THE WORD CORPORATION DOES NOT APPEAR ANYWHERE IN THE U.S. CONSTITUTION

CORPORATIONS ARE NOT PEOPLE AND SHOULD NOT BE TREATED AS SUCH

By Melvin J. Howard

This post will serve as background of an announcement I will be making shortly in regarding the subject matter on international trade and our NAFTA case and how one company’s gross misconduct demonstrates a reckless disregard of U.S. constitutional rights and the rule of law. And the continuous violation of American citizen’s protected rights both at home and abroad. Private institutions that are less accountable than governments and whose interests do not align with profitability targets are designed to co-opt the application of power on behalf of the public. What was once the only domain of a sovereign nation now belongs to multi-national corporations? But first let’s go back in time and see how companies got these broad powers and protective rights that were reserved for people in the first place. It was an individual named John Marshall the first Secretary of State who was appointed Chief Justice of the U.S. Supreme Court in1801by then President John Adams little did Adams know what his appointee would unleash. However later in 1819, Marshall participated in a decision that would dramatically alter the balance of power between corporations and the governments that created them. The origins of the case The Trustees of Dartmouth College v. Woodward can be traced back to the founding of what became Dartmouth College in 1754. By 1815, two sides were issuing inflammatory and contentious pamphlets, and the trustees ultimately decided to remove the founder Reverend Eleazor Wheelock and elect a replacement. In response, Wheelock went to the New Hampshire legislature and got them to pass a series of laws revoking Dartmouth's corporate charter and putting the school under public control. The trustees ignored the law and continued operation of the school as before. This triggered passage of yet another act by the legislature, making it illegal to serve as a trustee or officer of the college without an appointment by the legislature. The trustees appealed to the Supreme Court. On March 10, 1818, Congressman Daniel Webster a Dartmouth alumnus and future senator, secretary of state, and presidential candidate, presented arguments on behalf of the college and the original trustees. Webster had gone a step further then anyone thought. He used the idea of property rights to limit a state's influence over a corporation once it had been brought into existence. This would open the door to the gradual accumulation of other rights and prerogatives by corporate "fictional persons" that had only recently been won by real people. As we all know by now, the concept of property rights, which was originally developed to preserve an individual's rights to property, would as a direct result of this decision be used to grant individual rights to entities that were themselves a form of property.

It was ironic, hypocritical and somewhat of a insult of all involved that while these early advances were being made on the road to granting individual rights to "fictional persons," which were in fact forms of property, real people were still being bought and sold as property with fewer protections than corporations. Webster closed his case by arguing that the actions of the New Hampshire legislature in undoing the original charter violated constitutional provisions against taking away property without due process.

When the Court announced its decision, the Chief Justice began by stating that "the American people have said, in the constitution of the United States, that 'no State shall pass any bill of attainder, ex post facto law, or law impairing an obligation of contracts." He asserted that "it can require no argument to prove" that a contract existed in this case. 

The private donations of funds with future authority vested in the trustees made Dartmouth a private corporation whose rights were protected by the Constitution despite the holding of the New Hampshire court. He then defined what a corporation is:

A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. Being the mere creature of law, it possesses only those properties which the charter of its creation confers upon it among the most important are immortality, and, if the expression may be allowed, individuality; properties, by which a: perpetual succession of many persons are considered as the same, and may act as a single individual. They enable a corporation to manage its own affairs, and to hold property without the perplexing intricacies, the hazardous and end-less necessity, of perpetual conveyances for the purposes of transmitting it from hand to hand. By these means, a perpetual succession of individuals are capable of acting for the promotion of the particular object like one immortal being. But this being does not share in the civil government of the country, unless that be the purpose for which it was created. Its immortality no more confers on it political power, or a political character, than immortality would confer such power or character on a natural person. It is no more a State instrument, than a natural person exercising the same powers would be.

Restoring Civil Rights to human-beings not corporations

While this definition is famous, it contains a big big flaw. It fails to recognize the connection between economic and political power. It fails to note that an entity that is granted immortality has the ability to accumulate more means and thus influence than a mortal human being. Further, it fails to recognize that the decision of which it was a part would later be used to open the door to future Supreme Court decisions that would grant additional "individual" rights to these "artificial beings" that would allow them to use that economic power specifically for political purposes. Furthermore, the corporation in question was an institution of higher learning, not a profit-seeking company. The decision and its subsequent interpretations seem to gloss too quickly over this fact, ignoring the critical role a corporation's mission plays in determining its value to society and consequently how it should be treated under the law. U.S. states were rattled by the Dartmouth decision and tried for a number of years to work around it by either limiting the duration of charters or obligating companies to have a public purpose. But gradually they began to change their laws in ways that ultimately gave even greater latitude to companies. In 1830, Massachusetts passed an act decreeing that corporations did not need a public purpose in order to achieve limited liability status. Seven years later Connecticut created what would be a popular model when it enabled firms in almost all areas of business to incorporate without a special legislative act. This signaled the beginning of a competition among the states to offer ever more business friendly laws. New York was an early leader in this sweepstakes, then New Jersey; ultimately Delaware was viewed as so welcoming that today more than 50 percent of publicly traded corporations are incorporated in that state. This competition for investment, of course, presaged a similar competition that would be created among nation-states for the investment of multinational corporations. While some might assert that states have the upper hand because they can issue and enforce laws, states' power is not absolute if in so doing they damage themselves economically (which in turn damages their leaders politically).

Further, while Dartmouth offered corporations the protections of property and contract laws pertaining to their charters, subsequent Supreme Court cases have enabled companies to obtain additional rights that had previously been thought to be available only to actual flesh-and- blood people. In 1886, in the case of Santa Clara County v. Southern Pacific Railroad, the Court declared without argument that the Fourteenth Amendment of the U.S. Constitution, which guarantees equal protection of the laws (and was originally intended to provide protection for actual human beings denied such protection), applied to corporations. In 1890, it used this principle to start a series of rulings over the next fifty years that were used to strike down economic and often anti-corporate regulations under the Fourteenth Amendment's doctrine of substantive due process. Fifth Amendment due process and Fourth Amendment protections against unreasonable searches were added in 1893 and 1906 respectively. And then, in the 1970s, the pace picked up and some really remarkable bending of the law took place to empower the private sector in ways that would have been unimaginable to those who once saw property rights as a tool by which to empower individuals.

Writing seventy years after the initial passage of the Fourteenth Amendment, the U.S Supreme Court justice Hugo Black lamented the fact that of all the cases to which it was applied, "less than one-half of one percent invoked it in protection of the Negro race, and more than 50 percent asked that its benefits be extended to corporations." Given that the amendment was passed after the Civil War to correct the grotesque ways the law had been used to deprive African Americans of their liberties and fundamental rights, Black's shock was easy to understand. It is quite clear that corporations were never the amendment's intended subject. The language of the amendment speaks of protections for "all persons born or naturalized in the United States." It asserts that no state can deprive such people of "life, liberty or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws," While Justice Marshall had noted that historically the law had viewed corporations as "artificial" beings, in the tradition of English law.

Of the ten amendments that make up the Bill of Rights, corporations have successfully asserted the applicability of five to win protections for themselves. These include the First Amendment right to free speech, the Fourth Amendment freedom from unreasonable searches and seizures; the Fifth Amendment prohibition against takings and double jeopardy (despite the fact that the amendment clearly refers to natural persons); and the Sixth and Seventh Amendment rights to jury trials in criminal and civil matters, respectively. This sort of high-paid alliance on behalf of the interests of business illustrates yet another way in which the scales of justice are balanced somewhat differently when it comes to corporate citizens rather than mere individuals with much more limited means. This result in an uneven application of the laws or more protections for those who can afford to assert them, then the law is once again being used as a tool to advance the interest of the few in ways that reasonable critics may see as antithetical to at least its asserted purpose within "just" societies.

Other cases show similar creativity in the use of constitutional protections to push back against federal power and advance corporate interests. Certainly, the assertion of such a right seems to be at odds with the original concept of the corporation as an entity created exclusively to advance public interests.

The Fifth Amendment protects against double jeopardy by stating that no person shall "be subject for the same offense to be twice put in jeopardy of life or limb." Nonetheless, even though a 1906 ruling asserted that corporations do not enjoy constitutional protections against self-incrimination, a 1962 case and 1977 case both asserted that companies could not be retried in cases that had previously been settled by direct verdicts. As for the Fifth Amendment guarantee that "life, liberty or property" cannot be taken by the state "without due process of law.

The majority of American businesses want nothing to do with crony capitalism and corporate rights. As in Theodore Roosevelt's day, this cause is neither partisan nor divided between racial lines. There is a strong need to contain the government-created and -subsidized transnational corporations that wield such much power over American lives and communities. Clearly, there is no reason to stay on the sidelines while these stateless corporations violate the rights that were clearly meant for human-beings. We frequently hear of the emphasis in constitutional interpretation on the intent of the framers of the Constitution. We ought not to forget, however, how often and how actively Americans have updated the Constitution by using the amendment process as a basic tool of democracy. In the end, it is the American people who are the ultimate interpreters of our Constitution, and it is we who decide how to fulfill the framers' vision of equality, freedom, and justice for all. If original intent is the guideline, we can take comfort in two key facts. The framers intended the Bill of Rights to protect the liberties of human beings, not corporations. And the framers intended that Americans take responsibility for amending the Constitution when necessary to strengthen self-government and protect our liberties.  

The Corporation Reformed  

In this global era, of self-interested companies and cross border transactions, when it is combined with the need to co-opt and bend state laws to their need, in the pursuit of enhancing shareholder value. This leads them to enter into illegal and unethical behavior that goes unquestioned. Corporations are not just accountable only to shareholders. Why should we not expect that those who accept the government created privilege of incorporation balance that privilege with good standards for the livelihood of employees, our economy, and the health of the environment and of the communities in which they do business? And why should we allow multibillion-dollar global corporations to take shelter in the corporate law. At some point should not the size and complexity of a corporation warrant a federal charter rather than a state charter from the most corporate-friendly state that transnationals can find (or can pressure)? Why shouldn't all Americans decide what standards we expect from global corporations that choose to do business in the U.S. Why should the corporate status be perpetual, without some ability of the people to evaluate whether the corporation has complied with the law and served the public interest as intended? In America, we are free, or should be, to answer these questions in the democratic way we can debate and then vote to make whatever answers best serve the country. The rules of corporations come from us if we do not like how the corporate rules are working out, we need to change them. At least two principles should guide corporate law reform to restore balance between large corporations and human beings and our government. First, incorporation is a privilege. Second, transnational corporations should not be able to use the corporate law of a single state, without proper national corporate standards and safeguards.

Incorporation Is a Privilege

Corporate law is a public matter, not a private one. Corporate law defines parameters of corporate conduct and shapes our world, our families, and our communities in profound ways. We cannot afford to leave it to multi-billion dollar transnational corporations to decide what they think corporate duties and responsibilities should be. Corporate and Constitutional law may seem boring, but we need to care about these laws as much as we care about any other laws or issue, from the environment to the economy, from healthy communities to strong families, from energy to foreign policy and war. The consequences these laws, for better or worse have as big an impact on those issues and others than any other laws, and perhaps more. Global companies should not be able to cloak themselves in the American flag when it needs U.S. funds. But drop the flag when it comes to moving earnings back home.

THE LIBERTY OF A DEMOCRACY IS NOT SAFE IF THE PEOPLE TOLERATE THE GROWTH OF PRIVATE POWER TO A POINT WHERE IT COMES STRONGER THAN THEIR DEMOCRATIC STATE ITSELF. THAT, IN ITS ESSENCE, IS FASCISM OWNERSHIP OF GOVERNMENT BY AND INDIVIDUAL OR GROUP.

FRANKLIN ROOSEVELT:

The MIB Of Health Care

No not the Men In Black the Medical Insurance Bureau or (MIB)

By Melvin J. Howard

Privacy in the information age is a bit of a misnomer and not likely that's because, as with everything else, it's long gone even in health care. You’re very personal chat with your doctor is now in a file that gets tracked by an industry that has built up around paying for the problem you were talking with him or her about. Medical records are routinely shared with companies called clearing- houses whose sole function is to facilitate the process of getting payment. These companies, staffed by lawyers and accountants as well as data entry clerks, all see your records before they share them with the insurers, health plans, HMOs, and government agencies that end up paying for it. A privacy consultant whom I know estimates that by the time you account for laboratories, x-ray facilities, and pharmacies playing their part, hospitalization for a treatment that is paid by a third party routinely allows between one and ten thousand people access to your "confidential" medical information.

THE MIB

The one company that warehouses information for medical insurance providers is a nonprofit trade association called the Medical Insurance Bureau (MIB). Unlike commercial enterprises such as FICO, Experian, Equifax, TransUnion, Innovis the MIB has no competition and no profit motive that encourages very aggressive reporting. Finally, the medical information that is tracked is, by and large, gathered directly from you. Instead of relying on regular reports by third parties, insurers ask each of us what they want to know about. The function of the MIB is really to retain information that you give one company and compare it to what you tell the next one on the insurance application. Here's how medical reporting works: The seven hundred insurance providers that belong to the MIB association agree to share information with one another using the MIB as a central repository. If you've ever submitted an individual or small-group application for any kind of medical insurance, the insurance company probably translated key pieces of information about conditions that affect your health or longevity into numerical codes. They transmitted those codes to the MIB database. The next time you apply for coverage, your new insurance company will send a query to the MIB database to verify that the information you're submitting is in line with what you've told other insurance companies in the past. This method of fraud protection for the medical insurance industry has been in place since 1902. Despite its long standing, I can only assume that computers have made the MIB more efficient at tracking.

YOUR MIB REPORT

An MIB report will contain the inevitable identifying information like your name, date and place of birth, your address, and any other names you might have used in the past. In a truly refreshing break with most medical insurance practices, it is optional for an insurance company to submit your Social Security number. This information may actually not be in an MIB report on you! The other information contained in your report is a series of codes that correspond to any medical conditions or hazardous activities that might affect your health or longevity. There are approximately three hundred and ten codes that the MIB system uses. While most are for medical conditions, a handful do capture so called dangerous hobbies, one exists to note the fact that you have a bad driving record, and two indicate family history (one for cardiac problems; the other for any kind of hereditary disease). It's difficult to say which conditions are considered important enough to report to the MIB. There appears to be some bit of discretion afforded each insurer about what they deem worth storing in the database. From your perspective, you should probably consider anything you've disclosed on an insurance application or allowed a doctor to tell the insurance company in the past seven years as fair game. The time limit on most information is seven years from the time it gets communicated to the MIB. If an application reports that a condition is still going on, the date of that report resets the seven-year clock. In other words, a condition that started ten years ago but that you still have today is still listed. The final bit of information contained in an MIB report is how many times an insurance company has requested your record in the past two years. These days, asking for information has become almost as important as the information itself. 

WHAT LEGAL PROTECTIONS DO I HAVE?

All of the companies that I have been discussing are consumer reporting agencies and are regulated by the Fair Credit Reporting Act. That means that you have the right to know if they have a file on you and what that file contains. It also means that your neighbor does not have the right-without being able to demonstrate a reasonable business relationship to order an insurance report on you. When it comes to medical information, there are a few additional safeguards. The FCRA explicitly restricts dissemination of any medical data on you without your written permission. The only problem with this is the fine print of absolutely every insurance application I've ever read includes waiver language that not only gives the insurance company the right to see your report, but do everything up to interviewing your grade school principal if they feel like it. But there is a law that came into effect that further restricts what can be done with medical information.

The Health Insurance Portability and Accountability Act (HIPAA), was designed to provide federal-level privacy restrictions on medical information collected by health care providers, pharmacists, and insurers. Although many states had effected protective legislation, this was the first time the issue was addressed at the federal level. In a nutshell, HIPAA requires that you be able to see, copy, and add to any of your medical records and that you be informed of the privacy practices adopted by your health care provider. Surprising as it sounds, you had no legal right in some states to see your own medical records before HIPAA. HIPAA also limits the use of your medical information. Before a doctor, pharmacist, hospital or insurer can release any medical information to companies that aren't directly involved in offering you health care, such as a life insurer, a bank, or a marketing firm, they have to get your signed permission. Even before the global financial melt-down many state legislatures took to privatization of their social programs including most of their health care services. But going to the lowest bidder has not come without controversy there have been reported cases of abuses of privacy issues, discrimination, fraud and corruption. The one most important role of government is to look out for the welfare of the population it serves.

Making money and creating jobs is one goal of capitalism insofar as it supports economic strength and therefore stability nothing wrong with that. But it is a far cry from looking out for the welfare of a population. Corporations’ legal obligation is to make money. That is to reduce costs to increased revenues = Profit. Generally, in an economy which has been defined by growth, stagnation (not growing) is failure (in the red). So, it makes plenty of good business sense that companies are not investing in growth at a time when savings and stagnation could be more easily construed as success. That’s good common business sense. The problem is that these good common sense business practices do not necessarily translate into social public good. 

Getting Your MIB Report

If you decide that you do want to check for an MIB report, you must submit your report request in writing because of the extra sensitivity of medical information. You can get the request form online at www.mib.com. The information you need to provide is: name, date of birth, and state of birth. The MIB does ask for other information but indicates that it's optional. This is because they will verify your contact information with your current insurer before releasing your report to you. The final part of the form consists of directions for how you'd like the information sent to you. Just as with all of the other information trackers, the MIB is subject to the FCRA and FACTA. This means that they will ask for a fee for the record search, but that fee may be waived if you can prove that an MIB report was used in a decision to deny you insurance, or lowered if you live in a state that requires this. In addition in 2005, you are now able to request a free report once a year (check the FTC Web site for info on this). The written request form with a check should be mailed to:

• The names of the MIB member companies that reported information to the MIB.

• The names of the MIB member companies that have requested a copy of your MIB record in the past.

• The type of information that MIB has on you, i.e., files from MIB (life), DIRS (Disability Insurance Record System), and HCI (Health Claims)

• And the contents of your record itself, containing your name,
your date of birth, your occupation, and a list of the codes that
have been submitted about you. When you get your report, you will also receive a plain English description of the codes that apply to you. You'll need it. A sample
code taken from an MIB example looks like this: 705GZN

• The first three numbers represent a condition code.

• The first letter indicates the degree of severity.

• The second letter identifies the info source.

• The final letter denotes the time of condition (i.e., within one
year of the application). If you have any questions about the process you can call the MIB.

If the MIB doesn't have a file on you, they will send you a simple letter saying so. If they do have a file, you will really need your CIA decoder ring. The MIB reports have the most "interesting" format. Unlike other reports, these try to protect your private information. They have actually been designed to be difficult to read so that a clerk can't tell you've got a heart condition from a quick glance. But errors do crop up because of typos-looking at the bizarre code above. They also happen when labs mix up test results. And they can happen because sometimes even well-trained and well-meaning doctors don't get the diagnosis right. If a doctor made a judgment call that exaggerated a problem or perhaps missed the mark entirely, that information might still be sitting in your file, even though you got it sorted

  

Correcting Your MIB Report

Honest errors need to be corrected. But if the error is because your file is out of date, don't waste time trying to update it. According to the MIB, if you sky-dived in 2005, and this was reported, the information that you sky-dived in 2005 is correct. Remember that condition codes come with dates attached to them. Even if you give up sky-diving in 2006 they will not remove this info from your file, because the report that you sky-dived in 2005 is correct. Since there is no code for "doesn't sky-dive anymore," there is no way to add to your file to indicate that you once did something that might affect your longevity but that you don't do it anymore. If you submit an application to an insurance company and don't mention that you sky-dive, the insurance company will either assume that you no longer sky-dive or ask you about it. If they don't, your best defense is to be aware that an incomplete record exists and to make sure that the vendors using it are using it appropriately. If you don't plan on applying for insurance in the near term, there really isn't a need to do anything. It may be better to wait. If the information in your record is close to seven years old, your entire file will soon be expunged as a matter of course. The MIB is pretty careful about keeping around any information that can't be justified. 

NOW TAKE EVERYTHING I JUST WROTE ABOUT AND THROW IT OUT THE WINDOW

The Patient Protection and Affordable Care Act of 2010 and the Hub. Aside from medical privacy, this legislation changes everything about what I have just mentioned thus far. The draft Data Services Hub Statement of Work (July 2011) says the HUB "will act as a single interface point for Exchanges to all federal agency partners..." It must be implemented by September 1st, 2013 and must include "Data models for maintaining individual data, transaction audit data, federal agency partner data, etc." The federal government say the HUB will be able to verify Social Security Numbers, citizenship, imprisonment, income information, tax credit eligibility and eligibility for public subsidies in real time. How much data? The Affordable Care Act (ACA) requires government-issued "individualized risk scores." One particular controversial contractor building an exchange has access to: private data, non-public data, confidential data, medical data, federal tax information, welfare data, protected health information, chemical health records (drug and alcohol use), electronic health records, any "record" as defined by the Privacy Act of 1974, and "other data."

Here is the big problem I see happening if the head of the CIA could not maintain his own privacy and secrecy of a brief love affair. What are the chances our privacy will be abused as ordinary citizens? Will the HUB just stop with health care?

Hurricane Sandy And The Environment

And the warning about global warming and more such severe weather to come.

By Melvin J. Howard

We now know that you and I don't just go out and make money when we go to work or sell something. Instead we are just getting a transfer of already existing money from people that have some. Unless these people or companies are a bank then they didn't make money either - they also got a transfer of some money that already existed. Money, you will recall, is just the other-side, the mirror image, of debt. Money is created by the creation of a corresponding amount of debt. Money, in its most basic and spendable (or liquid) form, is created by banks making loans to the non-bank public.

Maybe your money started its life as funding for a dam or mining project, and here you are with it today. Maybe it even started off as the funding for that logging project that caused your favourite forest to be clear-cut and which caused you so much distress. That seems like money some of us might not like very much. Before I even ventured into the outback I really never knew what was all the fuss about? Global warming, carbon pollutants, clear-cutting, recycling. I didn’t care much as long as it didn’t affect me in the City but slowly I found that it did it effects all of us. So lets look at exactly what purposes money is being created for and then we'll have a better idea of the history of the money we are spending today.

If you go to the web site of the Federal Deposit Insurance Corporation bulletin at http://www.federalreserve.gov/pubs/bulletin/2000/0600lead.pdf. Total assets of commercial banks at year-end 2000 are $6.2 trillion dollars. Savings Institutions have total year end 2000 assets of $1.2 trillion. Here is an interesting way to look at this data. Adding up the total Commercial Banks and Savings Institution Assets would give a total of $7.4 trillion in bank assets. This is, of course, debt of the non-bank public (that’s us) owed to the banks this is in the form of mortgage, credit card debt and so-forth. The way that money works this should mean that the total money supply in US dollars (that is the money that we non-banks can use in the trade for all goods and services) should be close to this $7.4 trillion in bank assets. At the end of 2000, this is $7.2 trillion, which is only 2% off the total bank assets or debt owed by the public to the banks. 

Let's just focus on Commercial Banks since that’s where most money (almost 85%) is being created. This total balance sheet of the commercial banks gives us the breakdown of how today’s available bank money was created. We see that $3.8 trillion, or 60% of it, is created as "Loans and Leases". The rest was created for other assets owned by the banks such as investment securities and bank real estate. So let’s drill down into these "Loans and Leases" since they make up most of the money that’s been created. You will see a breakdown of how this $3.8 trillion dollars was created. Almost 50% was created for real estate purposes, mostly mortgages for residential and commercial real estate purchases and development. Another 30% is for commercial and industrial project purposes. And most of the rest is loans to individuals, in the form of Credit Card and other personal debt. 

Combining this information we can see that almost half of the money created by banks comes into existence for some kind of real estate transaction, commercial or industrial project. We can extrapolate and say that about half the money we use today came into existence for the purpose of some kind of Land Alteration and its associated natural resources. This means the replacement of natural land with some kind of human development. The US dollar based monetary system including the G-20 nations, as we know it today is heavily dependent for its survival on human alteration of the natural landscape and it's resources.

Let’s go green

Nature has figured out some excellent ways to moderate the flow of water to manage flood and drought risk and also to clean water so that the waste of one process can get all cleaned up and ready for another process. This all happens through water's interaction with the land and with the ultimate Central Banker - the Central Banker of Energy, the Sun. Humans have absolutely no control over the Energy Central Banker. All they can control is the things that store the sun's energy like plants and animals that eat plants, and also they can go find the sources of other stored solar energy in the form of old squashed dead plants and animals, called oil and coal. All these activities plus all of the human monetary-system driven development of land effect the land on earth, not the Energy Central Banker. So the land is what we focus on in considering the link between the water cycle and the money cycle that forms the basis of our economy. The way that nature manages flood and drought risk is really through plants and soils which are, of course, the very best of friends - the soils being largely made up of decaying leaves and trees, and the plants needing the soils for food. The soils store lots of the rain as groundwater and they are kept in place by tree roots. Some of this water the trees might like for later when they get a bit thirsty, and other ground water might fall to an underground aquifer or run off slowly into a stream in the watershed.

Having lots of plants and rich soils in a watershed means that when there is lots of rain the ground will soak up lots of the excess water and this will help mitigate flood risk. When it's been a long time between rains you can rely on the groundwater in the aquifer or the groundwater gradually seeping into a nearby stream to provide a steady flow of water from earlier rains. This helps mitigate drought risk.

As for natures water cleansing functions the trees keeping the soils in place prevent excessive amounts of mud, clay, sand and salt from sliding into the stream. The soils and the little microorganisms living in them are very fond of waste products that most other living things would find rather unappetizing. Them and other little critters living in or near the stream often perform water cleaning and filtering functions that help to make the water useable for others. The trees sweat off some water through evapo-transpiration helping to cool the stream area so that all the critters that live there that have an important role in the water cycle can stay at a nice temperature to do all their work. Having such a water cycle on our planet makes a lot of sense given that gravity would otherwise drain all the water to the salty sea and sea-water is not very drinkable. This whole business of evaporation and rainfall to replenish all living things that need fresh water is quite sensible and, of course, life as we know it would not exist without an efficient water cycle. A prosperous human society cannot exist without an efficient water cycle. There's that efficiency word that people would have us believe that only markets can provide. There number of ways to describe efficiency but lets just talk about efficiency in plain language that makes sense intuitively. At the end of the day markets and the monetary system are all about allocating energy amongst the different participants of a society - whether that energy be in the form of labor applied to a raw good to make it into a product, the raw good itself such as food crops, or stored energy such as coal and oil. And we know that all our energy comes from the sun and that only plants know how to capture and store that energy directly. All these being the processes of Mother Nature they obey what we humans have interpreted to be the natural laws of physics, most especially they obey two important energy laws - the First and Second laws of Thermodynamics - that have never ever found to be violated by any process. Water obeys these natural laws. Money, being a purely human abstraction, does not.

The First Law of Thermodynamics is the Law of Conservation of Energy. This says that the amount of energy in the universe is fixed and you can’t create new energy or destroy existing energy. When it comes to the planet Earth, we get new energy to the earth from another source in the universe, called the Sun. Apart from all the energy that we have stored in and on earth and the daily dose of sunlight we have no other energy available to us. This is perhaps the primary reason humans have seen fit to develop markets - that is, to allocate this scarce resource of energy.

If the laws of Thermodynamics had just stopped there, all would be right with the world! Under the conservation of energy I could just fill my car with gas, stick a little collector in the exhaust pipe and recycle all the energy I just used and fill my car back up, since I know that energy will be conserved. I only ever have to buy one tank of gas in my life. Buy one load of electricity to heat my home for my whole life Id just recycle everything over and over. Energy companies would go bankrupt, there would be no wars in the Middle East, and the stock market would collapse because no-one could make money from selling energy.

OK there’s a catch. And that’s the very important Second Law of Thermodynamics. The ENTROPY Law. The law that sits right at the heart of the conflict between man and nature. ENTROPY is a measure of disorder in terms of the usefulness of energy. Low entropy means very useful energy. High entropy means quite useless energy cant use it for another process, its not organized enough. The Second Law of Thermodynamics says that Entropy always increases as energy is used. Therefore, once you have used all the gas in your tank, even though the driving process left the same amount of energy from the gas in the world, that energy has become pretty useless so that you cant re-use it. This law then really creates the scarcity of energy and the primary motivation for using markets to allocate it.

Some economists tell us that this will be done most efficiently if the conditions of a free market are met. Presumably this means energy will be distributed more efficiently since that ultimately is what the market is distributing. So how does the market deal with the Entropy Law? The answer to that would be Not at all! While it is true that the Entropy Law contributes greatly to the scarcity that gives rise to the need for markets you will not find the Entropy Law mentioned in mainstream economics textbooks. Modern money and capital markets, and contemporary economics have been built up IGNORING the most fundamental laws of nature. It is interesting to consider who runs things most efficiently - the Markets or Mother Nature? Given that the most desirable outcome of the water cycle, even from a human-centered point of view, is a stable, secure flow of clean water one would have to conclude that Mother Nature arranges the most efficient allocation of energy, for, in the natural processes there are no waste products, and solar energy is used to its maximum. Every player in the natural water cycle does some work in the water cycle and various related nutrient cycles and their waste products get used as input into some other process in these cycles. Nothing is wasted and everything fits together to form a whole cycle that has evolved over millions of years and that we are the beneficiaries of today. Nature's water cycle seems to have taken the Entropy law into consideration and then optimized energy use within this boundary condition.

Enter Man

But then we Humans come along with fears of scarcity, markets and a monetary system that ultimately depends on alteration of the land for its survival and for the survival of the markets. But most alterations to the natural landscape then disturb Mother Nature's maximally energy efficient water cycle in several common ways. These are common things that have happened all across the globe:

• First, deforestation exposes soils and causes soils, sediment and salt to rush into the stream at the next rainfall. You end up with salty water and/or sediment that kills off lots of the plants and critters that had important roles in the water cycle such as water filtration.
• Second, the loss of soil and vegetation, coupled with impervious surface coverage such as roads, car-parks and buildings means that water can no longer seep into the ground as is very important in mitigating flood and drought risk. The frequency of flood and drought increases.
• Human activity in watersheds (real estate, mining, logging, intense farming and so forth) and the loss of filtering systems through the loss of vegetation and soils means more and more pollutants are entering the water sources.
• The practice of building dams either for hydropower or for storing water in a place that doesn't have enough, and the practice of channelling water to places that don't have much, has been responsible for massive loss of aquatic life, flooding and drastic alteration to affected watersheds and local water cycles.

Then we market-oriented humans come along and say, "Now we have a water problem. Let's use some market mechanisms to fix it." In fact a lot of the market-oriented people go so far as to say - "Let's privatize the water - they think that this pure market solution will fix everything can you believe this? " And they say this perhaps forgetting that it was market forces that got us into this problem in the first place.

All this is not to say that us humans should not have markets for other things or should not alter the land. Rather it is a wake up call to build a much better world and make more efficient use of our energy. Ultimately this would mean a paradigm shift in the way land is developed so as to retain enough natural resources for million of years to come. If we do these functions right it would enter into the economy at the point of credit creation, or equivalently money origination think about it. “That’s why I am green.”

Medical Directives

Doctor’s orders

By Melvin J. Howard

Plato the Classical Greek philosopher and mathematician, student of Socrates. Mused that insofar as we are all restricted in this human body and by the conditions of life here on earth we are unable to attain true wisdom or nirvana. And we can only attain true fundamental wisdom through the pure soul and that is obtained when we are released completely from the limitations of the human body. And this is the true equalizer of all mankind "death". But what if you don’t go away gently in to that far night right away? Yet you become incapacitated mentally or physically for some reason what then? That’s when you need a directive a medical directive. An Advance Medical Directive or Advance Health Care Directive also called a Medical Power of Attorney or even sometimes it is even referred to as an Designation of Health Care Surrogate, allows you to designate a health care agent to make medical decisions for you if, for any reason, you are unable to make them for yourself. It can also be used to designate someone to serve as your guardian or conservator in the event a court determines that you have become mentally incapacitated.

If you have a trust-based estate plan, then your Last Will and Testament will only be used as a safety net to catch assets that you did not transfer into your trust prior to your death and put them in there after your death. This type of will is referred to as a Pour Over Will and contains minimal instructions since your Revocable Trust is the main document governing your estate plan.

What is a trust?

A trust is a legal relationship which is created when a person transfers property to a trustee with the understanding that the trustee will manage the property for the benefit of one or more beneficiaries. We use the term “property” here in its broadest sense; it includes both real property—such as land and buildings—and personal property—such as bank accounts, stocks and bonds, and personal effects. The person who transfers the property to the trustee is called a trustmaker (also known as a settlor, grantor, or trustor). In the typical revocable living trust scenario, the trustmaker is also the (or a) trustee and initial beneficiary of the trust. The written agreement between the trustmaker and the trustee is called the trust instrument.

What is the difference between a revocable trust and an irrevocable trust?

If the trust instrument says that the trustmaker can revoke the trust or change the trust instrument, the trust is what we call a revocable trust. The trustmaker has complete control over a revocable trust. If the trust instrument does not allow the trustmaker to change the trust instrument or revoke the trust, we have what is called an irrevocable trust. Irrevocable trusts allow trustmakers to make gifts but keep the recipients from having complete control over the gifted assets. Trustmakers must give up control over assets that they place in irrevocable trusts.

What is the difference between a living trust and a testamentary trust?

A living trust is one that you create during your lifetime by making a trust agreement with a trustee and transferring assets into the trustee’s name. A testamentary trust, on the other hand, is one that goes into effect and is funded (i.e., assets are transferred to the trustee) following your death. Thus, a revocable living trust is one that you create and fund during your lifetime, and over which you have virtually complete control.

What is probate?

Probate is the court proceeding to transfer a dead person’s assets to the people who are supposed to get them. I have had personal experience in this scenario it is simple in concept, but humbling in practice. Probate can easily take a year or more to complete, and the attorneys’ fees and other costs associated with probate could easily eat up 5% of a decedent’s gross estate. (“Decedent” is lawyer talk for someone who has assumed room temperature i.e., a “dead person.”) If a decedent owned assets located in more than one state or country, it may be necessary to have a probate in each jurisdiction in which assets are located. If one probate is bad, you can bet that more than one probate is worse. In almost every case, probate is an awfully good thing to avoid.

How does a trust help me avoid probate?

Once assets are transferred to the trustee, the trustmaker no longer holds legal title to them—even if the trustmaker and the trustee are the same person. Thus, if the trustmaker dies, the trust continues, and the successor trustee (who is named in the trust instrument) takes over administering the trust. Since a trust can’t die the same way a person can, the trust assets will not be subject to probate upon the trustmaker’s death. Title to the trust assets simply remains in the trust, and the trust instrument tells the successor trustee (i.e., whoever the trust instrument identifies as next in line to serve as trustee) exactly what to do with them.

What is a conservatorship and can it be avoided?

Perhaps even more important than avoiding probate, a revocable living trust can avoid a conservatorship proceeding (sometimes called a “living probate”) in the event the trustmaker becomes incapacitated. Ordinarily, if a person becomes incompetent, a court must appoint a conservator to handle the person’s assets on his or her behalf. The conservator must then account to the court every year or so, and the whole conservatorship process ends up being costly and time consuming and almost always worth avoiding. On the other hand, if the incompetent person’s assets had been held in trust, the successor trustee could have stepped in—without court action—and picked up administration of the trust where the trustmaker left off. Conservatorships can also be avoided by ways of powers of attorney.

What is a power of attorney?

A power of attorney is a document in which give someone else the legal authority to act on your behalf. The agent named in your power of attorney is not a trustee, and your agent will not be held to as high a legal standard as would your trust if the agent were to make a mistake or do something you didn’t like.

Are there different kinds of powers of attorney?

Powers of attorney may be durable or non-durable, springing or evergreen, and general or limited. A durable power of attorney which continues to be effective even if the person who signed it (called the principal) becomes incapacitated. A non-durable power of attorney is revoked upon the principal’s incapacity. All powers of attorney are revoked upon the principal’s death. A springing power of attorney becomes effective upon the occurrence of some even on a date after it is signed. A typical trigger for a springing power of attorney becoming effective is the incapacity of the principal. An evergreen power of attorney, on the other hand, is effective from the moment it is signed until the principal either dies or revokes the power of attorney. A general power of attorney grants the agent broad authority to do just about whatever the principal could do with his or her property, whereas a limited power of attorney grants authority to deal with a particular transaction or subject matter.

What is the estate tax?

The estate tax is a tax on your failure to spend your last nickel at the same time as you exhale your last breath. The tax is imposed on the value of everything you own when you die (including life insurance proceeds and retirement plan death benefits, along with your house and everything else you would expect to be taxed). If you are a U.S. resident, the law gives you an exclusion from the Federal estate tax that enables you to shelter a certain amount of assets from the tax. This shelter, called the “applicable exclusion amount” (formerly known as the “unified credit,” if you are familiar with that terminology).

What are the chances that Congress will repeal the estate tax once and for all?

It is anybody’s guess what will happen to the estate tax, but one thing is for sure. Congress is not done tinkering with the estate tax law. Five years from now, the law will probably be very different from the way it is now, and “the experts” differ over whether the estate tax will ever actually be repealed. Many believe that we will end up with a relatively large applicable exclusion (perhaps $3,500,000; perhaps more), but that the estate tax is here to stay. All we know for sure is that we need to stay tuned for change in this area.

If I have a will, my family won’t have to deal with probate, right?

Having a will does not cause your estate to avoid probate. It may make probate simpler and less expensive, but it does not avoid the necessity of getting a court order for someone to have authority to administer your estate and carry out the terms of your will.

If I have a revocable living trust, do I still need a will?

The trustee of a revocable living trust administers only those assets that were transferred to the trustee. If you own something outside your trust when you die, the only way to get it into your trust after you’re gone (which may be very important if some of your beneficiaries are very young or unable to handle assets themselves), is to have a pourover will. A pourover will simply says, “I meant to put everything into my trust while I was alive; if I missed something, put it in there after I’m gone.” It is much better for you and your family to have all of your things in your trust during your lifetime, but since that doesn’t always happen, a pourover will can be a crucial safety net.

It is often difficult for individuals to think about the care and treatment they want in the event they are incapable of making their own health care decisions. However, completing an Advance Health Care Directive is important for all adults as they may unexpectedly be in a position where they cannot speak for themselves and run their  business and personal affairs, such as in an accident or in cases of severe illness.

A Reformation Of American Capitalism

Capitalism With Social Values

By Melvin J. Howard

The Great Depression was basically the same in the United States as other capitalist countries.  High unemployment, lower gross domestic product, and some kind of a government response to the depression were evident in all the capitalist countries. However, the United States took a different approach from the rest of the world powers in their recovery methods during the depression. Herbert Hoover was the president from 1928-1932 and had the first opportunity to publicly combat the depression.  His philosophy was simple when speaking of the American system. “It differs fundamentally from all others in the world.  It is the American system. It is just as definite and positive a political and social system as has ever been developed on earth.  It is founded upon the conception that self-government can be preserved only by decentralization of Government in the State and by fixing local responsibility; but further from this, it is founded upon the social conception that only through ordered liberty, freedom and equal opportunity to the individual will the initiative and enterprise drive the march of progress. This is not what the American people wanted to hear at this time a self sufficient individualism” speech when many families could not even afford to put food on the table.  

Hoover created the Federal Farm Board to try and improve farm prices. This agency would sometimes pay farmers to not grow crops to try and raise demand. As soon as the prices started to show some rebound, farmers would plant crops again against the federal government’s wishes.  The prices would never correct without production and open foreign markets. He closed foreign markets for agricultural products.  In the 1920’s, markets in Europe for grain were tremendous, but because of the tariffs on American goods, many countries could not afford them and turned to other suppliers.

By then the recession had grown into a full-blown depression. Much worse, the depression’s was just getting started. Now it was Franklin D. Roosevelt (FDR’s) turn he was president from 1932 until his death in 1945.                         

He was the next American president that had an opportunity to deal with the depression. “Restoration calls, however, not for changes in ethics alone. This nation asks for action and action now….It can be helped by national planning for and supervision of all forms of transportation and of communications and other utilities which have a definitely public character. FDR and his advisers believed that Hoover had the right idea, but they wanted to do more than just follow Hoover’s lead.  FDR’s first New Deal had two very controversial pieces that tried to stimulate the American economy.  The first one was the National Industrial Recovery Act of 1933.  To try and gather an understanding of this act, here is an excerpt.

To provide for the general welfare by promoting the organization of industry for the purpose of cooperative action among trade groups, to induce and maintain united action of labor and management under adequate governmental sanctions and supervision, and to eliminate unfair competitive markets. This act has some definite socialist overtones.  FDR wanted the federal government to be very involved in the public’s lives.  The Agricultural Adjustment Act was the other controversial piece that basically attempted to collectivize the farming industry to control prices.  This was modeled after Hoover’s FFB, but it had more controls does this sound familiar? 

Both leaders realized that something needed to be done to help the American people.  That has been proven.  Hoover attempted to stimulate the economy with tariffs and FDR attempted to with price and wage controls through the first New Deal.  While evaluating the recovery programs of the two leaders, it is important to keep the American people’s needs at the top of the list.  With that being said, neither leader kept the basic necessities of the American people in mind when trying to fix the depression.  Food, water, shelter, and heat are things that people need to survive.  Fields of crops were being plowed under while people were starving to try and fix low prices.  

History shows that a capitalist economy needs time to crawl out of a depression.  The political divisions like the one we are witnessing now prolonged the depression in the United States until WWII when twelve million men were sent overseas.  Most of the world countries climbed out of the depression sooner than the United States, so, in essence, political economic formulas prolonged the depression in the United States. 

Too much wealth landed in the hands of too few people. An article by Ross L. Finney offered a dire prediction in early 1924: "Unless we shift our weight Western civilization will enjoy an illusive prosperity and greatness for a time, but will then stagger, stumble and eventually collapse" (January 24, 1924).

Some 19 months before the crash of the market, editorials scrutinized the problem of unemployment with a growing sense of urgency. In the face of this "orgy of speculation," editors argued, religion must "protest a social or industrial order in which men wallow in sudden wealth which they have not created while their fellows by the million face want" .The speculation of the capitalist market allowed for an accumulation of "undigested wealth" and the separation of means from ends Wall Street had divorced wealth from activities that led to employment. In addition, machines had invaded the workplace and massively displaced human labor.

This antagonism toward capitalism surfaced regularly after October 1929. Given its socialist sensibilities, there were many people that interpreted the crash of the stock market as an opportunity to begin a new form of capitalisms. People could no longer ignore the growing and devastating problem of unemployment. This awareness opened the door to social solutions most Americans would have rejected as unacceptable only a few years before. Editorials supported legislation designed to account for the unemployed, to establish public works projects to enable their return to work, to provide for newly unemployed through a national unemployment insurance program, and to create a national bureau of unemployment to stay on top of the problem.

The crash of the market also offered Americans the opportunity to reflect on a new understanding of the problem of greed. Americans, said some editorials, have been too quick to condemn racketeering, "the poor boy’s easy road to quick wealth," while ignoring ways "the son of a comfortable home seeks to make his pile and make it quickly". In addition, the country’s obsession with its "standard of living" had to be balanced against the needs of the rest of the world. Standing pat on the traditions under which the present absurd inequities have grown up” would not solve problems like these, concluded. Editors grew impatient with President Hoover’s unwillingness to use federal means to address the social crisis. Hoover urged private charities, and the organizations of local communities where hunger existed, to step up to meet the need. Many people judged the president’s response entirely inadequate. His fear of the dangers associated with the federal "dole," argued editorials, ignored the fact that poverty emerged more from the defects of the system than from the "personal shortcomings of the sufferers.

The depth of the depression demanded a federal response, one that would establish a "permanent deposit of advanced social legislation." Hoover, to the growing dismay of editors, ruled such legislation out of bounds. "How bad must things become," asked one editorial, "before the nation is ready" to enact legislation?  Hoover’s local-community approach would "prove to be not only tragically inefficient but scandalously inequitable". Roosevelt’s landslide victory was a sign that Hoover got it wrong in some people’s eyes. Once elected, and once the extent of his program to deal with the depression became evident, Roosevelt quickly gained enthusiastic endorsement. With 16 million people out of work, editors declared Roosevelt’s "readiness to experiment with new policies his greatest asset and the nation’s greatest ground of hope". As Roosevelt exercised emergency power to deal with the banking crisis, revise the relationship between American currency and gold, and establish the Tennessee Valley Authority, editors hailed the arrival of "a new United States.

Editors interpreted the administration’s orchestration of the national recovery act as a commitment to graft socialistic principles into the American capitalist system.

This philosophy of "socialized capitalism" encouraged the idea that "business exists for the community" instead of "the principle that a business exists for itself, that is, for the profits it can make for its owners. But editorials simultaneously noted that the National Recovery Administration (NRA) depended too much on voluntary compliance. Ultimately, Roosevelt’s new system set no restrictions upon profits. And here it necessarily faltered. "Can human nature which has been so long conditioned by the stimuli of capitalism," discipline itself while still subject to the same stimuli, to the point of curtailing its greed for profits when profits are to be had?"

In addition to anxiety about the overwhelming influence of the profit motive, many also worried about whether the power of labor organizations could develop rapidly enough to counter the autonomous industrial associations. Small businesses also tended to suffer under self-regulation provisions that favored the efficiency of the mass-producing abilities of larger businesses. This weakness surfaced more clearly as time passed. Editors also knew that the extension to the South of NRA codes mandating minimum wages would likely cause displacement of black workers without creating an effective remedy.

At a time when the vast majority of clergy in America disapproved of Roosevelt’s New Deal reforms. By 1937, many aspects of Roosevelt’s New Deal had successfully taken root. Labor gained strength. Legislative checks against the worst abuses of big business seemed securely in place. Social Security provided unemployment and pension insurance. Welfare programs eased the suffering of the poor. Roosevelt’s domestic policy had produced a reformation of American capitalism.