On the State of the Union, and Deficit Spending

So, as a disaffected liberal, I had no real intention of watching the State of the Union. At least, not all the way through. But old habits die hard, and I turned on the State of the Union to catch a few minutes. Well, a few minutes turned into the full hour and ten minutes, plus the post-speech commentary. I did skip the Republican response, but it looked like it didn't suck, so the GOP has that going for it.

Anyway, my quick thought was similar to the iPad - if you're an Obama fan, there was a lot to be happy with. For the first time in a long time, I was reminded of why I voted for the guy. I loved that he told the Democrats to stop being pussies, that he told the GOP that they're going to own the obstructionism, and most of all, I loved that he chastised the Supreme Court for its decision. That Justice Alito reacted was all the better. If ever there was a President who would make a good Supreme Court Justice, it would be Obama.

Now, if you're not an Obama fan, this speech probably pissed you off. It was combative, and sarcastic, and worst of all, really, really good. Obama in a formal speech setting is like Peyton Manning just before the two minute warning: you know he's going the score, and there's not much you can do about it.

That said, I have a nit to pick with Obama - the budget freeze. Per everyone's macroeconomic course, we all know that the GDP is made of up three things: consumer spending, business spending, and government spending. Because of the current economic conditions, consumer spending and business spending is down. Also, local and state governments have cut back their spending as well. So, the only thing that can prop up the economy right now is the Federal Government, and increasing overall spending. Freezing domestic spending in this climate is dumb.

Now, I understand why the GOP wants to prevent any government spending - once the government starts spending money on something, its hard to stop. That's why the Bush Administration and the Republican Congress spent like crazy. And when asked what to cut, most Republicans sound like this.

So, what to do? I think rather dramatic spending on infrastructure is called for, but with clear sunset provisions. The beauty of infrastructure spending is that once the infrastructure is built, the spending stops. However, the benefits last for 10-20 years after. So, let's keep spending for a short period of time.

The Supreme Court and Corporations

As an attorney, I probably read fewer cases than I did in law school. At least, fewer when it comes to decisions of consequence. There are a couple of reasons for this: first, I read cases for work so reading cases for pleasure ain't fun; and, second, Supreme Court decisions are ridiculously long. So, let me first say that I haven't bothered to read the opinion of the Supreme Court with regard to corporate political spending but I am bothered by it.

Corporations are not natural born anything - they're the creation of lawyers and legislatures around the world. As economic actors, corporations give investors the ability to experiment with new ideas without putting too much of their personal wealth at stake. That's a good thing. But, corporations exist only so much as Congress lets them exist. If Congress passed a law, and the President signed this law, that eliminated all corporations tomorrow, all corporations would cease to exist because their underlying foundation - legal recognition - would cease to exist. Corporations would become essentially partnerships with each shareholder becoming a proportionate shareholder. The protections from company debt would be eliminated, and the partners would put their own fortunes on the line (as opposed to their share prices).

So, if a corporation is created by legislative action, can be eliminated by legislative action, then Congress should have the right to regulate the activities of these entities, including their "right" to free speech. Justice Rehnquist used to say that in the law, you have to take the bitter with the sweet, and here, the bitter is the inability of corporations to spend on campaigns directly, followed by the sweetness of existence. This is in contrast with actual people, who's creation cannot be so determined by legislative action.

So, what can be done? Simple, Congress can redo the legislation prohibiting corporate donations to campaigns, and then add a provision stripping the Supreme Court of jurisdiction to review the law's constitutionality. Since the Constitution grants Congress the power to decide what the Supreme Court's jurisdiction is (except for those provisions expressly provided for in Article III), Congress can tell the Court that its decision is wrong and tell them to go take a long walk off of a short pier.

Of course, Congress is almost completely owned by corporate interests, so this solution is unlikely. Typical.