In Crime, It's Better to Think Big

In Gwinnett County [Georgia] it is a felony offense to make a false statement to get a ride via Intelitran, ie, state-subsidized, non-emergency transport, to a Medicaid provider--a felony. Felony defined as "a major crime, as murder, arson, rape (deserving) greater punishment than ... a misdemeanor (that is) death or imprisonment in a penitentiary for over one year" ... for a poor, disabled person, lying to get a ride to his/her Medicaid doctor.

In a parallel, somewhat related, case, I read that "shoplifting becomes a felony when the stolen merchandise is valued at more than $100. It costs me nearly that much to change the belts on my car. How about $1000? $5000?

The statue of Blind Justice, as I understand it, is meant to represent blindness to social differences, i.e., equal justice for all, and her scales are meant to symbolize balance and proportionality, i.e., the punishment being in proportion to the gravity of the offense.

Several years back, my previous U.S. congressman was reported to have "converted" tens of thousands of dollars in campaign funds to his private use -- grand theft -- and it was "perfectly legal," to use Newt's language. Likewise, several years ago, the lawyers hired to recoup part of the losses from the S&L scandal were reported to have charged more in fees than they recovered. If I paid $70 for an auto tune, returned to find my engine parts scattered over the hood, and was told I got $70 worth, would I be satisfied? Currently, big spenders pay tens and hundreds of thousands to sit at the table and discuss (set?) policy with the big boys of the RNC, DNC and White House, and it's equally "legal" -- big-time graft, corruption?

The point I'm attempting to make is about appropriate, proportionate, justice. I would argue that an illicit ride to one's doctor, or a theft of $101, do not properly constitute felonies, while the corrupt use/abuse of large amounts of public and private monies are more serious matters. I would argue that such inequity creates cynicism, and contempt for the law, and the pretense of equal justice.

An old English saying goes: "Steal a sheep from the Commons and be hanged; steal the whole Commons and be made a Lord." But this is America, with its self-evident equality, and here it ain't justice, and it ain't equal -- even when it's "legal."


Lilburn, GA

Back to Drawing Board

Although I agreed with much in your short history of the legal development of corporations ["Labor: Take the Offensive," 7/98 Progressive Populist], there were a number of inaccuracies/weaknesses in your argument:

1. The Supreme Court's decision to give a corporation the benefit of the 14th amendment protections against violations of due process were not what limited direct legislative authority over corporate charters. State legislatures began passing general incorporation statutes, i.e. statutes setting general rules and permitting free incorporation as long as rules are followed, well before the Civil War. I don't think you want to argue in favor of scrapping general incorporation statutes and give state legislatures veto authority over individual private (profit or non-profit) ventures who want the benefits of limited liability.

2. "Corporations" did not gain control over the U.S. economy in the 1890s. The first real corporations of any size were the railroads. Many railroads defaulted on their bonds and other indebtedness when the U.S. government decided to pursue a tight money policy in the 1870s in order to put the dollar back on the international gold standard. Private investment banking partnerships such as J.P. Morgan & Co. and Kuhn Loeb & Co. picked up the railroads at bargain prices and controlled their boards of directors through the First World War. J.P. Morgan did the same with Carnegie's steel empire (at a better price), AT&T and Edison's electric ventures (GE) at the turn of the century. The legal status of these industrial businesses as corporations did not make them so strong that they were immune from the private bankers financial blackmail techniques.

3. The post-World War II model of the self-sufficient industrial corporation run by professional managers, if it ever was an accurate portrayal of reality, is no longer the case. The balance of power has again shifted to the professional money managers and investment banks. Two quarters of below-expected earnings and the market price of many corporation's stock will be reduced in half. To regain favor, the corporation may have to be sold or be forced to raise money under extremely disadvantageous conditions.

Thus, I fear that you are barking up the wrong tree. The real enemy is not "corporations" but Wall Street (the power complex, not the address), which (surprise, surprise) is still run by and on behalf of a self-consciously distinct upper class (itself a coalition of investment bankers, lawyers, entrepreneurs and heirs and heiresses that by and large share social connections gained at prep schools, Ivy League colleges and professional schools and sustained in distinct social groupings through life). Many of these people are self-consciously anti-bureaucratic and the under 40's among them would rather be dead than be identified with a particular brand of "corporate culture."

Go back to the drawing board.

Philadelphia, PA
Email rpasquier@wolfblock.com

Little Barn, Big Barn

The little barn, big barn controversy currently underway in dairyland cuts to the core of the policy problems facing the dairy industry. Should I expand my operation or stay small? The big barn has more risk of going out of business than the small barn according to the historic figures published by USDA in 1994. The big barn has a one chance in five of having financial problems, whereas the small barn only has one chance in twenty of having financial problems. The advantage goes to the small barn. The big barn gets more press and visitors, but the small barn will be there over the long haul. The small farmer will retain his land and homestead, instead of losing it to a creditor when he can no longer pay his bills.

At the same time I cannot deny that there are many small dairy farmers going out of business these days. The small dairy farmer is being pushed out of business by the larger units, as they produce more milk and flood the market with additional product and this has put a downward pressure on the price of milk. Capital and creditors are willing to finance an expansion in the dairy business, as they like these one in five odds, but they are reluctant to finance a small farm that has the better odds of survival, as his survival rate is nineteen out of twenty, and not one out of five as the big farmer must face. Creditors are weird people as they just don't seem to understand the odds. Neither will they finance a new dairy farmer who is trying to get into the dairy business.

The small dairy farmer is being eliminated from the rural scene as an agricultural producer mainly because of the low price of milk as the price has not increased since 1980. As he is cast out of the process of production, and as the next generation of dairymen are denied entry, the rural areas, in so far as it depended upon dairy farming, will slide into a state of economic degradation, called poverty. Without a middle class in the rural areas that sustains itself from economic production there will be no pillars upon which the rural economy can rest. Agricultural production used to provide these pillars, but in many areas dairy farming was the last viable economic unit, that would sustain a family. Other types of farming having already gone to larger scale type units where family producers are few and far between.

As we tear down these family farm units of production, the entire rural community comes tumbling down. The rural businesses, the rural school, the rural health system, and the agricultural trade groups are the first to fall. The next things to suffer decline are the rural way of life as the work ethic, patriotic spirit, and the religious ethic. Rural government will also suffer as the rural areas are left leaderless as the middle class farmer is eliminated.

This process of decline is already well underway in rural America. The ranks of the American dairy farmer in 1997 numbered 99,413. This number had fallen from 131,122 in 1992 for a loss of 32,122 dairymen or a loss of 24.2 percent. On an annual average basis we are losing 5 percent of our dairymen each and every year. The Center for Rural Pennsylvania in a publication reports that the fastest growing source of income in rural Pennsylvania are government payments such as social security and pensions, as well as stock and bond income. Income from agricultural sources is not among the growing sources of income in rural Pennsylvania. Nationwide, UDSA in a 1995 report states that "89 percent of the average farm operator's household income came from off farm sources, and many operators spend most of their work efforts in occupations other than farming."

The big barns can produce more milk and drive down the price and crowd out the man in the little barn, but this leaves behind a lot of rural wreckage. The land and the means of milk production are concentrated into fewer and fewer hands, the next generation is denied entry into the dairy business, and the rural areas suffer poverty, economic dislocation, and an out migration. These social costs are not considered in the current economic equation when the creditor decides to finance that big barn.

645 East Maiden St. Apt. 2B
Washington, PA 15301
Email lhamilt@Cobweb.net

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