Citizens United Constitutional Amendment – Open Letter

Citizens United Amendment, An Open Letter to CongressMemorandum

To:

Speaker of the United States House of Representatives John Boehner

Minority Leader of the United States House of Representative Nancy Pelosi

United States Senate Majority Leader Harry Reid (Current)

United States Senate Minority Leader Mitch McConnell (Current)

Subject:

Legislation to Create a Constitutional Amendment to Address the Supreme Court Ruling in Citizens United vs. Federal Elections Committee (FEC)

Introduction

The purpose of this open memorandum is to give the addressed audience the background behind one of the Supreme Court’s most critical rulings in determining how political speech can and will be voiced in the United States, as well who will be afforded this microphone for such speech. It is important to know background behind the legislation that was created that led to this decision, the fallout in terms of the tremendous influx and rise of corporate and individual contributions to super PACs and the infinite rise of dark contributions that are without disclosure, identity, or known motive to become prevalent in today’s political marketplace.

The Supreme Court has afforded individual rights to corporations throughout its existence but it, nor the legislative branch of the Unites States government have taken steps to clearly outline and define legal rights that should be afforded to corporations and which rights are exclusively endowed to actual human citizens. A constitutional amendment is the most clear path to defining and finally making a clear distinction and protect the liberties of citizens by provide corporations with adequate legal recognition and protection. A constitutional amendment is not an act of small proportions and will take both sides of the isle to find common ground in order to find a solution to the removes the court’s interpretation of whom and what are covered under specific amendments. Though it will be tough, it is vital to the preservation of the individual citizen to make such distinctions and definitions clear and a permanent within the United States Constitution.

Background in Citizens United vs. Federal Elections Committee

Citizens United Constitutional Amendment Open Letter to CongressIn 2002 the Bipartisan Campaign Reform Act (BCRA) also known as the McCain Feingold Campaign Reform Act was signed into law by then President George W. Bush (BCRA, n.d.). The purpose of the bipartisan legislation was to address campaign financing in five main areas: soft money contributions and regulations, reform of electioneering communication from non-candidate organizations and individuals, the prohibiting of corporations and labor unions from using funds from their general treasuries to fund electioneering communications, the placement of an exemption for nonprofit organizations was implemented to allow these groups to use general treasuries to fund electioneering communications, and the final major subject addressed in the legislation is the placement of coordination restrictions and disclosure policies for advertising (BCRA, n.d.). The law almost immediately saw legal challenges spear headed by Senator Mitch McConnell and the National Rifle Association (NRA) whom both challenged the constitutionality of the legislation and ultimately the Supreme Court heard several challenges directed at specific sections of the act shortly after the bill became law and in all instances affirmed the legislation or pushed the argument back to be argued once the law is applied (BCRA, n.d).

Citizens United is nonprofit corporation that states is “dedicated to educating the American public about their rights and the government” and in the 2008 presidential election cycle produced a expressively conservative political ninety minute movie that attacked then Senator Hillary Clinton whom was running for the Democratic presidential nomination (Citizens United v. Federal Election Commission (Docket No. 08-205), 2009). As noted in the BCRA a ban on direct financing of electioneering communications and also required that such advertising have disclaimer and disclosure information provided to identify where the money for the advertising came from (Citizens United v. Federal Election Commission (Docket No. 08-205), 2009).  Citizens United sought to have these provisions of the BCRA challenge and on March 24, 2009 the Supreme Court heard oral arguments challenging the BCRA and the court was faced then with four overarching questions in their decision: should electioneering communication as defined and restrictions imposed in the BCRA be upheld, are the disclosure requirements within the BCRA “overly burdensome and fail a strict scrutiny test as-applied to The Movie”, determination if The Movie fell into the category of a “clear plea for action to vote”, and whether or not The Movie was considered an advertisement which then would make it subject to regulations within the BCRA(Citizens United v. Federal Election Commission (Docket No. 08-205), 2009).

In January 2010, the Supreme Court ruled that “the government may not ban political spending by corporations in candidate elections” (Liptak, 2010). The court was split five to four in their ruling with the majority stating that the government cannot and should not be permitted to limit political speech while the decent stated that this ruling will lead to the money pouring into political advertising and will ultimately undermine democracy in the United States (Liptak, 2010). This ruling not only struck down the key provisions within the BCRA (that had already been ruled and upheld by the court in 2003) it was constitutional to place restrictions on corporate and union spending for political advertising and also overruled a 1990 Supreme Court decisions that had found it constitutional to implementation restrictions on corporate spending in political campaigns (Liptak, 2010). Writing for the majority Justice Kennedy “When government seeks to use its full power, including the criminal law, to command where a person may get his or her information or what distrusted source he or she may not hear, it uses censorship to control thought […] This is unlawful. The First Amendment confirms the freedom to think for ourselves” (Liptak, 2010). The court in the majority decision also gave a more subtle indication within their ruling that “independent contributions could not corrupt (Hasen, 2012). In part of a twenty minute decent from the bench Justice John Paul Stevens stated “the majority had committed a grave error in treating corporate speech the same as that of human beings” (Liptak, 2010). The ruling fell across political lines with the five conservative justices backing Citizens United and the liberal justices descending leaving a huge loophole for political spending poured into the political spectrum and having a congress as divided as the courts resolution progress on creating a resolution to the action taken by the court seems unlikely.

Citizens United Ruling and the Rise of the Super PAC

Though in the 1976 Supreme Court ruling, the justices ruled that an individual could spend unlimited amounts of money to advertise for or against candidates, this money had to be used by the individual and could not be given to a political action committee or PAC (Hasen, 2012). Since the individuals would have to declare in the advertising that they had paid for it, few individuals chose to make individually funded advertising even though it was ruled to be legal (Hasen, 2012). Prior to the Citizens United ruling PACs had been limited to five thousand dollars in individual contributions and corporations and unions were forbidden from making any contributions to these groups (Hasen, 2012). Following the Citizens United ruling the 527 groups (named for the section of nonprofit tax standing under the U.S. Internal Revenue Code they fall under) claimed they could take unlimited funds from not only individuals but also corporations and unions as they were not considered PACs under the FEC’s definition of PACs and led to the rise of the super PAC that can raise and spend unlimited amounts of money (Hasen, 2012).

Looking only at presidential elections since BCRA was enacted, so called super PACs had the following spending activities : 2004 – $14,193,530 / 2008: $37,509,249 / and following the Citizens United decision in 2010 the 2012 spending jumped to over a billion dollars with $308.7 million having no disclosure at all (Hasen, 2012) (Outside Spending, n.d.). In looking at this current year’s midterm election super PAC, 527 and 501C spending based on FEC daily updates through November 16, 2014 nearly five-hundred and sixty million dollars with only three-hundred and forty million having full disclosure, it should also be noted that the super PAC is by far and away the largest receiver of dollars and spending on electioneering communications (Outside Spending, n.d.). This kind of expansion of corporate personhood affording free speech to such entities only act to mute the individual voice that the First Amendment was designed to protect, not to mention the corruption that can only follow such unbridled spending.

Corporate Citizenship in the United States Supreme Court

Citizens United Supreme CourtSince the inception of the United States there have been at least nine Supreme Court decisions beyond the Citizens United case that have weighed in to classify companies and corporations individuals in the eyes of the law. The first rights to be decided by the court revolved around the citizen classification and jurisdictional questions. In 1809 in the Bank of the United States vs. Deveaux as federal and state jurisdictions were still being established, the defendant argued that since corporations are not people, they could not bring a case to federal court and the court agreed meaning that corporations could only have legal standing in federal courts if all shareholders or at least one of the opposing party lived in the same state (Park, 2014). In 1844, it had become apparent that the 1809 ruling had put corporations primarily out of reach of the federal court system and ruled in Louisville, Cincinnati, and Charleston Railroad vs. Letson that “corporations were “citizens” of the states where they incorporated” (Park, 2014). Marshall vs. Baltimore and Ohio Railroad in the Supreme Court’s 1853 ruling further defined the corporations as citizens as applied to jurisdiction of the courts and outlined that corporations did not enjoy the same constitutional rights as real people thus making shareholders to be considered citizens of the companies home state making it easier for federal court proceedings to be brought by and against corporations (Park, 2014).

Following the United States Civil War and the enactment of the Fourteenth Amendment the Southern Pacific Railroad in County of Santa Clara vs. Southern Pacific Railroad stated that as corporations are citizens it was illegal for the county to enact a tax specific to the railroad (Park, 2014). Though the court never eluded to the railroad being protected by the Fourteenth Amendment, the court reporter did include in the published notes of the ruling that the rights afforded under the Fourteenth Amendment and this adage would be used later citing this case as grounds to uphold corporate protection under the Fourteenth Amendment in 1898’s Smyth vs. Ames decision which protected corporations from property seizure without due process (Park, 2014). Hale vs. Henkel in 1906 continued to uphold a corporation’s protection under the Fourteenth Amendment but drew a distinction that companies were not protected from self-incrimination afforded under the Fifth Amendment (Park, 2014).

The distinction in regards to the Fifth Amendment was then back tracked in the Russian Volunteer Fleet vs. United States stating that foreign corporations are also protected from illegal government seizure and had an equal right fair treatment in the legal system (Park, 2014). In 1977 the right to shield a corporations from double jeopardy was also upheld in United States vs. Martin Linen Supply Company (Park, 2014). Finally in 2012, the Supreme Court ruled in Burwell vs. Hobby Lobby that corporations are also legally protected by the First Amendment’s freedom of religion (Park, 2014). Reviewing the consistent rulings of the court it has been made clear that corporations have been afforded rights traditionally viewed as individual citizen rights under the constitutions the blurring of a reality what are actual individual rights for a physical individual to poses and which are the rights afforded to both individuals and corporations as a pseudo citizen.

Constitutional Amendment

It is clear that a corporation, though founded by individuals with shareholders whom are also people, in everyday life no one would mistake a corporation for an actual living breathing human being. It can be seen why the courts have been put into the position of needing to adapt certain provisions of the constitution to adequately protect and litigate corporations but the time has come to clearly define the limitations of the corporations protections afforded by the constitution and limit the influence and power that such organizations can wheeled within the United States political system, especially if the corporation is looking for anonymity from the scrutiny of disclosure. It is the responsibility of the legislative branch of the United States government to look at over two centuries of court rulings that have gradually created the corporate citizen and the ambiguity that that has fashioned to know that it is time for action that is much less open to interpretation.

Such a movement to create the Twenty-eighth Amendment due to the process of a constitutional amendment will require that it be designed to show the benefit for corporations, the individual citizen, as well move above political partisanship that has created gridlock and division not only in Washington D.C. but across towns, families, and states over the past several decades. Compromise and partnership were the cornerstones of what this democracy were built on and must be rekindled in order to save the union from its own apathy in the face of critical problems.  A bipartisan recognition of the problem that exist needs to be made as a first step, though the reasons for such an identification do not need to be the same, the recognition of a problem must be a vital step in creating an understanding.

The writing of the legislation must also take bipartisan roots and impute should be actively solicited through congressional hearing from civil liberties organizations, as well, from corporate leadership and organization. By using congressional hearing as an avenue to create transparency around the process, any lobbyist for or against such an amendment should also be given the opportunity to present their case under oath in congressional hearings. Though there is no way legally to stop lobbyists from inserting pressure from their backers it would be admirable for all members of congress to take a pledge to only take official testimony from lobbyists if only on this one issue. By doing this the air of unofficial influence can be remediated in the process and deciding factors within the legislation can have known origins.

It would be best to use the tradition of starting a constitutional by providing a two thirds majority in both the United States House and Senate and then look to two thirds of the states for ratification. But if the gridlock that has prevented major legislation from moving through both chambers of congress cannot be overcome and in a time of instant information sharing and given the critical nature of this legislation, citizens should coordinate and call on their state legislatures to act in calling a constitutional convention which can be demanded with such passage by two thirds of the states in the union (Constitutional Amendment Process, n.d.). This subject has the potential to unify America in the address a problem that has been growing through the existence of the country and must be dealt with from the legislatures within this country instead of deferral to the courts whom are not elected or accountable to a constituency.

References

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In Debt or Indentured Part Nine: All the Issues

People Politico In Debt or Indentured: All the IssuesThis is the ninth part of a multiple part series taking a deep dive into our current political and economic crisis in America. Partisan politics, unfettered corporate spending and recklessness along with a shift in our social acceptance of debt, is having far reaching and potentially devastating affects on our way of life, on the American Dream. With each installment we will take a closer look at some of the major pieces of this very complex puzzle and try to understand them and bring them into perspective. Use this opportunity to take a broader look on the political and social economic state of America and how each of us, as a small pieces of the puzzle, can make a difference.

In Debt or Indentured: All the Issues

With all of these issues hitting the American middle class, it can be easily seen how people can become distracted from looking at the big picture since the picture becomes so blurred through media and politics. There is also the amount of work Americans do, they are left with little time to invest in looking into the politicians that they elect. President George W. Bush said to a divorced mother of three in Omaha on February 4, 2005 “You work three jobs?  … Uniquely American, isn’t it? I mean, that is fantastic that you’re doing that”. This should not be uniquely American to expect people to work three jobs and still barely get by. Not to mention, how much money does this struggling woman have to pay out of her three jobs to have her children looked after so she can work more? This is also an example of how politicians on both sides of the aisle think that Americans hard work is endless, yet the middle class does not demand change.

Is it audacious to think that the America middle class would demand remotely close the subsidies and tax breaks that industries and the wealthy receive currently from the government or be bailout by the government in the middle class’ time of need? The American middle class worker barely has time to demand more than a thirty second sound-bite from the politician that they will vote for…if they vote at all. A tactical attempt has been made by those in the echelons power within the United States to divide the middle class and ensure that they are more focused on surviving day to day, paying their debt, and living in fear than being able to see through the smoke filled barrage of sound clips and view the entire picture. Not able to see or feel powerless to change a government that is not serving them. The American middle class must find the time to challenge the status quo and demand tangible changes that would directly better middle class families’ everyday lives. To this point, instead of looking at the turmoil that middle class is experiencing, the American middle class is told they should not look for handouts from the government and they should take pride in pulling themselves up by their bootstraps (even though the entire financial system was bailed out to the tune of over a trillion dollars). The middle class instead is encouraged to spend more, even if that means going further into debt. An example of this was reported by Time Magazine’s Justin Fox (Editorial director of Harvard Business Review Group and author) in 2009 about statements made by then President George W. Bush directly following the September 11, 2001 terrorist attacks where President Bush stated, “Take your families and enjoy life, the way you want to be enjoyed.” Fox goes on to quote Boston University Historian Andrew Bacevich in his conclusion that “Bush seems to have calculated – cynically but correctly – that prolonging the credit fueled consumer binge could help keep complaints about his performance as Commander in Chief from becoming more than a nuisance.” Politicians, Democrat and Republican, will put their own aspirations ahead of those of the country unless a conscious society, predominately made up of the middle class as the majority within America, is willing to hold them accountable for their actions and words.

Common ground must be found by all American middle class indentured servants in order to free themselves from the this unjust system that has been built to keep the middle class in perpetual debt and fear. The American middle class must put partisanship aside in a time when it has been developed to a fever pitch. Democrats and Republicans cannot look in hate towards their fellow middle class worker trying to survive just as they are. It is time to rise up and demand a change within this country, a time to retire the debt that has burdened on their backs and buried a generation. If common ground cannot be found in the form of the self preservation of the middle class and the redefining of what the American Dream consists of, there may be no hope for this experiment with a middle class in America. But if common can be found and the political muscle of the American middle class can be flexed politically to demand changes that will help them directly in the form of debt relief, tax relief, living wages, educational equality and affordability, common belief that health is a right and not a privilege, and that fear can no longer be a tool used to control the middle class. If this type of unity can be found and the political will demonstrated by the middle class, there can be a redistribution of power in this country and the United States of America will return to a nation governed for the people by the people.

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In Debt or Indentured Part Eight: Single Issue Voting

People Politico In Debt or Indentured Single Issue VotingThis is the eighth part of a multiple part series taking a deep dive into our current political and economic crisis in America. Partisan politics, unfettered corporate spending and recklessness along with a shift in our social acceptance of debt, is having far reaching and potentially devastating affects on our way of life, on the American Dream. With each installment we will take a closer look at some of the major pieces of this very complex puzzle and try to understand them and bring them into perspective. Use this opportunity to take a broader look on the political and social economic state of America and how each of us, as a small pieces of the puzzle, can make a difference.

In Debt or Indentured: Single Issue Voting

Another reason that the middle class has not unified to demand change from the government and subsequently their employers is that the American middle class has allowed their voices to be divided on the basis of single issues. These types of social issues have dominated American politics starting in the 1980’s with efforts to mitigate the effects of the 1973 Roe v. Wade Supreme Court decision that legalized abortion in America. The two major American political parties took strong positions supporting and denouncing legalized abortion in America. Through time there have been litanies of new social issues that have been added to the table to assist in dividing the middle class vote and creating a new type of voter. This new voter will vote on a single issue instead of demanding platforms that address their own personal issues that are affecting their everyday life instead of one single issue that the my only care about because of religious or personal convictions. Some of the issues that currently stifle America middle class voices are: abortion, stem cell research, gay marriage, euthanasia, gun control, and illegal immigration. The interesting thing about single issues or wedge issues is that when either party is in control of congress and The White House, little to nothing is done to change the issue. On the face it appears that there is a lack of political will to tackle such monumental social issues, but politicians on both sides ran with those issues central to their platforms.

There are many example of the bait-and-switch of wedge issues by both Democrats and Republicans. One for the Republican’s took place while controlling all of congress and The White House from 2003 through 2007. Almost every elected Republican took a stance in their run for office to work towards the limitation of abortion. Yet during this time period of Republican control, little to nothing was changed to limit abortion in America. This was done even though this wedge issue was used by most Republicans to motivate voters that saw this as a single issue to vote for. The Democrats did the same thing with stem cell research and gay marriage when controlling congress and the presidency from 2009 to 2011. This is sometimes referred to in political communities as pandering to the base or telling the base of the party what they want to hear. Once elected these politicians do not make it a priority to do anything about the issue until close to another election. This maneuver ensures a constant block of voters (mostly middle class) that will come out to vote for their party because the voter cares about this sole issue. This was seen with gay marriage and abortion in the U.S. Presidential Election of 2004 between then President George W. Bush and Senator John Kerry and again in the 2008 election between Senator John McCain and Senator Barack Obama. Even now in the run-up to the 2012 Presidential Elections, the sound of pandering to single issue voters are being displayed by both Former-Governor Romney and President Obama.

Middle Class Divided

The division of the American middle class is important to both major political parties which have unlimited funds now available to them through the Supreme Court ruling in the Citizens United v. Federal Election Commission that classes corporations as individuals protected by freedom of speech through the form of political contributions to individual candidates as protected speech, this reported by Adam Liptak for the New York Times in his article titled, “Justices, 5-4, Reject Corporate Spending Limit.” This decision now entitles corporations to spend as much as they like on political contributions to individual candidates (Liptak).  The dissenting Supreme Court justices warn, “allowing corporate money to flood the political marketplace would corrupt democracy” (Liptak). This ruling allows corporations to act as individuals in order further influence elections through money. All though as a corporation it will not be able to vote in that very same election since it is not a person or a citizen.

That’s it for this part of In Debt or Indentured. We hope that this has given you some important things to think about. Use some of what you have learned here to look beyond the mere message our politicians are presenting to what the ramifications of these actions has on all of us Americans. Our country started down a slippery slope over a decade ago. We seemed to have stopped the free fall it had become, but do not fool yourself. We are still on the precipice of another long fall. Let’s just hope we all can learn, and grow, from the last spill we took.

Check back soon for the next installment of In Debt or Indentured.

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In Debt or Indentured Part Seven: The Power of the Middle Class

People Politico In Debt or Indentured: The Power of the Middle ClassThis is the seventh part of a multiple part series taking a deep dive into our current political and economic crisis in America. Partisan politics, unfettered corporate spending and recklessness along with a shift in our social acceptance of debt, is having far reaching and potentially devastating affects on our way of life, on the American Dream. With each installment we will take a closer look at some of the major pieces of this very complex puzzle and try to understand them and bring them into perspective. Use this opportunity to take a broader look on the political and social economic state of America and how each of us, as a small pieces of the puzzle, can make a difference.

In Debt or Indentured: The Power of the Middle Class

The indentured middle class could look to the strong and cohesive group of Americans that have been able to establish Social Security as the third rail of American politics. Both Republicans and Democrats refuse to substantially change this very popular program for seniors since they have come together and will punish a politician of either party if they work against this program. This power comes through seniors vote in large numbers and they ensure that their representation understands that Social Security and Medicaid are widely popular programs for them and it should not be tampered with. But after elections, these same seniors stay involved by reaching out and reminding their representatives how important this is to them. In 2008’s presidential election, the forty-five to sixty-five year old voting block voted at a rate of sixty-nine percent. Voters aged eighteen to twenty-four year olds were now at only forty-nine percent as reported by Thom File and Sarah Crissey in a U.S. Department of Commerce Economics and Statistics Administration and U.S. Census Bureau report titled “Voting and Registration in the Election of November 2008.” It can stand to reason that politicians are not as concerned with the cost of higher education and the cost being incurred by young Americans that do not vote in the same numbers as seniors and will not hound them after the elections to help them. Since young people and many middle class voters do not invest the time to demand a change in their government, their government does not take time to look out for their interest either.

That’s it for this part of In Debt or Indentured. We hope that this has given you some important things to think about. Use some of what you have learned here to look beyond the mere message our politicians are presenting to what the ramifications of these actions has on all of us Americans. Our country started down a slippery slope over a decade ago. We seemed to have stopped the free fall it had become, but do not fool yourself. We are still on the precipice of another long fall. Let’s just hope we all can learn, and grow, from the last spill we took.

Check back soon for the next installment of In Debt or Indentured.

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In Debt or Indentured Part Six: The Middle Class

People Politico In Debt Or Indentured: The Middle ClassThis is the sixth part of a multiple part series taking a deep dive into our current political and economic crisis in America. Partisan politics, unfettered corporate spending and recklessness along with a shift in our social acceptance of debt, is having far reaching and potentially devastating affects on our way of life, on the American Dream. With each installment we will take a closer look at some of the major pieces of this very complex puzzle and try to understand them and bring them into perspective. Use this opportunity to take a broader look on the political and social economic state of America and how each of us, as a small pieces of the puzzle, can make a difference.

In Debt or Indentured: The Middle Class

The American middle class has evolved from a powerful voting block with a determination to succeed, advance their prosperity, and their posterity; into a class of Americans controlled by debt. Debt and fear has become the reasons middle class Americans continue to stay in dead end jobs, constantly going to work hoping that they can keep their job for another day. They will lose everything if they cannot keep their job. Worse yet, there are hundreds of thousands of Americans that will continue to work in a job because of their health and without their job, they will lose their health insurance and again will lose everything. The American middle class has allowed themselves to slip into a state of indentured servitude where they have become subservient and endowed to the corporations wielding the power in the United States.

Indentured servants are not a new idea in America as they were the forerunners of slavery in the South where the few possessed the majority of the wealth and land. These English land owners needed workers to cultivate the cash crop tobacco. England had a large population of poor living in filthy conditions on the streets in almost every city. The British government worked with the American colonist landowners to create incentives for people to have their travel paid for, room and board cared for upon their arrival in America, and all in exchange for working off the debt that was accumulated through manual labor on plantations. This was the start of an American dream. During this time period, there was very little land that could be acquired in England. If the indentured servants were able to repay their debt through their labor, the English government declared that they would be rewarded with land in the Americas. Thousands of English and Scots signed-up for the opportunity. Very few, however, were able to complete their servitude, with landowners changing contracts to ensure that the debt could never be repaid. The outbreaks of disease also added to their debt as payment was needed for medication or doctors to help them. The indenture servants were also working to gain land, which as a land owner entitled them to vote and be involved politically. For the few that were fortunate enough to survive through their servitude and looked to be a landowner, the English government decided that this land was proving valuable and declared that they could not give the land to the mere servants. This lead to an indentured servant revolt that was successful enough to take control of the Carolina Colony governor’s residences. This victory was short lived and afterwards the plantation owners began to look for workers at they could hold with even less rights…slaves.

The American middle class carries many similarities with the indentured servants of colonial America. The American middle class is in a state of indentured servitude where they cannot escape from the debt that they have acquired. Just like their forefathers and foremothers who came as indentured servants to this country to follow their American Dream, this generation of middle class Americans are being required to work under fewer and fewer protections both from their employer and government. As well, this class of American indentured servants is without a voice in their government. Though the American middle class has the right to vote, it is not used to its potential to radically demand change. The middle class does not seem to carry the will to sustain pressure on their representative to work help workers in taking on the behemoths of society. The rules continue to change in favor of big business and the indentured servants’ voice is stymied again. The American middle class has developed laryngitis and has lost its voice in demanding social change.

That’s it for this part of In Debt or Indentured. We hope that this has given you some important things to think about. Use some of what you have learned here to look beyond the mere message our politicians are presenting to what the ramifications of these actions has on all of us Americans. Our country started down a slippery slope over a decade ago. We seemed to have stopped the free fall it had become, but do not fool yourself. We are still on the precipice of another long fall. Let’s just hope we all can learn, and grow, from the last spill we took.

Check back soon for the next installment of In Debt or Indentured.

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In Debt or Indentured Part Five: Mortgaging The American Dream

People Politico In Debt Or Indentured Mortgaging The American DreamThis is the fifth part of a multiple part series taking a deep dive into our current political and economic crisis in America. Partisan politics, unfettered corporate spending and recklessness along with a shift in our social acceptance of debt, is having far reaching and potentially devastating affects on our way of life, on the American Dream. With each installment we will take a closer look at some of the major pieces of this very complex puzzle and try to understand them and bring them into perspective. Use this opportunity to take a broader look on the political and social economic state of America and how each of us, as a small pieces of the puzzle, can make a difference.

In Debt or Indentured: Mortgaging The American Dream

The American middle class has been sold an American Dream built on a foundation of debt, that encourages more debt, looks to remove the negative stigma of debt, so more and more Americans will be lolled into its promises of have it now and paying later. Unfortunately, the pay later has emerged through time to mean pay, continue to pay, and acquire more debt while paying more towards the debt already acquired. This in turn has created a middle class caught in a revolving circle that requires to constant income to support their debt and to have further credit they must also have constant income. This on its face value does not sound outrageous, but there is another factor that has become the key ingredient in transforming this seemingly symbiotic relationship the middle class has developed with debt. This ingredient has transformed the middle classes relationship with debt into a parasitic one. That key ingredient is fear. Fear of being jobless. Fear of being without health insurance. Fear of being unable to pay the debts. Fear of for the children’s future. Fear of not being able to keep up with the Jones’s.

Throughout the 1980s through the 2000’s the policy of Trickle Down Economics yielded no improvement for the American’s working class but it saw the richest Americans take much more of the slice of American wealth. The argument for lowered taxes on the top 1% is that this will lead to job creation through investment but the data does not support this. Professor of Psychology and Sociology at the University of California Santa Cruz G. William Domhoff explains in his article “Who Rules America: Wealth, Income, and Power.” Domhoff contends, “In the United States, wealth is highly concentrated in a relatively few hands.” In America today only fifteen percent of the country’s wealth is held by bottom eighty percent of workers (Domhoff). What is even more surprising is how few Americans seem to understand that there is a consolidation of wealth in America. Domhoff describes a Norton & Ariely 2010 study that ask over fifty-five hundred people to describe what they to be “the ideal wealth distribution” and a large consensus described a distribution “which the top 20% owned between 30 and 40 percent of the privately held wealth,” this being well outside of “the 85 percent that the top 20% actually own.” Domhoff continues the misconception of wealth distribution by surmising that those surveyed also believe “the bottom 40% — that’s 120 million Americans — should have between 25% and 30%” of the wealth ideally but believed that this bottom forty percent have “8% to 10%” which is “far above the 0.3% they actually had.” The information in this survey demonstrates how Americans have established an idea of how wealth is held in America but this idea is not reflected in the reality of power and wealth in America.

That’s it for this part of In Debt or Indentured. We hope that this has given you some important things to think about. Use some of what you have learned here to look beyond the mere message our politicians are presenting to what the ramifications of these actions has on all of us Americans. Our country started down a slippery slope over a decade ago. We seemed to have stopped the free fall it had become, but do not fool yourself. We are still on the precipice of another long fall. Let’s just hope we all can learn, and grow, from the last spill we took.

Check back soon for the next installment of In Debt or Indentured.

 

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In Debt or Indentured Part Four: Work Force

People Politico In Debt or Indentured: Work ForceThis is the forth part of a multiple part series taking a deep dive into our current political and economic crisis in America. Partisan politics, unfettered corporate spending and recklessness along with a shift in our social acceptance of debt, is having far reaching and potentially devastating affects on our way of life, on the American Dream. With each installment we will take a closer look at some of the major pieces of this very complex puzzle and try to understand them and bring them into perspective. Use this opportunity to take a broader look on the political and social economic state of America and how each of us, as a small pieces of the puzzle, can make a difference.

In Debt or Indentured: Work Force

The American middle class is facing this mountain of debt now with stagnant wages that have seen little to no increase in salary compared to the drastic increase in productivity. Frank Levy (professor of Urban Economics in the Massachusetts Institute of Technology Department of Urban Studies and Planning) and Tom Kochan (Professor of Management at MIT’s Sloan School of Management and Co-Director of both the MIT Workplace Center) in partnership with the Employment Policy Research Network (group of 150 academic researchers from more than 50 universities in the United States, Canada and the United Kingdom) published a comprehensive look at the American middle class and how the effects of stagnation are impacting the middle class worker. Levy and Kochan clearly make the connection between the middle class’s labor, wages, and belief in the American Dream when they summarize the current state of business as “The broken connection between labor and productivity growth and compensation growth for average workers has undermined mass upward mobility and the ideal of a growing middle class.”In short, American workers are being asked to do more work for the same pay and expect to continue to grow financially within society. All three of the ideals cannot exist at the same time. Levy and Kochan describe the evolution of large American corporations as “increasing their economic power and political influence” through and after the 1970s. Levy and Kochan state that these changes in business practice and ideology have lead to:

[S]ubstantial legislative changes that deregulated major industries, liberalized banking rules, undercut labor-law enforcement and reform, prevented increases in the federal minimum wage, and fostered an ideology of free-market liberalism and the ‘maximization of shareholder value’ at the expense of other stakeholders. (p.4)

This has lead to a laissez-faire business environment that encourages corporate profits over anything else, including taking care of their employees, not just their executives. If the company can get more productivity out of less people…it will. If the organizations can require longer hours with no additional pay (salaried employees or moving to have a part time workforce)…it will. If a corporation can frighten and intimidate their employees out of collective bargaining…it definitely will. The strange thing about this radical movement by corporations is that it has been supported through legislation from the government and American middle class is still supportive in large numbers towards decreasing regulation for corporations favoring a belief in pure capitalism.

That’s it for this part of In Debt or Indentured. We hope that this has given you some important things to think about. Use some of what you have learned here to look beyond the mere message our politicians are presenting to what the ramifications of these actions has on all of us Americans. Our country started down a slippery slope over a decade ago. We seemed to have stopped the free fall it had become, but do not fool yourself. We are still on the precipice of another long fall. Let’s just hope we all can learn, and grow, from the last spill we took.

Check back soon for the next installment of In Debt or Indentured.

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In Debt or Indentured Part Three: Healthcare

People Politico In Debt or Indentured HealthcareThis is the third part of a multiple part series taking a deep dive into our current political and economic crisis in America. Partisan politics, unfettered corporate spending and recklessness along with a shift in our social acceptance of debt, is having far reaching and potentially devastating affects on our way of life, on the American Dream. With each installment we will take a closer look at some of the major pieces of this very complex puzzle and try to understand them and bring them into perspective. Use this opportunity to take a broader look on the political and social economic state of America and how each of us, as a small pieces of the puzzle, can make a difference.

In Debt or Indentured: Healthcare

Understanding the debt that will be incurred through education, a mortgage, and credit cards to a certain extent can be prepared for or at least decided upon as the benefit outweighing the cost of the debt. The unexpected has become another trove of debt for the American middle class especially in the form of health care, health services, and chronic illness. The Washington Post columnist Sarah Lovenheim in her article titled “New Study: Bankruptcy Tied To Medical Bills” reported that as of 2007 sixty-two percent of all bankruptcies in America were related to medical expenses. Within that sixty-two percent is a surprise, eighty percent of those that filed for bankruptcy were covered by insurance (Lovenheim). Even though many middle class families feel that it is critical to have health insurance to protect them and their families if sickness or an accident were to strike, this insurance oftentimes will not cover the entire cost of the care required. Couple the out of pocket cost to afford health care insurance with the deductible costs if the insurance is used, and add in the maximum payment from the insurance company, then compound this all with the rising number of Americans living with chronic illnesses and a picture of a middle class struggling to hold on to a system that is failing them clearly emerges. Again like college grants, Medicare and Medicade have been established  to assist the elderly and the poor a while the middle class is left holding debt for all of their expenses since they make too much for help from the government and not enough to afford the care they need.

Healthcare in this country is a huge problem and we will look at this topic specifically at a later date. For now, just understand that sudden, unexpected and even protected healthcare issues can be absolutely devastating to Americans on top of everything else we must endure.

That’s it for this part of In Debt or Indentured. We hope that this has given you some important things to think about. Use some of what you have learned here to look beyond the mere message our politicians are presenting to what the ramifications of these actions has on all of us Americans. Our country started down a slippery slope over a decade ago. We seemed to have stopped the free fall it had become, but do not fool yourself. We are still on the precipice of another long fall. Let’s just hope we all can learn, and grow, from the last spill we took.

Check back soon for the next installment of In Debt or Indentured.

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In Debt or Indentured Part Two: Education

People Politicon In Debt or Indentured - EducationThis is the second part of a multiple part series taking a deep dive into our current political and economic crisis in America. Partisan politics, unfettered corporate spending and recklessness along with a shift in our social acceptance of debt, is having far reaching and potentially devastating affects on our way of life, on the American Dream. With each installment we will take a closer look at some of the major pieces of this very complex puzzle and try to understand them and bring them into perspective. Use this opportunity to take a broader look on the political and social economic state of America and how each of us, as a small pieces of the puzzle, can make a difference.

In Debt or Indentured: Education

Another way the many middle class families have come to see the equity in their house is as a way to afford higher education for their children. As tuition prices for university and college educations have continued to explode, it became unreasonable for American families to be able to just save their way to a higher education for their children. Instead of demanding intervention from their government, the American middle class looked to their hidden savings in the form of home equity. For those that did not own their own home though the options dwindled to scholarships, grants and loans. With availability limited for students to receive scholarships and grants, many students are forced into borrowing in order to gain their degree. Writer and Editor Marcia Clemmitt dives into the ways which college pricing and affordability have changed over the past three decades in her report “Student Debt Is the College-loan System Fair?” Clemmitt observes, “Many analysts call current education-debt level truly alarming, arguing that college loans saddle students with long term burdens that can affect their choice of jobs and ability to shoulder other responsibilities such as mortgages.” The fear of analysts exemplifies that, as soon as, those students graduate from college, they have debt already strapped to their backs. Interestingly, these analysts are not only worried about the graduates’ ability to chose the job they want but the analysts are concerned that these students will not be able to get into the next big debt adventure for many adults…a mortgage.

The facts behind rising college costs are murky at best, but much has been attributed to state budget constraints and rising costs for services. Regardless of the reasons for the ballooning costs, student loans have far exceeded them by rising 375 percent from 1982 to 2005 (Clemmitt, 879). The debt being incurred by middle class Americans is phenomenal with total college debt surpassing America’s credit card debt in 2010 (Tompor). Part of the reason that college debt has become such an issue for the American middle class families is because there are safeguards in place for low-income families where they qualify for government grants and financial assistance. On the other hand, most middle class families do not qualify for these subsidies from the government and are instead made to rely on loans to pay for their further educations (Clemmit, 880). This has meant the cost to graduates has been growing substantially and as reported by Justin Pope for The Huffington Post titled “Average Student Loan Debt: $25,250” the debt for the average student is a large burden to leave school with. Graduating students were also met with nine-point-one percent unemployment (Finnegan). Priming students to become accepting of debt has been what the American middle class has come to embrace as their trade-off for participation in the American Dream.

That’s it for this part of In Debt or Indentured. We hope that this has given you some important things to think about. Use some of what you have learned here to look beyond the mere message our politicians are presenting to what the ramifications of these actions has on all of us Americans. Our country started down a slippery slope over a decade ago. We seemed to have stopped the free fall it had become, but do not fool yourself. We are still on the precipice of another long fall. Let’s just hope we all can learn, and grow, from the last spill we took.

Check back soon for the next installment of In Debt or Indentured.

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In Debt or Indentured Part One

People Politico In Debt or IndenturedThis is the first part of a multiple part series taking a deep dive into our current political and economic crisis in America. Partisan politics, unfettered corporate spending and recklessness along with a shift in our social acceptance of debt, is having far reaching and potentially devastating affects on our way of life, on the American Dream. With each installment we will take a closer look at some of the major pieces of this very complex puzzle and try to understand them and bring them into perspective. Use this opportunity to take a broader look on the political and social economic state of America and how each of us, as a small pieces of the puzzle, can make a difference.

In Debt or Indentured – Introduction

The American middle class is now swimming in debt that is pouring in from every direction. The middle class is faced with stagnant wages coupled with inflationary prices on energy and food, health insurance costs that continue to grow well beyond the rate of inflation, education debt, exorbitant cost of child care, and a dwindling number of well paid job prospects even for those that have higher education. These aspects coupled with The Great Recession have driven workers to stay in jobs that demand longer hours and with more tasks at the same rate of pay. Fear of unemployment and the debt that they owe has driven many American middle class workers to feel lucky to just have a job. They do not speak out because of their debt that they owe on credit cards, car loans, mortgages, and the steadily rising educational debt incurred by today’s students. With bankruptcy law changes that were heavily lobbied for by the banking industry and credit card industry, have made it virtually impossible for average Americans to qualify for bankruptcy bargaining to reduce the most of common middle class debts.

American household debt has been on the rise as credit became more available to middle class workers during the mid 80’s, 90’s and the first half of the 2000’s. With this new access to credit the Americans middle class families just as their government began to spend well beyond their means. Associate professor and Department Chair of Personal Finance and Planning at the University of Missouri Robert O. Weagley reported in an article for Forbes Magazine titled “Big Difference Between Chinese and American Households: Debt” that “The average US household debt is 136% of household income […] if we include federal borrowing, the United States number increases an additional $109,792 per household, to $224,303 per household or 266% of average household income.” This is a dramatic number that demonstrates how the American middle class has become reliant on cheap credit and borrowing. Professor of Economics at New York University Edward N. Wolf explains in his working paper “Recent Trends in Household Wealth in the United States: Rising Debt and the Middle-Class Squeeze—An Update to 2007” that “Indebtedness, […] skyrocketed in the early and mid-aughts [2000’s]; among the middle class, the debt-to-income ratio reached its highest level in 24 years.” Acquiring debt in America has not only established a way for Americans to live outside of their means through the use of credit cards, it has become blasé to go into debt in order to pay for a college education, afford transportation, buy one’s house, and even make daily necessity purchases. This has not always been the case in America.

Credit card debt in America exploded during the 1990’s through to the beginning of the Great Recession when credit became scarce and liquidity dried up as banks became unwilling to even loan to each other in fear of what bad debt the other bank might be holding. During this time period of easy qualification and exorbitant credit limits being doled out America’s binged. Writer Susan Tompor reported in her 2010 USA Today article “Student loan debt exceeds credit card debt in USA” that revolving credit in America stands at $828 billion, this included credit card debt. As Americans have become more accustomed to hearing numbers in the trillions, this number may have lost some of its sticker shock, but to put that into prospective, this is $2,760 owed by every man, woman, and child in America (based on a citizen population of 300 million). Although new lines of credit have been reduced following the financial collapse in 2008, existing borrowers have continued to use their credit cards. Karen E. Dynan and Donald L. Kohn said it well in their Federal Reserve report, “The Rise in U.S. Household Indebtedness: Causes and Consequences.” Dynan and Kohn claim “substantial evidence suggests that households are not always fully rational when making financial decisions” when discussing the American willingness to go into debt. Though Dynan and Kohn are primarily focused on housing debt they identify one of the reasons Americans have been willing to use credit cards so frivolously. The drastic rise in housing prices through the 1990’s into the mid 2000’s gave a false impression to many middle class American families that they were richer than they actually are (Dynan and Kohn, 6). By seeing the equity in their housing as actual banked money, many middle class Americans lived well outside their means knowing that they could refinance or sell their home and still end up with a net profit overall. This of course turned out to be a folly when housing prices plummeted during the economic down turn leaving many home owners upside-down in their mortgages.

That’s it for this part of In Debt or Indentured. We hope that this has given you some important things to think about. Use some of what you have learned here to look beyond the mere message our politicians are presenting to what the ramifications of these actions has on all of us Americans. Our country started down a slippery slope over a decade ago. We seemed to have stopped the free fall it had become, but do not fool yourself. We are still on the precipice of another long fall. Let’s just hope we all can learn, and grow, from the last spill we took.

Check back soon for the next installment of In Debt or Indentured.

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