave the government authority to ban books. That was the position Elena Kagan took in arguing the case for the government as Solicitor General of the United States.

Kagan is O'Bomber's choice to fill the vacant Supreme Court seat. She should be fillibustered by Republicans and Democrats alike. No one with views this radical should ever be placed on a Federal Court and most certainly not the United States Supreme Court.

The author is a former Chairman of the Federal Election Commission...Bradley A. Smith

Citizens United We Stand
By Bradley A. Smith from the May 2010 issue

March 24, 2009, was a turning point in the long-running battle to restrict political speech, aka "campaign finance reform." On that day, the Supreme Court heard oral argument in Citizens United v. Federal Election Commission, in which the conservative activist group Citizens United challenged the provisions of the McCain-Feingold law that had prohibited it from airing a documentary film, Hillary: The Movie, through video on demand within 30 days of any 2008 Democratic presidential primary.

In the course of the argument, Deputy Solicitor General Malcolm Stewart, an experienced Supreme Court litigator, argued that a 1990 precedent, Austin v. Michigan Chamber of Commerce, gave the government the power to limit any political communication funded by a corporation, even a nonprofit such as Citizens United. Justice Samuel Alito asked Stewart if that power would extend to censoring political books published by corporations. Stewart responded -- consistent with the government's position at all stages of the case -- that yes, it would. There was an audible hush -- if such a thing is possible -- in the court. Then Justice Alito, appearing to speak for the room, merely said, "I find that pretty incredible."

Incredible or not, that was, and had been for many years, the position of the U.S. government. But until that moment, it seemed to have never quite sunken in with the justices. Americans are willing to accept far more abridgements of free speech than we sometimes like to believe, but the idea of banning books strikes an emotional chord that something described simply as "prohibitions and limits on campaign spending" does not. Americans may not always live up to the Bill of Rights, but Americans do not ban books. A stunned Court eventually asked the parties to reargue the case, to consider whether Austin should be overruled.

On reargument last September, Solicitor General Elena Kagan tried to control the damage, arguing that the government never actually had tried to censor books, even as she reaffirmed its claimed authority to do just that. She also stated that "pamphlets," unlike books, were clearly fair game for government censorship. (Former Federal Election Commissioner Hans von Spakovsky has noted that in fact the FEC has conducted lengthy investigations into whether certain books violated campaign finance laws, though it has not yet held that a book publisher violated the law through publication. And the FEC has attempted to penalize publishers of magazines and financial newsletters, only to be frustrated by the courts.) With the endgame of "campaign finance reform" finally laid out plainly, the Supreme Court's decision seemed a foregone conclusion. Sure enough, in January, the Court ruled that corporations, as associations of natural persons, have a right to spend funds from their general treasuries to support or oppose political candidates and causes -- including through the publication or distribution of books and movies.

Though this ruling is obviously a correct interpretation of the First Amendment, reaction to the Court's decision in Citizens United has been loud, often disingenuous, and in some cases nearly hysterical. President Obama used his State of the Union address to publicly scold the Court, in the process so mischaracterizing the Court's decision that he prompted Justice Alito's now famous, spontaneous rejoinder, "Not true."

Meanwhile, Democrats in Congress and the states have been working overtime to come up with "fixes," ranging from the absurd (a Vermont legislator proposed forcing corporate sponsors to be identified every five seconds during any broadcast ad), to the merely pernicious (such as proposals that seek toimmobilize corporate speech by forcing corporations to hold a majority vote of shareholders before each and every expenditure). The fact that virtually all of these proposed "fixes" have been sponsored by Democrats, with the aim of silencing what they perceive to be the pro-Republican voices of the business community, merely illustrates once again the basic problem with campaign finance reform that Citizens United sought to alleviate: the desire to manipulate the law for partisan purposes.

CITIZENS UNITED IS AT ONCE both a potential game-changer and a decision whose "radicalism" has been wildly overstated. Why overstated? Well, to start, one would never guess from the left's hysteria that even prior to Citizens United, 28 states, representing roughly 60 percent of the U.S. population, already allowed corporations and unions to make expenditures promoting or opposing candidates for office in state elections; in 26 states, such corporate and union expenditures were unlimited. Moreover, while the first bans on corporate spending were enacted more than a century ago, prior to the 1990 Austin decision, the Supreme Court had never upheld a ban, or even a limitation, on independent expenditures supporting or opposing a political candidate. It was the misleading contention that the decision overturned "100 years of law and precedent," that appears to have evoked Justice Alito's "not true" response to the president's State of the Union comments.

The president also stated, again misleadingly, that the decision would open the door for foreign corporations to spend unlimited sums in American elections. In fact, another provision of federal law, not at issue in the case, already prohibits any foreign national, including foreign corporations, from spending money in any federal campaign. FEC regulations, which have the force of law, further prohibit any foreign national from playing any role in the political spending decisions of any U.S. corporation, political action committee, or association. And the Court specifically stated that Citizens United was not addressing these laws at all. So while some states may tweak their state rules in the wake of Citizens United to limit the ability of U.S. incorporated and head-quartered subsidiaries of foreign corporations to spend money in campaigns, the "foreign corporation" bogeyman is little more than leftist demagoguery.

What is much more alarming than the prospect of U.S. corporations with some foreign ownership participating in campaigns is the fact that the four most liberal justices on the Supreme Court would have upheld the Austin precedent, and with it the authority of the federal government to censor books and movies published, produced, or distributed by U.S. corporations. But by affirming the rights of citizens to speak out on political issues, even when organized through the corporate form, the Supreme Court quite rightly put political speech back at the core of the First Amendment.

After four decades in which the Court had given greater First Amendment protection to such activities as topless dancing, simulated child pornography, Internet porn, flag burning, and the transfer of stolen information than to political speech, Citizens United is a wonderful reaffirmation of the primacy of political speech in First Amendment jurisprudence. In that respect, the case has already been a constitutional game-changer. Future litigation is sure to follow, building on the success of Citizens United to free up the political system and strike down the still extensive web of regulation that envelops political speech.

Some of these challenges are already well under way. For example, under current federal law, an individual such as George Soros is free to spend $20 million to promote his favored candidates, but if two or more individuals get together to do the same thing, neither can contribute more than $5,000 to the effort. It is hard to see what anti-corruption purpose such a dichotomy serves, and in SpeechNow.org v. FEC, argued before the U.S. Court of Appeals for the District of Columbia Circuit in January, plaintiffs argue that if it is not corrupting for one person to spend unlimited sums on independent expenditures, it is not corrupting if two or more people combine their resources to promote the candidates of their choice. A decision is expected soon. Expect, too, legal challenges to the federal prohibition on contributions by corporations directly to candidates -- if a $2,300 contribution from a corporate CEO or PAC is not corrupting, it is hard to see how a $2,300 contribution directly from a corporate treasury is corrupting.

MUCH LESS CLEAR is whether Citizens United will be a game-changer in electoral politics. The general consensus is that Citizens United favors Republicans, based on the widely held perception that corporations are more likely to support Republicans than Democrats. But this perception may not be true. Even before Citizens United, the federal government and most states also allowed corporations to operate political action committees (PACs), which could then solicit the corporation's managers and shareholders for voluntary contributions to the PAC, which in turn could contribute limited amounts to candidates or make independent expenditures to support candidates. But whereas corporate PACs typically gave about two-thirds of their contributions to Republicans during the 1990s and the first part of the last decade, peaking in the 2004 cycle at nearly 10 to 1 for the GOP, over the past three years corporate PACs have devoted a slim majority of their contributions to Democrats.

More importantly, there is good reason to doubt that Fortune 500 companies are going to start making large expenditures in political campaigns. As noted, even before Citizens United, 28 states allowed corporate and union spending on state and local political races, yet large-scale corporate spending was very rare in those states. Another sign that corporations are not eager to jump headfirst into political spending comes from the relatively low level of activity by corporate PACs. Among the Fortune 500 -- huge corporations that are all heavily regulated by the government -- only about 60 percent actually maintained PACs.

These PACs are subject to extensive regulation, which runs up operating costs to the point that the operating costs of PACs often total more than half of their total revenue. Corporations can, however, pay these operating costs directly from their corporate treasuries. Yet roughly half of these PACs' operating expenses were paid not by the corporations that established them, but out of funds donated to the PACs. In other words, even before Citizens United, corporate America could have roughly doubled the amount of money available in their PACs to use for political expenditures simply by paying the administrative and legal costs of operating the PAC from their general treasuries. Yet they did not. And only about 10 percent of PACs contributed the maximum legal amount in any election. All this suggests a lack of interest in political participation.

The truth is, the Fortune 500 prefer lobbying to campaigning. Even prior to McCain-Feingold, when corporations could support parties with "soft money," the Fortune 500 spent roughly 10 times as much money on lobbying as on political expenditures. As Edward Kangas, former chairman of Deloitte Touche Tohmatsu and of the Committee for Economic Development, said in the New York Times, explaining his support for McCain-Feingold, "We have lobbyists."

But if large corporations may be reluctant to spend on political races, Big Labor is not. Labor unions also benefit from the Citizens United decision, and have historically been much more partisan in their political activity than has big business. The relatively small number of unions makes it easier for them to coordinate their activity. Add in the lack of any need to avoid offending a portion of their customer base, and unions are well positioned to take advantage of Citizens United. Indeed, within weeks of the Citizens United decision, three unions pledged to spend $1 million each to try to defeat U.S. senator Blanche Lincoln in the Democratic primary in Arkansas, finding her insufficiently dedicated to Big Labor's agenda.

THUS, IF CITIZENS UNITED ultimately works to favor conservatives, it may be less due to the Fortune 500 than to the small business community. These small and mid-sized companies usually cannot afford the high administrative costs of maintaining a PAC, and often don't have enough employees eligible for solicitation to make forming a PAC worthwhile in any case. Moreover, unlike Fortune 500 companies, small businesses typically do not maintain permanent large lobbying operations in Washington, and because they are less likely to be heavily regulated or engaged in government contracting, their contact with Washington is likely to be more sporadic. For these companies, the ability to speak directly to the public is potentially a great benefit.

This small business community is generally much more conservative in its politics than is the Fortune 500, and in particular much more hostile to government regulation. But these small companies are unlikely to undertake major campaigns on their own. Thus it may be up to trade associations and business groups, such as chambers of commerce, to organize business efforts.

Meanwhile, managers and executives, particularly of large, publicly traded companies, will need to do some serious rethinking about their obligations to shareholders. Do they have an obligation to their shareholders to try to maximize long-term value by opposing tax and spend, pro-regulatory politicians, and working to elect officials who appreciate pro-growth policies? Or do they play it safe, avoid political activity, and hope that the regulators will eat them last? The decisions they make may ultimately determine the real importance of Citizens United.
http://spectator.org/archives/2010/05/07/citizens-united-we-stand/

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