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Tuesday, January 26, 2010

The Fallacy of Corporate Campaign Contributions

The Supreme Court made a ruling that corporate executives may spend the corporation's assets on lobbying. They may not contribute too much directly to candidates, but they may purchase their own ads without restriction.

The pro-State troll reasoning is "They earned that money fair and square with their hard work. They should be free to spend it as they please."

Supreme Court justices are not the protectors of individual freedom. They are pro-State trolls making up excuses to justify an increase in State power. The role of a Supreme Court judge is to come up with plausible-sounding lies justifying the evils of the State. These lies are then sold to the general public as the wisdom of the high priests of the State.

Do you see the scam?

All large corporations receive massive direct and indirect State subsidies. Suppose the executives at a corporation receive a State perk worth $1B, either an explicit grant/bailout or a law that restricts competition. The executives then spend $100M lobbying. This is obviously a scam.

Instead of "They earned $1B with their hard work and spent $100M lobbying.", the reality is "They stole $900M."

It is immoral to receive a perk from the State (directly or indirectly), and then spend some of that stolen money lobbying.

That is the problem with the USA economic and political system. Stealing is more profitable than working and doing something useful. That is the virtuous positive feedback cycle of complete economic collapse.

This article was funny.

Despite a record 2009, Goldman Sachs announced that it had set aside only $16.2 billion to reward its employees.

As it disclosed its results for 2009, Goldman said it made a record profit of $13.4 billion for the whole year on revenue of $45.2 billion.
Do you see the "WTF?" part yet?

The banksters at Goldman Sachs are paying themselves $16.2B in bonuses. The overall profit is only $13.4B, including that $16.2B as an expense. The article makes it sound like "Boo hoo! Those banksters didn't pay themselves that much in bonuses!"

Summarizing, Goldman Sachs' executives are paying themselves more in bonuses than shareholders received in earnings!

All of that is bailout money. There was bailout money explicitly allocated by the Federal government. The bailout of AIG was really a stealth bailout of Goldman Sachs, who was a creditor of AIG. The Fed Funds Rate is 0%-0.25% while true inflation is 20%-30% or more. This is a huge indirect bailout to the banksters. The banksters profit all the time via negative real interest rates. The banksters profit from their State-granted perk of printing and spending new money.

It's all stolen money. Both the bonuses to executives and the profits for shareholders were earned via State violence.

This illustrates the fallacy of buying stock in a bank. A pro-State troll says "If you think Goldman Sachs is ripping off American, you can buy their stock and join them!" The fallacy is that shareholders only get leftovers. The banksters pay the vast majority of the stolen booty to themselves as bonuses and salaries.

As another example, I bought shares of Citigroup and Bank of America, thinking they were safe investments. Executives at C and BAC got bailed out, but I still lost most of my investment.

There was one undisclosed bit in the above calculation. How much did Goldman Sachs' executives and the other banksters spend on lobbying? It is obviously immoral to receive bailout money and then spend some of that money on lobbying. I wonder why that isn't emphasized. Is "lobbying money spent" even disclosed on their balance sheet, or is it lumped in with other legal expenses?

If you earn your money via your own hard work, then obviously you may spend it as you please. If you earn money via State violence, then it's a vicious cycle of corruption when stolen money is spent on lobbying.

The banksters provide no useful service to the rest of society. Their profits are pure theft. It is immoral to steal money via State violence and use the profits on lobbying. That is the problem in the USA. Stealing is more profitable than working and doing something genuinely useful. Without the State violence monopoly, huge criminals like the banksters would not have a profitable extortion racket.

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