In Defense of Corporations; They Revolutionized the World

During the years President Obama has been in office, corporations have been vilified.

It goes without say that corporations, like individuals, can behave badly and even criminally. But without corporations, there would be no modern America as we know it. It is not an overstatement to say that the "corporate form" allowed American business to produce the greatest economy that the world has ever known.

The corporation is not a modern invention. It was recognized in Roman Law in the Code of Justinian (reigned 527-565). The Dutch chartered the Dutch East India Co.; Charles II, the Hudson Bay Co. But such corporations were created by Royal or parliamentary grants.

In 1844, William Gladstone (England) and his Parliamentary Committee on Joint Stock Companies produced the Joint Stock Companies Act of 1844. It allowed establishing of a company as a separate legal person. The advantages largely were administrative; the act allowed creation of a unified entity to handle the affairs of the investors. It could sue and be sued just like a natural person. No longer did all the shareholders have to be named as plaintiffs, and no longer did all have to be individually named and served with process to be made defendants. The corporation also could buy, sell own and mortgage property.

It was not until 1855, however, that the English Parliament passed the Limited Liability Act that allowed investors to limit their liability in the event of business failure to the amount they had invested in the company, Shareholders now were liable directly to creditors only to the the extent that they had not paid for their shares in full. New York had passed a limited liability act for shareholders in 1811, but only to shareholders in "manufacturing" corporations.

These laws taken together allowed the financing of the Industrial Revolution. No longer did investors have to wheedle a royal or parliamentary grant. For the first time in history, it was possible for ordinary people to create a "corporation" through a simple registration procedure. Corporations now could have a perpetual existence. The business no longer had to "wind up," as in the case of the death of a member of a partnership. The business could sue and be sued. It could buy, sell, own and mortgage property as if it were an individual. Finally, English investors could pool funds to raise the giant pools of money needed to create railroads, steamship lines and great manufacturing concerns.

Limited liability meant that an investor could choose to risk a portion of his net wealth, without fear that if the venture went bankrupt the rest of his fortune would be seized to pay the debts of the venture. This was also fair to the creditors of the corporation because they knew up front the "authorized capital" of the business -- the total pool of money put at risk by the stockholders.

While there were earlier corporation acts in America, the Delaware General Corporations Act of 1899 has been the model for other such acts in the county.

It allowed any three or more persons to establish a corporation for the transaction of any legal business.

The Delaware Act of 1899 gave corporations the following powers:

1. To have a perpetual existence;

2. To sue and be sued;

3. To hold, purchase, mortgage and convey real and personal property for its corporate purposes;

4. To appoint officers and agents as required for its business purposes, and to suitably to compensate them;

5. To make bylaws fixing the number of directors to manage the affairs of the corporation.

The Certificate of Incorporation was required to (a) state the name of the corporation, (b) its principal place of business, (c) the nature of the business to be transacted, (d) the total authorized capital stock of the corporation (not less than $2000), (e) when the corporation was to commence operations, (f) whether its existence was limited or perpetual, and (g) whether the private property of stockholders shall be subject to the payment of corporate debts, and if so to what extent.

In a further effort to protect creditors, the corporation was barred from paying stockholders a dividend except out of surplus or net profits, and required to make accurate financial reports.

The advantages of the corporate form are obvious. When an individual dies, his business ends. When a partner dies, the partnership is dissolved, and a new partnership has to be set up, if the business is to continue. When a shareholder or a director of the corporation dies, the business goes on.

When an individual opts to go into business as an individual, he not only exposes his investment to creditors, he also exposes his entire wealth to their claims. The same is true of a traditional partnership or tradition joint venture. (Yes, there can be limited liability partnerships).

Limited liability allows the corporation to go to hundreds, thousands or even ten thousands of investors to raise the enormous sums necessary to finance an airline, a canal or even a company to put privately-owned satellites in orbit.

A corporation can abuse the powers granted to it. But so can a person, a partnership, an association or a government. Corporations aren't perfect because they are run by people. But at their worst, they have never been as bad a governments (e.g., Hitler's Germany and Stalin's Russia).

Without them, America would not have great railroads, airlines, auto companies, computer companies and charitable foundations. And we might well have lost World War II.

Today it is fashionable to be against allowing corporation to make political donations and expenditures. But corporations are people: managers, employees, and stockholders.

When individuals, associations, unions, PACs and the government speak against corporations and demand laws that control how corporations do business, basic fairness requires that corporations have the right, on behalf of themselves and their directors, stockholders, employees and customers, to make corporate expenditures and support politicians who are sympathetic to the their interests and those of their stockholders, customers and employees. Just because a person is employed by a corporation, he doesn't surrender his right of free speech if he happens to speak for a corporation.

If corporations speak falsely, the preferred 1st Amendment remedy is not to bar them from speaking; it's counter-speech to expose their falsehoods.

Posted Online:  May 06, 2014, 11:00 pm - Quad-Cities Online
by John Donald O'Shea

Copyright 2014
John Donald O'Shea

Congress, not Court, Opened Big-money Floodgate

For liberals/progressives, the U.S. Supreme Court's Citizens United decision is the devil incarnate. Articles and letters litter these pages erroneously claiming that the court's 2010 decision "allowed unlimited money to flow to super PACs."

But that is not what Citizens United held. Nor is it what Citizens United was all about. It is a pathetic mischaracterization by people who either haven't bothered to read the case or, if they had, were clueless as to what they were reading. Justice John Paul Steven's dissenting opinion (in which all four liberals concurred) made this unmistakably clear.

"The real issue in this case concerns how ... (Citizens United) may finance its electioneering. Citizens United is a wealthy nonprofit corporation (not a PAC) that (also) runs a political action committee (PAC) with millions of dollars in assets. Under the Bipartisan Campaign Reform Act of 2002 (BCRA), it could have used (the PAC's assets) to televise and promote 'Hillary: The Movie' wherever and whenever it wanted to. It also could have spent unrestricted sums to broadcast Hillary at any time other than the 30 days before the ... primary election. ... All that the parties dispute is whether Citizens United had a right to use the funds in its general treasury to pay for broadcasts during the 30-day period."

Justice Steven's remarks make crystal clear that Citizens United was not about allowing unlimited money to flow to super PACS. It was about allowing ordinary corporations that were not political action committees to use "funds from the general treasury," to engage in political speech without pre-approval from the Federal Election Commission or any other government entity right up to the election.

The Citizens United corporation (not a PAC) sued to void the ban on "independent expenditures" by the corporation saying it violated the First Amendment.

In January 2008, Citizens United released "Hillary: The Movie," a 90-minute documentary about then-Sen. Hillary Clinton, a 2008 Democrat presidential primary candidate. It depicts interviews with political commentators and other persons, most quite critical of Sen. Clinton. It was released in theaters and on DVD, but Citizens United wanted to make it available through video-on-demand within the 30-day time period prohibited by FEC rules made pursuant to campaign reform law.

At trial, the U.S. District Court had found "there is no reasonable interpretation of Hillary other than as an appeal to vote against Senator Clinton." It was "susceptible of no other interpretation than to inform the United States would be a dangerous place in a President Hillary Clinton world, and that viewers should vote against her."

Again in the words of dissenting Justice Stevens, "Under the Bipartisan Campaign Reform Act of 2002, (Citizens United) could have used (its PACs assets) to televise and promote Hillary ... wherever and whenever it wanted to. As such it was the BCRA itself -- and not the Supreme Court -- that allowed PACs to spend 'wherever and whenever it wanted to' except during the 30 days before the election. Citizen United simply gave corporations that were not PACS the same rights as BCRA gave corporations that were PACs, as well as striking down the '30 day period' prohibition."

To repeat, Citizens United was about allowing a corporation, not a PAC, to engage in political speech at any time without government pre-approval.

What liberals have made no effort to understand is that while PAC corporations and media corporations were allowed to "speak" by BCRA, business corporations and unions were prohibited from speaking (from making expenditures for "electioneering communication" or for speech "expressly advocating the election or defeat of a candidate") at any time. The Supreme Court simply held that business corporations, and unions, have the same political rights under the First Amendment as corporate PACs.

The court noted that media corporations (radio, TV and cable) have "immense aggregations of wealth," accumulated "with the help of the corporate form." The court's holding gives non-media corporations the same right of free speech as media corporations. In doing so, the court noted the perversity if BCRA:

"The law before us is an outright ban, backed by criminal sanctions. Section 441b makes it a felony for all corporations -- including nonprofit advocacy corporations -- either to expressly advocate the election or defeat of candidates or to broadcast electioneering communications within 30 days of a primary election and 60 days of a general election."

Thus, the following acts would all be felonies under that section: The Sierra Club runs an ad, within the crucial phase of 60 days before the general election, that exhorts the public to disapprove of a congressman who favors logging in national forests; the National Rifle Association publishes a book urging the public to vote for the challenger because the incumbent U. S. Senator supports a handgun ban; and the American Civil Liberties Union creates a website telling the public to vote for a presidential candidate in light of that candidate's defense of free speech. These prohibitions are classic examples of censorship."

Yet at the same time, BRCA permitted PACs, non-corporate billionaires, and corporate mega-media conglomerates to do the same.

The bottom line of the court's analysis is this: The First Amendment "'has its fullest and most urgent application' to speech uttered during a campaign for political office. ...

"Discussion of public issues and debate on the qualifications of candidates are integral to the operation of the system of government established by our Constitution."

In a country where special interest groups can use their wealth and speak on behalf of candidates who promise to pass laws to ameliorate perceived "corporate excesses," corporations must be able to speak to defend themselves, and to oppose candidates and legislation that they see as destructive of their interests and the public interest. If the President can vilify corporations, the First Amendment " requires that they have an equal right to vilify him.


Posted Online:  April 22, 2014, 11:00 pm - Quad-Cities Online
by John Donald O'Shea

Copyright 2014
John Donald O'Shea

How Much is Enough to Keep our Nation Safe?

It is a sad fact of history that the only thing worse than spending too much on a nation's armed forces, is spending too little. Excess spending wastes the nation's scarce resources. Inadequate spending can waste the whole nation.

In the 11-year period from 1930 through 1940, the U.S. spent $19.9 billion on our military and naval establishments, or about $1.8 billion per year. That averages to about 11.5 percent of the nation's total spending for each of those 11 years.

That level of spending was not sufficient to keep Japan from attacking us at Pearl Harbor in December 1941, or to prevent Germany from declaring war on us a few days thereafter.

Many in Japan felt that Japan could defeat America. Other Japanese felt they could, but only if they could defeat us in a short war; if they could break our will to fight further. That was the gamble behind Pearl Harbor -- beat America before it could bring its industrial might to bear.

In the days before World War II, those in charge of military and naval planning for the "great powers" realized that it took significant time for a nation to gear itself up to a "war-footing." Winston Churchill in "The Gathering Storm" spelled it out:

"... [M]unition production on a nation-wide plan is a four year task. The first year yields nothing; the second very little; the third a lot, and the fourth a flood. Hitler's Germany in this period was already in its third or fourth year of intense preparation under conditions ... which were almost the same as war. Britain, on the other hand, had only been moving on a non-emergency basis, with a weaker impulse, and on a far smaller scale. In 1938/38 British military expenditures of all kinds reached 304,000,000 pounds, and the German was at least 1,500,000,000 pounds."

In 1938, the British pound was equal to 3.223 American dollars. Accordingly, at a time America was spending $1.7 billion on its military establish, Germany was spending $4.8 billion. Had Germany won the Battle of Britain (July 10-Oct. 31, 1940) -- and it was a close run thing -- Germany may well have won the war before America was even in it. Had Britain fallen, the entire German war machine could have focused on the USSR. Had Britain surrendered, the U.S. would have had no England from which to launch the Normandy invasion.

Admittedly, things are different today. Today a nuclear war can be won or lost in a matter of hours. But because nobody had nuclear weapons in 1941, America had four years to convert its vast industrial base to a war-footing. Then, all those economies achieved from 1930 through 1940 were wiped out in a blizzard of war spending.

In 1941, the U.S. spent $7.2 billion or 30 percent of total spending on its military. In 1941, $27.1 billion or 59 percent. In 1942, $70.4 billion or 78 percent. In 1944, $86.1 billion or 78 percent and in 1945, $93.7 billion or 79 percent. During that five-year period, the U.S. spent $284.5 -- 14.3 times as much as it spent in the 11-year period during the1930s!

The question is, had the U.S. spent $5 billion per year from 1930 through 1940 (which included Depression years), would Germany and Japan have dared to go to war with U.S.? Rather than spending $55 billion over that 11-year period, we economized" The result was WWII. Had we spent $5 billion per year over the 16-year period beginning in 1930, we would have spent $80 billion on our defense. Instead, we spent $305 billion and sacrificed 418,500 American lives. Indeed, had we spent $10 billion a year over the 16 year period, it would have cost only $160 billion and probably no American lives. Germany and Japan would have realized it was suicidal to make war on our country.

Winston Churchill wrote his six-volume history of WWII so democracies would not repeat the follies that led to WWII.

"It is my purpose, as one who lived and acted in these days, first to show how easily the tragedy of the Second World War could have been prevented; how the malice of the wicked was reinforced by the weakness of the virtuous; how the structure and habits of democratic states, unless they are welded in larger organism, lack those elements of persistence and conviction which can alone give security to humble masses; how, even in matters of self preservation, no policy is pursued even ten or fifteen years at a time. We shall see how the counsels of prudence and restraint may become the prime agents of mortal danger; how the middle course adopted from desires of safety and a quiet life may be found to lead direct to the bull's eye of disaster. We shall see how absolute is the need of a broad path of international action pursued by many states in common across the years, irrespective of the ebb and low of national politics." -- Churchill's "The Gathering Storm"

The only foreign policy that makes sense is for America to be so strong that all potential enemies realize that war with America means their destruction. Anything less bids fair to embroil us in mortal conflict. In 2013, the U. S. spent $819.5 on our national defense. That is 13 percent of our entire national spending. But excluding $161 billion for personnel pay and housing, the U.S is spending 10.4 percent on national defense; 11.5 percent wasn't sufficient to keep us out of WWII.

Will 10.4 percent be enough? That is the question.

Posted Online:  April 10, 2014, 11:00 pm - Quad-Cities Online
by John Donald O'Shea

Copyright 2014
John Donald O'Shea

College Athletes? NLRB to the Rescue??

Northwestern University has just been advised by Peter Ohr, regional director of the National Labor Relations Board that its football players are "employees" first and "students second."

According to ESPN, "If (Ohr's) decision is upheld, it will give players at private universities a voice in the management of their lives as athletes and students. It will qualify players for workers' compensation benefits for injuries that occur during their playing careers, benefits that will cover them well into their futures. Instead of coaches issuing schedules and setting rules for their private lives, the players and their union will bargain for their working conditions in the same way NFL and MLB players bargain for benefits. And, although the Northwestern players say they are not interested in payments for their efforts, the formation of a players' union will open the way to salaries for athletes in football and men's basketball."

Mr. Ohr's opinion focused on the number of hours Northwestern players allegedly devoted to football and to the control coaches have over their lives. But while Northwestern players play football, they also graduate.

At the Division I level, the football Graduation Success Rate, admittedly, varies from university to university. But it simply is untrue to say -- at least for universities like Northwestern, Notre Dame and Stanford -- that "the student-athlete is a cherished, long standing American myth, which retains a modicum of validity only at non-scholarship colleges." It is also a canard to make a blanket statement that at the Division 1 level, athletes are treated like chopped-meat.

Northwestern's NCAA Football Student Graduation Rate was a best in the nation 97 percent. It was followed by Rice at 95 percent, Notre Dame and Boston College at 94 percent, Air Force and Stanford at 93 percent, Duke at 92 percent and Boise State at 91 percent. And at Northwestern, Notre Dame and Stanford, the football players take the same classes as the rest of the student body. There are no "special" courses for "jocks." To minimize their student-status is to falsely denigrate their success.

But scholarship football players are only a part of the story. Notre Dame, for example, has 22 men's and women's sports that show up in the NCAA's Student-Athlete Graduation Rate Survey. In 20 of its 22 programs, Notre Dame graduated 100 percent of its student-athletes. Indeed, the NCAA's figures released on Oct. 24, 2013, show that all 11 Irish women's programs posted a GSR of 100 percent -- basketball, cross country/track, fencing, golf, lacrosse, rowing, soccer, softball, swimming/diving, tennis and volleyball.

Among Notre Dame's men's sports, baseball, basketball, cross country/track, fencing, golf, hockey, soccer, swimming/diving and tennis achieved 100 percent GSR scores. Men's lacrosse scored 96 percent and football 94 percent.

The cost of going to the colleges listed here isn't cheap. Northwestern's 2013-14 tuition, fees, room and board were $57,108. Notre Dame's were $57,117; a full, one-year athletic scholarship to either institution is worth just under $60,000. Moreover, the football players and other scholarship athletes get first-rate educations. And when a player gets hurt at Northwestern or Notre Dame, they don't lose their scholarship; moreover, they get the best medical care available. And of course, they are coached-up to play at the highest level, which for at least a few leads to a lucrative pro career.

So, would your son do better if instead of taking an athletic-scholarship to play football at Northwestern, he opted to play minor league baseball? Hardly. A first-year player in the Rookie League earns $1,150 per month; $1,300 at Low A; $1,500 at high A. Additionally, they get a $20 per day meal allowance during the season while on the road. Therefore, a rookie-level minor leaguer earns about $10,500 per year.

A full-time minimum wage worker earns about $20,000 per year and pays taxes. A football player at Northwestern earns $60,000 per year, plays and gets coached-up in the game he loves, and gets the best education in the world while his tuition and books are tax-free income.

For the Reporting Year Sept. 1, 2012-Aug. 31, 2013, Northwestern's Total Football Revenues were $30,143,982; expenses were $21,722,796. On its face, Northwestern appears to have made big profit of $8,421,186 from its football program. Its men's basketball team also generated a profit of $6,667,910. But those were the only profitable sports programs.

Women's basketball, fencing and field hockey, lacrosse, softball, track-field-cross-country and volleyball, as well as men's baseball and wrestling, and men's and women's golf, soccer, swimming and diving and tennis were big losers. The combined net loss for those sports was (revenues of $1,972,700 less expenses of $16,275,194) was $14,302,494.

The bottom line is that Northwestern's profits from football and men's basketball finance the other male and all women's sports.

Mr. Ohr looks at the more than $8.4 million generated by the football program and sees money that could be used to pay the football players and afford them other benefits. His ruling, however, ignores the fact that the university's football (and men's basketball) earnings fund the whole Northwestern sports program. Without football and men's basketball revenues, women's sports and other men's sports cease to exist, unless the university chooses to fund them with tuition or other resources

ESPN notes, "The decision in the Northwestern case affects only private universities. Any attempt by players to form a union at ... Ohio State, or Nebraska, would be governed by the specific state's laws on unions of public employees (teachers, firefighters, police)."

Can the NCAA live with a scheme where private universities can award incoming football player a $60,000 scholarship plus a $250,000 signing bonus and a salary, while state universities are limited to giving only a scholarship worth about $60K? Will private universities find themselves expelled from the NCAA if they do?

Once players unionize and bargain for "compensation," won't that compensation become taxable just like other "bargained-for income?" What about union dues?

The issues I raise are only the first of the unintended consequences -- one of which might well be a strike in lieu of the football season or the national championship game.

Posted Online:  April 5, 2014, 11:00 pm - Quad-Cities Online
by John Donald O'Shea

Copyright 2014
John Donald O'Shea

Hang Onto Your Wallets, Here they Come Again!

Progressive? Liberal? It doesn't matter. These guys have never met a tax increase they don't like. So, hang onto your wallets! Here they come again!

In case you missed it, in January 2011, Democrats in the Illinois Legislature raised the state income tax on individuals 66 percent -- from 3-5 percent -- and Illinois' corporate income tax to 9.5 percent. Not one Republican voted for the increases.

Democrat Gov. Pat Quinn ecstatically signed the tax increases into law. The increases have generated between $7 billion and $8 billion each year since, all of which has been ripped from the pockets of taxpayers. And of course, if Speaker Michael Madigan was to be believed, those tax increases were "temporary!"

What good did it do? These days, the only way Illinois can keep big businesses from leaving the state, and bring new ones in, is to bribe them with incentives. Big corporations, who provide jobs, don't like paying 9.5 percent corporate income taxes.

Have all these tax increases helped the state's credit rating? Hardly.
Here is what the Chicago Tribune reported on June 6, 2013:

"Moody's Investors' Service on Thursday downgraded Illinois' general obligation credit rating by one notch -- to the lowest rating in the state's history -- following a move earlier this week by Fitch Ratings.

"Moody's downgraded Illinois' $27 billion of general obligation debt to A3 from A2, with a negative outlook after state lawmakers last week failed to pass a plan to deal with a $100 billion unfunded public pension liability."

And on March 14, 2013, Huff Post Chicago headlines, "Illinois budget deficit worst in the nation: State is reportedly $43.8 billion in the red," based on a report issued by Illinois Auditor General William Holland. Mr. Holland states that "the state's overall budget deficit has more than doubled in the past five years."

The audit analyzed the Illinois Comptroller's comprehensive annual financial report which lists all state government assets and liabilities for fiscal year 2011.

When Democrats rammed through the 2011 tax increases, then-House Minority Leader Tom Cross, R-Oswego, said, "It's a cruel hoax to play on citizens to say this is temporary."

Two years later, as if to prove Tom Cross a prophet, Rep. Lou Lang, D-Skokie, a top House Democrat, said, "The state's temporary income tax increase from 2011 should become permanent. ... I think most legislators in this building, even those who will never vote to extend that income tax increase, would tell you we need the dollars."

Now Democrats are not even satisfied with that; they want a graduated income tax for Illinois. A coalition delusionally calling itself "A Better Illinois" is leading the charge.

"If Illinois were to adopt the same graduated income tax rate structure as Iowa, Illinois would raise $6.3 billion more in revenue than it does from its current five percent flat rate, while 54 percent -- over half -- of all taxpayers would pay less in state income taxes," from The Case for Creating a Graduated Income Tax in Illinois.

But if 54 percent of taxpayers would pay less, the 46 percent who pay more will have to pay the additional $6.3 billion PLUS billions more to make up for what the 54 percent who will be paying less won't be paying!

And look who is supporting this newest effort to plunder productive citizens -- the usual suspects! Indeed, at their March 19, meeting 17 of out 25 esteemed Rock Island County board members -- ALL DEMOCRATS --at the urging of state Rep. Mike Smiddy, D-Hillsdale, voted to support the campaign to put the proposal for a graduated state income tax on the November ballot. The five Republican members had the good sense to vote no!

And look who else is supporting putting on the ballot the extra $6.3 billion tax increase (on top of the billions approved in 2011. DEMOCRATS)! They include state Sen. Mike Jacobs, D-East Moline, with his bland, "the voters will ultimately decide."

When does it end?

Moline aldermen in December 2013 approved sewer rate increases for each of the next five years. The public schools just unsuccessfully sought a 1 percent increase in the sales tax. The county wanted and didn't get a .25 percent increase in the sales tax for the sheriff. The county is expected to vote in November for a tax increase to support Hope Creek Care Center.
And in Washington, the president never tires of demanding that the "rich" pay their fair share ("fair share" equals "more").

If this keeps up, Illinois will go the way of the bankrupt city of Detroit. If this keeps up, the productive and vilified "rich" will head south. Corporations will continue to choose not to locate here without being incentivized (bribed) to do so (and yes, you and I are taxed to provide those incentives!).

The tax-and-spend Democrats and their beloved taxes are wrecking the country, the state and the county. And if you doubt me, here is what President Obama said in his 2014 State of the Union Address:

"Average wages have barely budged. Inequality has deepened. Upward mobility has stalled. The cold, hard fact is that ... too many Americans are working more than ever just to get by; let alone to get ahead. And too many still aren't working at all."

Posted Online:  March 26, 2014, 11:00 pm - Quad-Cities Online
by John Donald O'Shea

Copyright 2014
John Donald O'Shea

Why Majority Can't Do Anything it Wants

In a democracy, what are the rights of the majority? Does the minority have any rights? In November of 2013, Senate Majority Leader Harry Reid and his Democrat cronies in the U.S. Senate answered that question in a way that should send chills up the spine of every American.

Sen. Reid, D.-Nev., and the Democratic majority changed the rules of the Senate by a majority vote. Fifty-two Democrats and independents voted to partially abolish the filibuster. The change reduces the threshold from 60 votes to 51 for Senate approval of executive and judicial nominees to lower federal courts.

The Republican minority was unanimous in its opposition to the change. Republicans were joined by three Democrats -- Mark Pryor D-Ark., Joe Manchin, D-W.V., and Carl Levin, D-Mich. The rule change does not apply to Supreme Court nominees, who are still subject to a 60-vote filibuster threshold, or to legislation.

Reid's justification was simple: "The American people believe Congress is broken." Translated: "We are the majority; the majority rules." Further translated: "Power makes right."

Were Reid and the Democrats right? In America, should the majority party be able to run the country by majority vote? Are you for "pure Democracy?" After all, the voters, gave the Democrats a majority in the U.S. Senate.

But go back in time to the first two years of the Obama administration, when the Democrats, besides controlling the presidency and the Senate, also controlled the House. If you believe that 51 (of 100) senators and 218 (of (435) representatives should be able to pass whatever law they deem necessary or convenient, how would you feel if 51 senators and 218 House members passed any of the following laws?

-- Re-instituting slavery?

-- Making it illegal to be a Catholic or a Baptist?

-- Stripping Jews of citizenship?

-- Prohibiting American families from having more than one child?

-- Providing for the sterilization of all illegal immigrants found inside the United States?

-- Making it criminal to be a member of the Republican Party?

-- Directing extermination of all mentally disabled persons?

-- Denying tax exemption to "tea-party affiliated" groups? Or "progressive" groups?

-- Suppressing Fox News and CNN? Or putting monitors in their newsrooms to ensure their news reports are "favorable to the president, his party and his friends"?

If the rule is majority rules, what protects the minority? Where does the minority hide?

Lord Acton has written, "The one pervading evil of democracy is the tyranny of the majority..."

Our Founding Fathers tried to give America a maximum of democracy short of mob-ocracy. They feared the "mob." They feared the excesses of "pure democracy." That is why, rather than creating a pure democracy, they created a representative republic of limited powers, and further hamstrung it with a Bill of Rights, calculated to put certain powers beyond the reach of the majority.

Harry Reid, to the contrary, our Constitution is not "broken." It is a document replete with checks and balances -- intentionally built in -- to limit the power of the transient majority and the chief executive so as to safeguard personal liberty and property.

James Madison summed it up in Federalist Paper No. 10: "Democracies have ever been found incompatible with personal security or the rights of property; and have, in general, been as short in their lives as they have been violent in their deaths."

And if there is danger in unfettered mob rule, there is equal danger in government by executive orders and decrees. Our Constitution was adopted to bar both.

It is for that reason that no law can be passed by the president. It is for that reason that no law can be passed by the House or Senate alone. Indeed, it is for that reason that Article I, Sec. 1 of the Constitution provides "All legislative powers herein granted shall be vested in Congress of the United States, which shall consist of a Senate and House of Representatives," and why Congress is granted power "To make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this constitution in the government of the United States, or in any department or officer thereof."

And it is why the president takes an oath that he "will faithfully execute the office of the President of the United States, and will to the best of my ability, preserve, protect and defend the Constitution of the United States."

And it is why the Constitution and the Bill of Rights bar the president, the Congress and even the courts from engaging in certain actions destructive of the liberty of the individual citizen.

Posted Online:  March 19, 2014, 11:00 pm - Quad-Cities Online
by John Donald O'Shea

Copyright 2014
John Donald O'Shea

New Tax Won't Add up to Better Schools

Exactly how much money does it take to educate a student in the public school system?

We are repeatedly told "our kids deserve the best!" But what does the "best" cost? Will another $11.5 million do it? Guarantee it? Moline School District 40 tells us that its 2012 cost per student was $9,488.46.

At the same time, the county can't afford to replace a century-old physically and functionally obsolete courthouse, and is expected to ask for a tax increase to save its nursing home. The American economy stinks, and here comes one more special interest group telling us that our kids will be better off if only we pay an additional 1 percent sales tax. I doubt it!

Moline School District 40's financial statements show:

"Total governmental fund revenues for the fiscal year ended June 30, 2012, of $86,634,518."

"Total governmental funds expenditures for the fiscal year ended June 30, 2012, of $85,333,855."

Not content with that $86.6 million in revenue, a special interest group calling itself, "YES Makes Cents for Students," wants Rock Island County voters to impose a 1 percent sales tax "to provide a better and safer learning environment and to reduce reliance on property taxes." The 1 percent will raise $11.5 million, about $3.8 million of which would go to the Moline schools. In consideration for that increase, the district promises to reduce the real estate tax levy by $400,000. As such, the net tax increase for the people of Moline would be $3.4 million.

In short, the "Yes" people want $90,034,518 to run the Moline schools. The group also blithely claims taking $11.5 million out of the private sector will somehow "boost the local economy." But this isn't $11.5 million for just one year. It's $11.5 million every year!

The Moline School District's financial report also states, "Moline School District No. 40 serves 7,438 students with a 2011-12 total governmental fund budget of $102,556,230." In 2012, there were 47,457 men, women and children in Rock Island County. An $11.5 million tax increase means every man, woman and child's share of the tax will be $78 per year -- year after year.

Therefore, as during the fiscal year ending June 30, 2012, there were 7,438 students, including high school students, in the Moline School system. By simple division, the cost of educating each student was $11,472 ($85,333,855/7438 = $11,472). A $3.4 million tax increase means the Moline schools can spend $90,034,518 or $12,105 per child ($90,035,518/7438 = $12,105). And yes, I question the district's $9,488.46 per student figure.

So, why isn't $86.6 million enough? Why isn't $11,472 per student enough?
According to the district's figures, the 2011-12 student/teacher ratio was 16.15 students per teacher. Taxpayers, therefore, are already spending $184,699 per year to educate the 16.15 kids in each class.

Do the "Yes" people really expect us to believe that if we spend an additional $457 on each Moline child, it will boost the local economy? Provide a better and safer learning environment? At a time when the district barges ahead with the Hamilton School expansion over public objection, how can there be any trust on their promise to permanently reduce real estate taxes? And in the $86.6 million they already have, is there no $3.4 million that could be put to better use?

In the 2012-13 school year, the Moline School District was very "average." It ranked 222 out of 480 (top 46 percent). Only 50 percent of Moline High School graduates meet or exceed the ACT College Readiness Benchmark (defined by an ACT composite of 21 or higher).

Maybe it is time for the public school systems to take an open-minded look at private/Catholic school achievement.

Alleman's 2012-13 enrollment was 457 students. Its student-to-teacher ratio was 17:1. Ninety-eight percent of Alleman's graduating seniors went on to college or joined the military. Over 70 percent of Alleman's 2013 graduates met or exceeded the ACT College Readiness Benchmark. The average composite ACT score for 2012-13 was 23.1.

Alleman's Total Operating Fund Revenues for the 2012-13 year was $2,931,209. Its Total Operating Fund Expenses were $2,959,045. Alleman spent an average of $6,565 per each of its 457 students. And as far as I know, Alleman has football, baseball, softball, soccer, golf, volleyball, tennis, drama, orchestra, etc., just like the "public schools."

Why does it cost $11,472 to educate a student in the public schools, and only $6,565 to do so in a Catholic school? It is rather difficult to argue that Alleman isn't giving more bang for the buck.


Posted Online:  March 09, 2014, 11:00 pm - Quad-Cities Online
Last Updated: March 10, 2014, 7:40 am
by John Donald O'Shea

Copyright 2014
John Donald O'Shea