Public Institutions Undermined by Large Corporations

A recent article on the corporate state by Ralph Nader presents a somewhat legalistic view, but it does not note that the case for corporate personhood often cited is completely illegitimate. The case I refer to here is Santa Clara County v. Southern Pacific Railroad Company, where a court reporter (who was a former corporate executive for the railroad industry) wrote the case’s headnote, even though the application of equal protection to railroads per the Fourteenth Amendment wasn’t addressed by the Supreme Court’s decision.

Again, the 1886 Santa Clara County v. Southern Pacific Railroad Company has been used to affirm Constitutional rights for corporations all based on a court reporter’s headnote. This headnote statement has been used as a precedent for later decisions, despite it not being part of the dissenting or concurring opinions of the Justices and not being part of the Supreme Court’s ruling. That’s really absurd, and it represents a grotesque example of the law being used to reinforce the economic dominance of the corporate elite.

Remarkably, the artificial creation called the “corporation” has now achieved almost all of the rights of real people under our “We the People” Constitution that never mentions the words “corporation” or “company.”

Corporations cannot vote, at least not yet; only people can. That was seen as a major lever of democratic power over corporations. So what has happened? Commercial money to politicians started weakening the influence of voters because the politicians became increasingly dependent on the corporate interests that bankrolled their campaigns. The politicians use their ever-increasing corporate cash to saturate voters with deceptive political ads, and intimidate any competitors who have far less money, but may be far better representative of the public good.

To further shatter the principle of voter sovereignty, corporations have rewarded those politicians who construct restrictive political party rules, gerrymander electoral districts and obstruct third party candidate ballot access. By concentrating political power in fewer and fewer hands, corporate influence becomes more deeply entrenched in our democratic society. Politicians quickly learn that political favors will attract more corporate campaign cash and other goodies.

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Some fundamental questions are: Will we as citizens use our Constitutional authority to reclaim and redirect the power we’ve too broadly delegated to elected officials? Will we hold these officials accountable through a reformed campaign finance system that serves the people over the plutocrats? Will we realize that a better society starts with just a few people in each electoral district and never requires more than one percent of the voters, organized and reflecting public opinion, to make the corporations our servants, not our masters?

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3 Billion (Instead of 1 Billion) Yahoo Accounts Were Compromised

Yahoo’s use of the MD5 hash basically means that virtually all of their user passwords were compromised. Considering that Yahoo was also found to be involved in the NSA Prism program, people should have been using better email providers years ago. I’d personally recommend Tutanota, Protonmail, and Mailfence for email services.

Yahoo’s infamous hack — already one of the worst in history — is even worse than previously thought.

All 3 billion user accounts it had in 2013 were affected by the security breach, the company, which Verizon acquired in June, said on Tuesday. Yahoo had previously estimated the hack affected 1 billion accounts.

In its statement, the company said:

“Subsequent to Yahoo’s acquisition by Verizon, and during integration, the company recently obtained new intelligence and now believes, following an investigation with the assistance of outside forensic experts, that all Yahoo user accounts were affected by the August 2013 theft.”

The hacked user information included phone numbers, birth dates, security questions and answers, and “hashed,” or scrambled, passwords, Yahoo said in a list of frequently asked questions on its website. The information did not include “passwords in clear text, payment card data, or bank account information,” the company said.

However, the technique Yahoo used to hash passwords on its site is an outdated one that is widely considered to be easily compromised, so it’s possible that people who had the hashed passwords could unscramble them.

Yahoo said it was sending email notifications to account holders that it didn’t previously determine were affected by the hack.

Majority Support a Carbon Tax & Using Its Revenue for Renewable Energy Development

All the support towards fighting climate change is helpful, as even a small power can be useful. A carbon tax is basically a tax on fuel usage that pollutes carbon dioxide into the atmosphere.

The majority of Americans support implementing a carbon tax as a way to curb fossil fuel emissions, according to a new study from Yale University published today in Environmental Research Letters. Moreover, if a carbon tax were implemented, 80 percent of respondents said they would favor using the revenue from this tax to develop clean energy and improve US infrastructure, such as roads and bridges.

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Under the Republican scheme, the tax would initially charge $40 per ton of carbon dioxide produced, resulting in an estimated $200 billion per year in revenue, and the amount would go up over time. This would in turn be paid out in tax-free dividends to US families, amounting to about $2000 annually for a family of four.

The Yale researchers wanted to see if Americans would be in favor of using that tax to further combat climate change instead.

“What we aimed to find out was whether there was support among the American public for a carbon tax to address climate change,” Matthew Kotchen, a professor of economics at Yale, said in a statement. “Specifically, we also wanted to discover how much they were willing to pay, and how they would prefer the revenue from the tax to be used.”

In a nationally representative survey of 1,226 American adults, Kotchen and his colleagues gave respondents ten different ways to spend the revenue from a carbon tax and asked whether or not they would support each of these expenditures.

According to the results, most respondents (nearly 80 percent) were in favor of using the carbon tax revenue for developing renewable energy, or fixing America’s infrastructure, like roads and bridges. Moreover, the average American household was willing to pay around $177 per year in a carbon tax on its energy bills, which by itself would amount to $22 billion in revenue annually.

“Interestingly, our analysis indicates strong public support—more than 70 percent—for using some portion of the carbon-tax revenue to compensate coal miners whose jobs are affected by a reduction in the use of fossil fuels,” Kotchen said. “By our calculations, there would be enough revenue from this tax to compensate all coal miners with nearly $146,000 upon the passage of the tax.”

A carbon tax would punish the environmentally-destructive behavior of the fossil fuel industry, and the rate should be much higher on them than on most of the population. The reason I give for this is the studies showing that 90 companies have caused about two-thirds of historical greenhouse gas emissions.

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Disturbing: Amazon’s Echo Spot is a sneaky way to get a camera into your bedroom

The Amazon Echo Spot is a new level of invasiveness against consumers. Succinctly explained, it’s a new extreme in the exploitation of personal data.

Echo Spot feels like the real push to get cameras inside your smart home. It’s more than just an alarm clock, but Amazon is definitely pushing this as a $130 device that will sit next to your bed. Promotional materials show it sitting on nightstands, providing a selection of clock faces and news / weather information. The privacy concerns are obvious: an always-listening (for a keyword) microphone in your bedroom, and a camera pointing at your bed.

From an article I linked to a month ago:

Amazon is going to show the industry how to monitor more moments: by making corporate surveillance as deeply embedded in our physical environment as it is in our virtual one. Silicon Valley already earns vast sums of money from watching what we do online. Soon it’ll earn even more money from watching what we do offline.

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 Surveillance can transform any physical space into a data mine. And the most data-rich environment, the one that contains the densest concentration of insights into who you are, is your home.

That’s why Amazon has aggressively promoted the Echo, a small speaker that offers a Siri-like voice-activated assistant called Alexa. Alexa can tell you the weather, read you the news, make you a to-do list, and perform any number of other tasks. It is a very good listener. It faithfully records your interactions and transmits them back to Amazon for analysis. In fact, it may be listening not only your interactions, but absolutely everything.

Putting a listening device in your living room is an excellent way for Amazon to learn more about you. Another is conducting aerial surveillance of your house. In late July, Amazon obtained a patent for drones that spy on people’s homes as they make deliveries. An example included in Amazon’s patent filing is roof repair: the drone that drops a package on your doorstep might notice your roof is falling apart, and that observation could result in a recommendation for a repair service. Amazon is still testing its delivery drones. But if and when they start flying, it’s safe to assume they’ll be scraping data from the outside of our homes as diligently as the Echo does from the inside.

It’s becoming more clear why the concerns about Big Tech are rising among more people. These companies are too powerful already, and too much concentrated power results in corrosive corruption.

Article on Tinder’s Data Collection

A woman wrote about seeing her personal information that Tinder had stored about her in The Guardian recently. It’s an insight into how a lot of Internet-based corporations are collecting data too.

The dating app has 800 pages of information on me, and probably on you too if you are also one of its 50 million users. In March I asked Tinder to grant me access to my personal data. Every European citizen is allowed to do so under EU data protection law, yet very few actually do, according to Tinder.

With the help of privacy activist Paul-Olivier Dehaye from personaldata.io and human rights lawyer Ravi Naik, I emailed Tinder requesting my personal data and got back way more than I bargained for.

“I am horrified but absolutely not surprised by this amount of data,” said Olivier Keyes, a data scientist at the University of Washington. “Every app you use regularly on your phone owns the same [kinds of information]. Facebook has thousands of pages about you!”

As I flicked through page after page of my data I felt guilty. I was amazed by how much information I was voluntarily disclosing: from locations, interests and jobs, to pictures, music tastes and what I liked to eat. But I quickly realised I wasn’t the only one. A July 2017 study revealed Tinder users are excessively willing to disclose information without realising it.

“You are lured into giving away all this information,” says Luke Stark, a digital technology sociologist at Dartmouth University. “Apps such as Tinder are taking advantage of a simple emotional phenomenon; we can’t feel data. This is why seeing everything printed strikes you. We are physical creatures. We need materiality.”

Reading through the 1,700 Tinder messages I’ve sent since 2013, I took a trip into my hopes, fears, sexual preferences and deepest secrets. Tinder knows me so well. It knows the real, inglorious version of me who copy-pasted the same joke to match 567, 568, and 569; who exchanged compulsively with 16 different people simultaneously one New Year’s Day, and then ghosted 16 of them.

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What will happen if this treasure trove of data gets hacked, is made public or simply bought by another company? I can almost feel the shame I would experience. The thought that, before sending me these 800 pages, someone at Tinder might have read them already makes me cringe.

Highly Damaging Stock Buyback Recurrences

The epidemic of stock buybacks is another feature of corrupt corporate capitalism. The buybacks of stock used to be illegal in the U.S. for a sensible reason — a restraint on the greed of obscenely rich corporate executives.

The monster of economic waste—over $7 trillion of dictated stock buybacks since 2003 by the self-enriching CEOs of large corporations—started with a little noticed change in 1982 by the Securities and Exchange Commission (SEC) under President Ronald Reagan. That was when SEC Chairman John Shad, a former Wall Street CEO, redefined unlawful ‘stock manipulation’ to exclude stock buybacks.

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What could competent management have done with this treasure trove of shareholder money which came originally from consumer purchases? They could have invested more in research and development, in productive plant and equipment, in raising worker pay (and thereby consumer demand), in shoring up shaky pension fund reserves, or increasing dividends to shareholders.

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The leading expert on this subject—economics professor William Lazonick of the University of Massachusetts—wrote a widely read article in 2013 in the Harvard Business Review titled “Profits Without Prosperity” documenting the intricate ways CEOs use buybacks to escalate their pay up to  300 to 500 times (averaging over $10,000 an hour plus lavish benefits) the average pay of their workers. This compared to only 30 times the average pay gap in 1978.

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By now you may be asking, why don’t the corporate bosses simply give more dividends to shareholders instead of buybacks, since a steady high dividend yield usually protects the price of the shares? Because these executives have far more of their compensation package in manipulated stock options and incentive payments than they own in stock.

Walmart in recent years has bought back over $50 billion of its shares – a move benefitting the Walton family’s wealth – while saying it could not afford to increase the meagre pay for over one million of their workers in the US. Last year the company bought back $8.3 billion of their stock which could have given their hard-pressed employees, many of whom are on welfare, a several thousand dollar raise.

The corporate giants are also demanding that Congress allow the repatriation of about $2.5 trillion stashed abroad without paying more than 5% tax. They say the money would be used to grow the economy and create jobs. Last time CEOs promised this result in 2004, Congress approved, and then was double-crossed. The companies spent the bulk on stock buybacks, their own pay raises and some dividend increases.

There are more shenanigans. With low interest rates that are deductible, companies actually borrow money to finance their stock buybacks. If the stock market tanks, these companies will have a self-created debt load to handle. A former Citigroup executive, Richard Parsons, has expressed worry about a “massively manipulated” stock market which “scares the crap” out of him.

Banks that pay you near zero interest on your savings announced on June 28, 2017 the biggest single buyback in history – a $92.8 billion extraction. Drug companies who say their sky-high drug prices are needed to fund R&D. But between 2006 and 2017, 18 drug company CEOs spent a combined staggering $516 billion on buybacks and dividends – more than their inflated claims of spending for R&D.

Mr. Olenick says “When managers can’t create value in the business other than buying their own stock, it seems like it’s time for a management change.”

Who’s going to do that? Shareholders stripped of inside power to control the company they own? No way. It will take Congressional hearings, a robust media focus, and the political clout of large pension and mutual funds to get the reforms under way.

When I asked Robert Monks, an author and longtime expert on corporate governance, about his reaction to CEOs heavy with stock buybacks, he replied that the management was either unimaginative, incompetent or avaricious – or all of these.

Essentially burning trillions of dollars for the hyper enrichment of a handful of radical corporate state supremacists wasn’t what classical capitalism was supposed to be about.

RNRH: The Existential Threat of Big Tech

The threat that big tech corporations pose is discussed on the recent edition of the Ralph Nader Radio Hour. If the power of these big corporations is left unchecked and is insufficiently opposed, it may lead to a truly dystopian form of society.