Tea, Oil, Drugs and Mortgages

Did you know that Jefferson wanted to include an amendment in the Constitution to keep us free from monopolies? In his February 12, 1788 letter to Mr. Dumas he wrote:

With respect to the new Government, nine or ten States will probably have accepted by the end of this monty. The others may oppose it. Virginia, I think will be of this number. Besides other objection of less moment, she will insist on annexing a bill of rights to the new Constitution, i.e. a bill wherein the Government shall declare that, 1. Religion shall be free; 2. Printing presses free; 3. Trials by jury preserved in all cases; 4. No monopolies in commerce; 5. No standing army. Upon receiving this bill of rights, she will probably depart from her other objections; and this bill is so much to the interest of all the States, that I presume they will offer it, and thus our
Constitution be amended, and our Union closed by the end of the present year.

Jefferson also argued against the creation of a pseudo-aristoi, an artificial aristocracy created by wealth and lack of accountability. He didn't like the idea of the appointed Senate and wrote about it to Adams in 1813:

The artificial aristocracy is a mischievous ingredient in government and provision should be made to prevent its ascendancy.... I think that to give them power in order to prevent them from doing mischief, is arming them for it, and increasing instead of remedying the evil.

The problem with monopolies in commerce during colonial times at came from the colonists experience with the East India Company, owned by British royals and given full government cooperation in taxation and other protectionist laws. It was one of the big reasons for the American Revolution as colonists trying to compete with it were crushed by the crown with taxes and criminal penalties for piracy and privateering (trying to trade in tea outside of the British protectionist laws for EIC--that's where the word privateering came from). However, after the revolution there were many fat and happy American corporations in the making and the Federalists killed the no monopoly amendment. The artificial aristocracy initially flourished in the US and then got cut down a few pegs by Andrew Jackson. It grew again post-civil war under early republican regimes and was again cut down by the progressive and populist movements of the early 20th century as people saw the detriments to labor, health and safety. You can read all about this little discussed part of the American History in Unequal Protection, The Rise of Corporate Dominance and the Theft of Human Rights by Thom Hartmann. Howard Zinn writes about it in A People's History of the United States.

We are seeing the same problems today as our government supports oil companies, pharmaceutical companies, telcoms, financial institutions to the detriment of its people and it's failure to regulate corporations has left us with serious problems in food and drug safety and a disfunctional credit industry. I think differing opinions on how we regulate corporations are the main issue that separates the republican party from the American people. Corporationists like Bush, McCain and Kirk believe corporations should get full benefit of American law and constitutional protections while human beings, the real American citizens, should have only limited rights and be regulated in action, speech and thought. They want corporations to have the freedom to distribute inadequately tested drugs on the market and put meat from downer cows into the food chain, and they also want to limit your right not to be dragged out of your home and imprisoned without a warrant and your right to privacy in your calls and emails to grandma.

Cases in point #1 - 5 are the oil, agricultural, food, cosmetic and pharmaceutical companies. These republicans have supported subsidizing the oil companies that hold us hostage to 19th century technology, eliminating price negotiation with the pharmas allowing prices to rise and hampering safety regulation of the food, cosmetic and drug industries . I've written extensively about both topics in the past.

Case in point #6 takes us back to Jefferson's ealiest problem with corporations, financial institutions. Jefferson's first argument was against the national bank offering to take up the Revolutionary war debt. He was afraid of what mischief government favored financial institutions could wrek. Now we know. In our time and absent adequate regulation requiring fair dealing with consumers, the mortgage companies, with the help of Wall Street securitization of mortgage loans, plunged us into a credit and housing crisis.

At his Palatine meeting this past spring, Kirk stated his position against regulation of the mortgage industry. His reason was that he was worried that if mortgage companies were regulated, required to do the right thing by their customers and investors, mortgages would not be available in the poorer neighborhoods of our district. So basically, what he was saying was that he favors continuing the sale of mortgage products that would be eliminated by regulations aimed at protecting customers and investors from hidden and overreaching costs, absurd terms, and downright fraud.

I bring this up again now for two reasons. First, because a mortgage company memo titled "Zippy Cheats & Tricks" just surfaced. It describes how loan officers were instructed to trick a computerized in-house approval mechanism designed to weed out bad loans. They didn't want to weed out borrowers who could not afford the loans because they made money on these borrowers and they knew there was no downside because the loans were sold in the secondary market where others would be left holding the bag.

I also think this is worth discussing again because last week I heard a real estate broker interviewed on NPR.He was talking about how he's surviving the current market and said that he survives because of the new market of Canadians and Eurpeans buying up US housing stock. He said they are the only ones with any money. Even I was stunned at this one. I didn't know it had gotten that bad.

Because of their wealth and lack of accountability, corporations have no allegiance to our country or to our people, their customers and know they can get away with whatever. By failing to regulate corporations, we allow them to run amok on the people. The American colonists saw that back in revolutionary times and the populists and progressives saw it in the sweat shops and the jungle of unhealthy food markets. We're seeing it again now, but John McCain and Mark Kirk don't care, probably because they benefit from it through PAC donations and a corporate media that never asks them the hard questions, scolds their opponents and reads their press releases verbatim.