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Amazon Plays Hardball on Tax Avoidance in Texas

November 30, 2012 by staff

The following is excerpted from “Lines Blur as Texas Gives Industries a Bonanza,” part of a series on corporate tax incentives in the New York Times. Published December 3, 2012 

Tarik Carlton gathered with other workers in February 2011 to hear the bad news: Amazon was shutting its distribution center in Irving, where he loaded trucks for $12.75 an hour.

Business had been strong, but the online retailer did not want to pay a $269 million tax bill from the state comptroller. A standoff with the state ensued, and Amazon laid off the workers. “They didn’t have our interests in heart, truth be told,” Mr. Carlton said.

Amazon opened the distribution facility in 2005 in Irving, near Dallas-Fort Worth International Airport, and local officials awarded the company tax breaks on its inventory.

Positions at the warehouse included product pickers, dock crews and truck loaders. The employees were typically on the young side, and some had served in the military. The warehouse churned through workers because many could not meet the quota of products they were supposed to move each day, according to Frankie Lloyd, who helped Amazon find temporary workers to fill many of the jobs.

“It’s all about what you can do physically,” Ms. Lloyd said. “Like manufacturing, but without the great pay.”

The distribution business grew as manufacturing moved overseas and online shopping boomed. It is big in the Dallas area because two main train lines run here from Long Beach, Calif., where goods arrive from Asia.

The work is highly physical. One Amazon worker wore a step counter that logged five miles during one shift, according to Mr. Carlton, who only recently found a new job. He was among 12 former Amazon workers, including two warehouse managers, who agreed to be interviewed.

There was no air-conditioning in the warehouse, and Mr. Carlton and others said the temperature could reach 115 degrees. They said it was difficult to take breaks given the production quotas.

The pay was typically $11 to $15 an hour, Ms. Lloyd said. Amazon gave out small shares of stock and some bonuses, but the amounts were minimal, she said.

Amazon said it had been working to upgrade its warehouses, which it calls fulfillment centers. The company has installed air-conditioning in all its centers over the past year, said Dave Clark, the vice president for global customer fulfillment.

Mr. Clark said workers always received breaks, and sometimes free ice cream when the facilities did not have air-conditioning. He said the quotas were akin to “expectations that go along with every job, mine included.”

“I really do think these jobs get a bad rap,” Mr. Clark said. “They’re great jobs. They’re safe jobs.”

Mr. Carlton said he had no idea the company was being partly subsidized. “If you give them money, I think more should be expected,” he said, adding that Amazon should have been required to hire more people to handle the heavy workload.

John Bonnot, the director of business recruitment for the Irving Chamber of Commerce, said the city did not impose wage or benefit requirements on companies that received incentives. Irving had required that Amazon create only 10 jobs to receive the tax break.

Mr. Bonnot said Amazon “would have nothing but praise” for the original assistance from the state and the city, which outsources its economic development to the local chamber.

Things began to slide downhill in late 2010 when the state comptroller, Ms. Combs, demanded that Amazon pay the $269 million sales tax bill. The retailer had never charged its Texas customers the tax, giving it an advantage over on-the-ground competitors.

The company hired three powerful advocates with ties to the governor, according to state lobbyist disclosure records. One, Luis Saenz, had been the director of Mr. Perry’s political operation. Days after the warehouse closed, Mr. Perry said he disagreed with the comptroller’s decision to demand the taxes.

“I was the last person besides the site leader and the administrative assistant to leave the building. It was sad for me because I had gotten my family, my grown kids, to move to Dallas with me, and I didn’t want to transfer back and leave them.”

As it was battling with the comptroller, Amazon began negotiating with the Legislature, which was debating whether online businesses should be required to charge sales tax. The company told lawmakers that it would create up to 6,000 jobs in exchange for delaying sales tax collections, similar to a compromise it had struck in states like South Carolina and Tennessee.

The lawmaker with the most power in the decision was John Otto, a Republican member of the Texas House of Representatives. Like all Texas legislators, Mr. Otto’s government job is part time. He also works at Ryan LLC — a job that is not disclosed on his legislative Web site.

Mr. Otto drafted legislation that said online retailers like Amazon would not have to charge sales tax as long as it did not have distribution facilities in Texas. By then, the company had already shut the Irving warehouse.

Mr. Otto and Mr. Saenz declined to comment about the legislation. Amazon would not comment on its negotiations with Texas.

In July, Amazon began collecting sales tax from customers in Texas after the comptroller agreed to release the company from most of its $269 million bill. The company has also promised to open new distribution facilities and hire 2,500 workers. Amazon will owe the state a $1 million penalty if it fails to deliver.

[pullquote] For Texas to give up more than $250 million in tax revenues in exchange for 2,500 jobs amounts to about $100,000 per job.[/pullquote]

The math on the new deal angers former Amazon workers, especially those who are still unemployed. For Texas to give up more than $250 million in tax revenues in exchange for 2,500 jobs amounts to about $100,000 per job. Most distribution workers are paid $20,000 to $30,000 a year. The rest benefits the company’s bottom line, which generally increases executive bonuses and shareholder returns.

King White, a consultant who helps Amazon choose locations, would not comment on the online retailer but said that companies in general had come to view incentives as entitlements. “Everybody thinks they deserve something,” Mr. White said. “ ‘If I’m creating jobs, what’s in it for me?’ ”

The deal on the sales tax did not require Amazon to reopen the Irving facility. That touched off the latest state competition to win over Amazon.

Last month, the city of Schertz beat out neighboring San Antonio for one of Amazon’s warehouses. The company is currently in negotiations with Coppell, outside of Dallas, about an additional center. Like Schertz, Coppell has offered Amazon a deal to keep a part of the sales tax it collects there, among other incentives.

If Amazon accepts, it will be located near Irving and many of its former workers. Sharon Sylvas, 47, had moved from Kansas seven years ago to help Amazon set up the Irving facility. She lives nearby in a one-bedroom apartment with her partner, daughter and two grandchildren.

After Amazon closed, she was out of a job for over a year. With limited options, Ms. Sylvas took a temporary position in October at another company’s distribution center. It is a tougher job than the one at Amazon, and it pays less. For $11 an hour, Ms. Sylvas moves heavy inventory and other items.

She said that if Amazon returned to the area, she would work there again, despite the rigors of warehouse jobs. “It’s real miserable,” Ms. Sylvas said. “But you do it to make a living.”

Image courtesy of John Stich via Diesel.

See also
Amazon Bolts Texas (Columbia Journalism Review)
Amazon Picks U.S. State Sales-Tax Winners (Business Week)
Amazon’s Physical Presence in U.S. and the Sales Tax Battle (American Independent Business Alliance)

Filed Under: Corporate Welfare / Corporate Tax Issues, Free Trade, Independent Business, Uncategorized

Surprise! Citizens United Legal Reasoning Doesn’t Rely on Corporate Personhood

November 11, 2012 by staff

By Nick Bentley
Published November 11, 2012

For anyone who opposes excessive corporate influence over government, these are encouraging days: there’s now a widespread groundswell of support across the country to overturn Citizens United and deprive corporations of their improper status as “people”.

However, we’ve noticed a misconception spreading that Citizens United is an extension of corporate personhood. It’s not.

It’s true that Citizens United strengthened First Amendment protections for corporations. But the basis for that protection isn’t corporate personhood. Rather, the court’s decision rests on two other assumptions:

  1. That money equals speech; and
  2. That non-persons have the right to speech.

That second point is the kicker. If corporate personhood ended tomorrow, it wouldn’t affect Citizens United at all, because non-persons have speech rights now too. If your underpants could talk, they would be protected by the First Amendment.

How do we know this? First, look at some relevant text in the majority opinion, written by Justice Kennedy:

Premised on mistrust of governmental power, the First Amendment stands against attempts to… distinguish among different speakers, which may be a means to control content.

In other words: the identity of the speaker is irrelevant. Justice Scalia drives this point home in his concurrence:

The Amendment is written in terms of “speech,” not speakers. Its text offers no foothold for excluding any category of speaker, from single individuals to partnerships of individuals, to unincorporated associations of individuals, to incorporated associations of individuals—and the dissent offers no evidence about the original meaning of the text to support any such exclusion. We are therefore simply left with the question whether the speech at issue in this case is “speech” covered by the First Amendment.

Justice Scalia stresses that the First Amendment doesn’t exclude “any category of speaker,” The First Amendment protects anything that speaks, whether it’s legally a person or not.

This is a key point for those of us who hope to reign in excessive corporate influence through a constitutional amendment. It’s not enough to merely revoke corporate personhood. To overturn Citizens United, we also have to overturn the two assumptions listed above.

Luckily it’s not difficult get the language right. Both Reclaim Democracy and Move to Amend have proposed amendments which would do so. For example, rather than simply establish that “Corporations are not people,” Reclaim Democracy’s amendment specifies that “the U.S. Constitution protects only the rights of living human beings.”

It’s a small difference in language with big implications. Let’s make sure that all who advocate for an amendment understand the distinction.

Resources
  • Our comprehensive overview of corporate personhood
  • Our introduction to Citizens United
  • Our proposed constitutional amendments
  • Personalizing the Impersonal: Corporations and the Bill of Rights

Citizens United pig courtesy WWYD
Underpants photo courtesy Enrique_L.

Filed Under: Activism, Corporate Personhood, Transforming Politics

State Initiatives to Revoke Corporate Personhood and Overturn Buckley v. Valeo Win Big

November 7, 2012 by staff

Published November 6, 2012
By Reclaim Democracy staff

One state went red and the other blue in the presidential election, but citizens of Montana and Colorado agreed by vast margins that we need to amend the U.S. Constitution to revoke the overwhelming power of money over elections.

In Montana, early returns showed a whopping 75 percent of voters supporting Initiative 166, which directs Montana’s congressional delegation to help pass an Amendment to the U.S. Constitution that would revoke corporate personhood. In addition to overruling multiple instances of pro-corporate activism by the U.S. Supreme Court justices, such an Amendment would allow reinstatement of Montana’s Corrupt Practices Act, struck down by a federal court just months ago after it protected the integrity of state elections for 100 years.

In Colorado, Amendment 65 had won overwhelmingly with 73 percent of votes as of this writing. The measure instructs Colorado’s congressional delegates and state legislature to support an Amendment that allows Congress and the states to limit campaign contributions and spending (presumably overruling Buckley v Valeo).

While Reclaim Democracy supported the measure, we share concerns ably expressed by Stephen Justino of Colorado Move to Amend in this op-ed, saying Amendment 65 should have confronted corporate personhood directly. It’s dubious whether the current Supreme Court justices would interpret an Amendment enabling states to regulate campaign spending as applying to “independent expenditure.s ” Notably, the claim that independent expenditures are non-corrupting — the basis of Justice Kennedy’s opinion in Citizens United v FEC — was shown to be fictional by revelations here in Montana (Reclaim Democracy’s home base) this week. Both initiatives were funded by their respective state Common Cause chapters and enjoyed support from a wide range of citizen groups.

In addition to calling for an Amendment to revoke corporate personhood, Montana’s I-166 adds “the people of Montana regard money as property, not speech.” Many state constitutions demand amendments address only one issue, preventing a single ballot measure calling for both revoking corporate personhood and “money = speech.” However we urge any such effort combine both messages, even if two parallel initiatives are required.

Notably, in Montana’s most hotly contested races, the candidate supporting a ban on corporate electioneering won. Among them was Steve Bullock, who aggressively defended the Corrupt Practices Act all the way to the U.S. Supreme Court as the state’s Attorney General this year. Bullock, a Democrat, won the race for Governor.

Both the Colorado and Montana measures are symbolic since their “instruction” to legislators cannot be legally binding. Nevertheless, we think their overwhelming popularity will build further momentum created by more than 100 communities passing local anti-corporate personhood measures in recent years. They’re the next logical progression in building a Democracy Movement to educate and organize citizens to reclaim democracy from corporate corruption. Congratulations to all who worked on these measures for their resounding victories!

Why is Montana at the forefront of this struggle? See Roots of Rebellion: Why Montana is the Only State to Reject Citizens United.

Addendum

We emphasize that it’s not just Montana and Colorado. More than 400 cities and towns have passed resolutions or ordinances measures calling to end corporate personhood or have serious efforts underway. The votes typically are won by huge margins. Many of the efforts were coordinated through Move to Amend, a broad national coalition with more than 150 chapters nationwide and nearly 250,000 endorsers. Some examples:

  • In Eau Claire, WI 71 percent of voters favored a measure stating, “Should the US Constitution be amended to establish that regulating political contributions and spending is not equivalent to limiting freedom of speech, by stating that only human beings, not corporations, unions, or PACs, are entitled to constitutional rights?”
  • In conservative Pueblo, Colorado, where the city newspaper came out against the measure, residents still voted 65% in favor of a Move to Amend resolution, placed on the ballot by County Commissioners.
  • Move to Amend volunteers in Massachusetts collected signatures to place the constitutional amendment question before one third of the population of their state, and “MA Democracy Amendment Question” passed by 79% overall.
  • Voters in Mendocino County, CA  approved a “stand with the Move to Amend campaign” by a 73% margin. Resolutions also passed in several towns in Illinois and Ohio and Oregon, all by similar landslide margins.
  •  Common Cause also put forward several measures calling , at least, to overturn Citizens United [note: such a reversal would fall far short of revoking corporate personhood–it would return us to the 2010 status quo] and to grant Congress authority to regulate campaign spending.  Approval was 80% in San Francisco, 72% in Richmond, CA, and 74% in Chicago.

There’s little doubt that a movement is gathering force, not just to overturn Citizens United, but to reverse the precedent of corporations enjoying “constitutional rights.” Notably, Montana’s initiative was the first of its kind we’ve seen covered by the Wall St. Journal. A majority of Americans want to limit undue corporate influence and have for some time. Yesterday’s results indicate we’re increasingly ready to put those beliefs into action.

You can read the full text of the Montana or Colorado (pdf) initiatives and see the language of Reclaim Democracy’s Proposed Constitutional Amendments.

For background, see our comprehensive introduction to Citizens United.

photo courtesy truthout.org

Filed Under: Activism, Corporate Personhood, Transforming Politics

Black Friday Now Black Thursday, But Don’t Expect the Best Bargains on Either

November 1, 2012 by staff

The competition for Black Friday "deals" is getting ridiculousInstead of spending time with their families on Thanksgiving this year, employees for Walmart, Target and other chains get to give thanks by selling consumerism to people who think they’re getting great deals (often they aren’t–more below). Yes, more big box chains now are opening their doors for “Black Friday” sales on Thursday, Thanksgiving Day, which means employees of retail chains now must work on one of the only three days they traditionally haven’t had to work. Employees who don’t want to join risk drifting into part-timer purgatory or worse.

The corporate media and chain marketing campaigns again are doing their best to whip up a frenzy over supposedly great deals while encouraging people to sacrifice family time. But before rushing through dessert to ditch grandma and the kids, consider research commissioned recently by the Wall Street Journal. The headline with which it reported the results tells the story succinctly: The Myth of the Black Friday Deal (applies equally to Black Thursday). As you may surmise, you’re just as likely to save money on most items at other times in the year.

Of course, the corporate push to replace a day traditionally dedicated to family with consumerism is predictable, but here’s one ray of hope: chain employees and disgusted citizens are starting to fight back, a group of Walmart employees is planning to strike – almost unheard of in the U.S – and Target employees are protesting.

If you’d like to help defeat  the latest corporate encroachment, consider these actions:

  • Enjoy friends and family on Black Thursday/Friday and shop without the frenzy;
  • Choose locally-owned independent businesses for your purchases when you do holiday shopping;
  • Consider these ideas for Great Gifts Don’t Have to Be “Stuff,” almost all of which bypass the corporate production chain;
  • Encourage friends and loved ones to make similar choices by planning other activities for Thursday and Friday.

But if you happen to participate in this madness, pause for a moment when handing over your cash and look for a moment at one of those bills. Just take a glance at George Washington’s face, or Honest Abe’s. What do you suppose those guys would think of our collective madness? We’re lucky dollar bills can’t cry.

Photo courtesy David Blackwell

Filed Under: Corporate Personhood, Labor and Economics, Walmart

Constitutional Amendments Seem Impossible Until They Become Inevitable

October 25, 2012 by staff

Published October 24, 2012

It was a great benchmark of  progress for the Democracy Movement when the NY Times devoted its popular “Room for Debate” feature to discuss the merits of amending the Constitution to revoke the dominance of money over elections. Our calls for an Amendment, which just a few years ago were “voices in the wilderness,” now are debated in the mainstream press.

We have a long, hard road ahead, but this is a notable mark of progress on the road from impossible to inevitable. Also, this comes just weeks after the NYT offered editorial support for our (meaning all Amendment advocates) position, which Reclaim Democracy! has advanced for more than a decade..

We compiled the four essays (on whether or not to push an Amendment to overturn corporate personhood and “money = speech” precedents) below with added reference links and commentary (in red).

Venerable Way to Overrule Reactionary Justices

Jamie Raskin is a professor of constitutional law at American University’s Washington College of Law and a state senator in Maryland. He is the author of “Overruling Democracy: The Supreme Court Versus the American People.” [Highly recommended]

 “The state need not permit its own creation to consume it.” — Justice Byron White

We the people have amended the Constitution many times to repair the damage to democracy inflicted by a reactionary Supreme Court. The 13th, 14th and 15th Amendments after the Civil War dismantled the Dred Scott decision (1857); the 19th Amendment (1920) overturned Minor v. Happersett (1875), which held that Equal Protection did not protect the right of women to vote; and the 24th Amendment (1964) repudiated Breedlove v. Suttles (1937), which upheld the use of poll taxes to keep poor people from voting.

Today, Citizens United cries out for constitutional correction, because modern democracy requires a wall of separation between the awesome wealth of private corporations and political campaigns for public office.

The Roberts court bulldozed this wall which, although in place for decades, was vulnerable because it was written into statute rather than into Constitutional bedrock. When the conservative bloc demolished the wall, and the U.S. Circuit Court of Appeals for the District of Columbia wiped out any limits on what wealthy individuals can give to independent expenditure campaigns, these outbursts of judicial reactivism released a flood of billions of dollars into our politics.

Speaking both legally and politically, corporate political spending can have only one purpose: to earn back higher returns for investors by turning elected officials, the public and the government itself into effective tools of private corporate gain.

By converting every corporate treasury in America into a potential political slush fund, the court has endangered not only the integrity of our political institutions but the fairness and competitiveness of our market economy. Businesses should thrive by virtue of their creativity rather than the volume of their campaign spending and the number of lobbyists they employ. Adam Smith would be just as appalled as Thomas Jefferson or Franklin D. Roosevelt at this state of affairs.

A plutocratic corporate state favors huge corporations that have a symbiotic relationship with politicians and government — think of the military-industrial complex, big Pharma, the energy industry. Free-market economists are warning us that incumbent “extractive” industries like these use political power to monopolize the market, crush competition and distort public priorities. They are urging us to “save capitalism from the capitalists.” But, to do so, we first have to save the Constitution from the Supreme Court.

All constitutional amendments seem impossible until they become inevitable, but this one is essential. An amendment to empower Congress and the states to reasonably regulate campaign contributions and expenditures will allow us to restore, on firm constitutional ground, the wall of separation between corporations and elections and some semblance of political equality between the rich and everyone else.

It will protect the public’s imperiled interest in campaign finance disclosure and our nearly obliterated interest in building public financing regimes that make publicly financed candidates minimally competitive with candidates bankrolled by big private bucks.

The Right Goal, the Wrong Approach

Monica Youn is the Brennan Center Constitutional Fellow at New York University School of Law.

 A proposal to amend the Constitution can function on two levels, the actual — forcing a change in constitutional law — or the aspirational — transforming popular understanding and engagement.

I have serious doubts that trying to amend the Constitution to overturn Citizens United would work on an actual level, even apart from the obvious problem of amassing the necessary support. An amendment strategy assumes there is a silver bullet that can take care of a particular problem with a simple constitutional proposition, or a set of simple propositions. But even critics of the ruling (myself included), cannot agree on the crux of the problem — whether it’s corporate personhood, equating money with speech, or the special status of elections in First Amendment law. More fundamentally, the complex regulatory problems of money in politics require flexibility and nuance and resist such encapsulation.

Surely no one working to pass amendments giving black citizens or women the right to vote thought they were ending discrimination or creating full equality by doing so. All of us working to amend the Constitution and reverse the line of Supreme Court cases that allow corporations and money to dominate democracy are aware the problem is multi-faceted. But overruling several Court decisions unsupported by our Constitution  is essential to progress. These include, among others, Citizens United, Randall v Sorrell (we submitted this amicus curiae brief), Buckley v Valeo and Santa Clara County v Southern Pacific Railroad — all of which add layers to the root corruptions: that money=speech and corporations are people.

Even if you pick the right target for the silver bullet, you can never underestimate an unwilling Supreme Court’s ability to dodge it through an interpretive evasion. This creates a separate dilemma — either you draft your amendment narrowly, accepting that resistant judges and private actors will make the most of whatever loopholes remain, or you go broad, creating potentially enormous problems of unintended consequences in the sensitive sphere of expressive freedoms.

True, but this concern exists of nearly every issue addressed in the Bill of Rights and most other Amendments. 

On the aspirational level, however, a constitutional amendment strategy may be more valuable. Unlike ordinary legislation, an amendment has a unique power to capture the public imagination, catalyzing awareness and engagement. Such a strategy can yield concrete gains whether or not the proposed amendment is adopted. An educated and energized constituency is a lasting resource that can be mobilized to push for other, more readily achievable reforms.

We should, however, be suspicious when politicians use the aspirational as political cover to avoid talking about the actual. Even in the post-Citizens United era, there are reforms that are within reach and that would make a difference — such as greater disclosure, public financing, regulatory reform and a Federal Elections Commission overhaul.

We agree and support many legislative reforms that represent progress toward the end goal.

But it’s a lot easier for politicians to sign on to a highly unlikely constitutional amendment than to back reforms that would force changes in their own fund-raising practices. Treating a largely political problem as a purely constitutional problem can be just another way of passing the buck, of blaming the Supreme Court for our own failings.

A puzzling conclusion, given that Ms. Youn just vouched for the efficacy of our strategy: “Such a strategy can yield concrete gains whether or not the proposed amendment is adopted.”

The First Amendment Is Just Fine As Is

Floyd Abrams is a senior partner in the firm of Cahill Gordon & Reindel. He represented Senator Mitch McConnell, Republican of Kentucky, in the Citizens United case. He also has represented The NY Times in the Pentagon Papers case and other prominent cases.

I’ve just returned from a few days in Ohio. Yes, that Ohio, the likely election-deciding state. The Citizens United case, so persistently damned by so many, is at work there. Sometimes a viewer will see four ads in a row urging viewers to vote for or, at least as often, against. Sometimes it’s aggravating, sometimes enlightening. But always, it’s a vindication of the First Amendment.

The core principle that underlies the Supreme Court’s Citizens United ruling is the same one that underlies the First Amendment. As Justice Anthony Kennedy put it in his opinion in the case, “political speech must prevail against laws that would suppress it, whether by design or inadvertence.” And, he said, the First Amendment “has its fullest and most urgent applications to speech uttered during a campaign for political office.”

Quoting a pure espousal of opinion by one of the ruling’s authors is not the most compelling defense.

Well-established principles like these are what led the court in Citizens United to strike down legislation that made it a crime for any corporate or union money to be spent within 60 days of an election on material that appears on television, cable or satellite that endorses or denounces a candidate for federal office. It was not new for the court to apply the First Amendment to speech of corporations; Justice Kennedy cited 25 prior cases (including ones involving the corporate owner of The New York Times) involving just such First Amendment protection. The opinion, as well, made clear that Congress was fully empowered to require disclosure of who made what expenditures and in what amount.

In Citizens United itself, the speech at issue was contained in a documentary prepared by a right-wing group that harshly (and in my view terribly unfairly) criticized then-Senator HillaryClintonwhen she seemed likely to be nominated by the Democratic Party for president in 2008. But that’s what the First Amendment exists to protect. The same is true of the advertisements that I saw inOhio.

Some critics of Citizens United have gone so far as to suggest a constitutional amendment that would bar or limit what individuals could spend of their own money to seek to persuade others to support or oppose. [This vague wording suggests there are groups out to stop individual independent expenditures, but neither Reclaim Democracy nor any of the groups we work with propose this approach re personal spending independent of a candidate or party.]

As far back as 1976, the Supreme Court correctly concluded that any such efforts violated the First Amendment since it did not limit corruption or even the appearance of it, but did severely limit speech.

The claim that spending money to help elect or defeat a candidate cannot create any appearance of corruption is utterly detached from common perceptions.

That’s the crux of the matter. Critics of Citizens United believe it is undemocratic. What they ignore is that nothing could be more undemocratic than amending the First Amendment for the first time in our history in a way that would lead to less speech and far less freedom.

We would argue it creates the space for more actual speech to be heard and greatly expands freedom by opening the entirely of the electoral process to millions of Americans currently excluded from any activity but choosing from the pre-determined menu on election day.

The Only Way to Revive Real Democracy

Bob Edgar is the president and chief executive of Common Cause. He represented a suburban Pennsylvania district in the House as a Democrat from 1975 to 1987.

If we’re serious about restoring government of, by and for the people, we need to get big money out of our elections. From the Watergate era through the early 2000s, Congress and state legislatures passed campaign finance laws designed to limit the influence of corporations and wealthy donors on elections and public officials.

The system was less than perfect, but it has been decimated in recent years by Supreme Court rulings like Citizens United v. F.E.C. that give corporations and unions the same constitutional rights as human beings, and equate spending an unlimited amount of money on politics with free speech.

The money now flowing into our politics isn’t free speech; it’s paid speech. In this presidential campaign alone, a handful of deep-pocketed supporters of Governor Romney and President Obama are in the process of spending well over $1 billion carpeting the airwaves with mostly negative advertising.

No one invests such sums without expecting a return, and no one should be surprised when this year’s big political investors start collecting favors from the people they helped elect. It’s time to stop this charade. Corporations aren’t people. They don’t vote, get sick or die in wars for our country. The Constitution was written to protect the rights of individuals, not corporations.

We can correct the Supreme Court’s misreading of our Constitution by passing an Amendment that authorizes limits on campaign contributions and spending, reins in corporate rights and ensures that all citizens, regardless of wealth, have an opportunity to speak and be heard.

Passing a constitutional amendment is rightly difficult. It requires super-majority support like that evident in a Hart Research poll done last year that found 87 percent of Democrats, 82 percent of independents and 68 percent of Republicans in support of an amendment to overturn Citizens United.

Legislators in nine states and local officials in more than 300 cities already have called for such an amendment. This Election Day, voters in Colorado, Montana, Chicago, San Francisco and dozens of municipalities will vote on ballot measures instructing their members of Congress to work and vote for such an amendment.

Big money has no place in elections, and our democracy should never be for sale. Let’s “amend to mend” the misreading of our Constitution by an overly ideological Supreme Court.

When coverage like this appears, please write to let the editors know you care about the issue and applaud their continued coverage. We’ve provided a thorough primer to help, and we are happy to offer free  editing assistance.

Read our draft constitutional Amendment to revoke corporate constitutional “rights” (published nearly a decade before the Citizens United ruling) and Move to Amend’s proposed language.

For background, see our comprehensive introduction to Citizens United

Filed Under: Activism, Corporate Personhood, Transforming Politics Tagged With: Election Law, First Amendment, Voting Rights

Walmart vs Target Redux: More Alike Than You Think

October 22, 2012 by staff

Walmart-vs-Target Combined LogoEditor’s Note: this isn’t the first time a convergence between Walmart and Target has been noted. Some time ago we learned that there’s little difference in the way the two companies treat their workers, despite popular perceptions to the contrary. 

First published in the Washington Post
By Katherine Boyle, on Oct 23, 2012

Along interstate highways and in suburban town centers, sometimes separated by nothing more than parking lots, stand the warring titans of modern retail, shilling flat-screen televisions next to fortified milk.

Here, they battle for the heart and wallet of the American shopper. And your allegiance is as telling as your taste in cable news or the contents of your Netflix queue: Are you cloaked in Target’s bull’s-eye red or Wal-Mart’s royal blue?

“I don’t like Wal-Mart,” said Nadirah Moreland, 39, in the shoe aisle of the Columbia Heights Target. She says Target is “kinder, gentler. They don’t aggressively usurp mom-and-pop stores like Wal-Mart does.”

“I’ve been to a Target once,” said Vanessa Cruz, 29, while perusing children’s clothes at a Wal-Mart in Fairfax. “Target has beautiful stuff, but I don’t go there. The prices are different. Wal-Mart is cheaper, and they have everything.”

Each has its loyalists — and no wonder. The stores market vastly different versions of American exceptionalism: Wal-Mart champions efficiency, thrift. Target offers style, aspiration. Wal-Mart gives us low prices on everything we need; Target tells us what we want.

Yet the companies have much in common. “The remarkable thing,” said Charles Fishman, author of “The Wal-Mart Effect,” “is that 80 percent of the stuff in Target and Wal-Mart is identical.” The prices are often identical, too. The most recent comparison by Bloomberg Businessweek found only a 46-cent difference between the two retailers per $100 of purchases. (You’ll save that 46 cents at Target, although Wal-Mart usually wins independent price comparisons.)

Target and Wal-Mart are, in short, the fraternal twins of American retail — sharing much of the same DNA, yet strikingly different.

Four stores and 50 years ago, in a coincidence that looks prophetic only in hindsight, Pax Americana gave birth to discount shopping, with Target, Wal-Mart, Kmart and Kohl’s all sprouting up in America’s heartland. The economy was booming and the concept, ingenious: Replace seasonal sales by selling discounted goods year-round. The retail revolution came before the civic one, with a growing middle class lapping up toasters and Tide for cheap, cheap, cheap. Discounters catered to the haves and have-mores, anticipating — and cultivating — the have-it-now culture that characterizes modern consumerism.

For Wal-Mart and Target, success was born of the Southern and Midwestern values championed by their respective founders. Sam Walton couldn’t have known his discounter would one day become the world’s largest private employer. And the brothers Dayton wouldn’t have guessed that Target would democratize design for an entire country.

Instead, they possessed an intuitive sense of what drives every customer, characterized by Natalie Gutierrez, 30, as she browsed ottomans in the Columbia Heights Target a few Sundays ago. “I already have everything I need,” Gutierrez said. “But I always like to come in and see if there’s something I may want.”

The booming beginnings

In 1962, the Dayton Co. opened its first Target store at 1515 W. County Rd. B in Roseville, Minn. The five grandsons of company founder George Dayton hatched the idea for an upscale discount chain based on their existing low-priced Downstairs Store.

“What made them so successful is that they’ve been very clever at executing on their core mandate: They are the upscale discounter,” said Laura Rowley, author of “On Target: How the World’s Hottest Retailer Hit a Bull’s-Eye.” “Bruce Dayton used that language in 1962. The family understood the department store model and made investments in customer service.”

And even at inception, customers responded to Target’s friendly and modern atmosphere. “Doug Dayton first heard it called ‘tar-JAY’ in 1962,” Rowley said. The tongue-in-cheek French pronunciation would stick and further the store’s cheap-chic ethos.

A few months later, Sam Walton left behind his Ben Franklin five-and-dime franchises to start Wal-Mart Discount City at 719 Walnut Ave. in Rogers, Ark. In the beginning, Walton was relatively cautious while scouting future sites, hopping into a glorified crop duster to survey small towns in the rural South. Wal-Mart wouldn’t grow with its trademark ferocity until the ’70s and ’80s.

“He was paying attention to places where nobody else was,” said Alan Dranow, senior director for heritage and marketing at Wal-Mart. “Everyone thought you had to go to urban areas or towns of 50,000. Sam said, ‘I disagree.’ He wanted to serve the underserved. So Wal-Mart grew in rural areas before everyone knew what was happening.”

What was it about 1962? Was it the housewives? The novelty of suburban shopping? This seemingly idyllic age would end soon after the consumer carnival began, with the first of the ’60s assassinations and the Vietnam War looming. Still, the four horsemen of discount grew fast and fastidiously, led by Kmart which had 162 stores by 1966. Target founded its in-house advertising team in 1968, a celebrated department that’s still in operation. By 1970, Wal-Mart was a publicly traded company, splitting its stock for the first time the next year.

“This was the dawning of a new kind of consumer economy,” Fishman said. “It changed how we think about shopping and the way we live.”

What’s remarkable about Wal-Mart and Target is not so much their 80 percent overlap as their 20 percent differentiation. They may offer the same discounts, but they have a very different sales pitch. Target — with its danceable ads, creative collaborations and in-store Starbucks — makes no apologies for actively seeking the upscale shopper, differentiating itself with design.

“When you look at Kmart or Wal-Mart, they had licensing agreements with Mary-Kate and Ashley Olsen or Jaclyn Smith,” Rowley said. “Jaclyn Smith is an actress, not a designer. Target chose Michael Graves, one of the most respected architects in the country, to design his own line of products. From there, they went forward to Isaac Mizrahi. They were the very first to do that.”

“From a societal perspective, it used to be that design was the focus of the affluent,” said Barbara Kahn, professor of marketing at the University of Pennsylvania’s Wharton School of Business. “But having design at Target suggests that design can be had by people who desire it at any price point.”

Except those who really can’t afford it. At a news conference earlier this month in New York, executives announced that they’re investing in mobile technologies for their smartphone-wielding customers. They’re shunning holiday layaway. “Our guests have not asked us for it,” Target chief executive Gregg Steinhafel said. Layaway is “just not one of those things that is on their radar.”

That’s why there’s a Wal-Mart down the street.

A ubiquitous presence

Ralph and Betty McDonald remember life before the box stores — but just barely. The couple moved to Fairfax 60 years ago, before Kmart, Wal-Mart and all the others came to their nonexistent neighborhood.

“There was nothing here. Nothing! No crowds,” said Betty, 78, while browsing for cakes in the bakery freezer at Wal-Mart. “I don’t even remember how long this Wal-Mart’s been here.”

The McDonalds visit Wal-Mart a few times each week, for the cakes, the necessities, the bananas selling at 44 cents a pound.

“We come here just to look around,” Ralph, 81, said, pushing the bright blue shopping cart. “Everything is so convenient now. It’s only five minutes from our house.”

Wal-Mart didn’t create the suburbs, but it did help build them. Convenience kept customers loyal, because, well, Wal-Mart was there first. (It’s also ubiquitous: Wal-Mart has 3,942 stores in the United States, whereas Target has 1,770. There are 140 million Americans who shop at Wal-Mart every week, more people than voted in the past presidential election.)

This Wal-Mart in Fairfax is a gleaming heap of pale concrete stuffed with groceries, housewares and Hello Kitty paraphernalia, a mecca of one-stop shopping. With walls swathed in cheery Wal-Mart blue and signs welcoming you to “Save Even More,” you can find 160,000 stock-keeping units, or SKUs, of stuff — the average product count at any given Super Wal-Mart.

“Pile them high and watch them fly. That was Sam’s motto,” Dranow said.

Walton was clearly onto something.

“Wal-Mart is operational excellence,” Khan said. “They’ve always prioritized efficiency and bringing down cost. They’re the ones who came in with the notion of everyday low price.”

“Wal-Mart was a huge force in teaching Americans that what mattered was price, regardless of quality,” Fishman said. “Wal-Mart didn’t create the disposable society in America, but they reinforced the idea that quality is irrelevant so long as you’re getting a great price.”

And Wal-Mart has always been masterful at reflecting the lifestyles of the people who live near its stores. So a Northern Virginia Wal-Mart will feel different from the ones in the swamplands or the desert. And the five Wal-Marts slated to enter the District beginning in 2013 will likely look different than this one just outside the Beltway, which seems bright and peppy, perhaps a bit like . . . Target?

And thus, the Wal-Mart/Target wars wage on, dividing while singing a similar jingle: Expect More. Live Better. Pay less. Save Money. Always low prices for everyone on everything.

Except the folks who need layaway. They’ll just have to go to Wal-Mart.

See also:
  • Target vs. Wal-Mart: Is Target Corporation Any Better for Workers?
  • Our introduction to issues surrounding Walmart
  • Complete index of Walmart articles at Reclaim Democracy

 

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