Vermonters Buy Into A Constitutional Mess Of Pottage

I happened to be in Vermont last week on Town Meeting Day, that New England democratic tradition in which neighbors gather to decide public business.

I didn’t attend because Vermont is just a part-time residence for me; my home and my vote are in Florida. But I was pleased that my neighbors in the Town of Hartford voted to rebuild the Quechee covered bridge, just down the hill from my house, which was destroyed last fall by floodwaters from Tropical Storm Irene.

Quechee is just one of five villages in the town, and there has been some concern that more distant residents would turn their backs on the $1.1 million bond issue needed to pay for the rebuilding. But everyone understood the bridge’s importance to Quechee, a village which also happens to attract a lot of tourists to the area. They come to enjoy our scenic gorge on the Ottauquechee River, which is still easily accessible, and to admire Simon Pearce’s fine blown glass and dine at his excellent restaurant, which is alongside the ravaged bridge and now requires a lengthy detour.

People know their own neighborhoods, and they usually make good decisions when they get together to hash things out. We don’t have town meetings in Florida. We have homeowners associations and condo boards, and the better ones among them – the ones that invite everyone in the community to participate – work pretty much the same way.

So it was disheartening but not entirely surprising to learn that at last week’s meetings, at least 58 Vermont towns voted to endorse a constitutional amendment that would exchange our most precious democratic birthright, the protections afforded by the Bill of Rights and the rest of the U.S. Constitution, in return for a mess of pottage – the overturning of a much-criticized but fundamentally sound Supreme Court decision. In reality, the proposal would exchange valuable rights in return for nothing at all.

The chief backer of the amendment is Sen. Bernard Sanders, an independent (he calls himself a socialist) from Vermont and self-appointed scourge of the rich and powerful, a persona that appeals to modern Vermonters. His professed goal is to reverse the Supreme Court’s decision in Citizens United v. Federal Elections Commission, which is a misguided objective in itself. However, the language of Sanders’ proposal would go vastly further – much further, I’m sure, than his fellow Vermont citizens took the time to explore before they gave Sanders their thumbs-up.

I’m not the least bit worried that Sanders’ effort might pass. It has no chance whatsoever of attracting the two-thirds vote in the House and Senate it would need to go before the states, let alone of winning ratification from three-quarters of the states in order to take effect. What disturbs me is how cavalierly Vermonters (who are not as different from the rest of us as they sometimes seem to think) were willing to treat our Constitution’s guarantees of freedom of speech and of association.

Sanders’ proposed amendment would declare that the Constitution’s rights “are the rights of natural persons and do not extend to for-profit corporations, limited liability companies, or other private entities established for business purposes or to promote business interests.” It goes on to say that such entities are “subject to regulation by the people through the legislative process” as long as such regulations “do not limit the freedom of the press.” Apparently this means that corporations may exercise press freedoms as long as they own a press, though I’m not sure what that entails in the Internet age. In any case, it seems to mean that Rupert Murdoch’s News Corp. or the Sulzbergers’ family-dominated New York Times Co. would possess privileges that outfits like Facebook (maybe) or Exxon Mobil (probably) do not.

Another section of Sanders’ opus would prohibit businesses from “making contributions or expenditures in any election of any candidate for public office or the vote upon any ballot measure submitted to the people.” This is the part that reverses Citizens United, but only for profit-seeking businesses, not for labor unions or other entities that the decision also freed to spend their own money to put out their messages about election campaigns and ballot issues. Under Sanders’ approach, corporations would be banned from advertising their opposition to ballot measures that could regulate or tax them out of a jurisdiction, or even out of existence.

Advocates of Sanders’ approach portray the issue as one of “personhood,” arguing – falsely – that the Citizens United holding is that corporations have the same rights as natural people.

Corporations are merely aggregations of people. To insist that corporations lack the same rights as the people who own them, manage them or work for them is to argue that we forfeit some of our rights when we combine our efforts to accomplish things we could never accomplish individually.

Without corporations and similar entities, an enterprise like Apple would merely have been Steve & Steve’s Computer Company, destined to expire when the collaboration between Steve Jobs and Steve Wozniak ended, or when Steve Jobs died. Without corporations we could not have car companies, or medical centers, or cellphones, or electricity delivered to our homes. No enterprise could grow larger than the efforts of a handful of people could make it, or last longer than the lifetime of its founders.

The Supreme Court first held that individuals have a right to associate through corporate entities in 1958, in NAACP v. Alabama. The state of Alabama sought to pressure the civil rights group by requiring that it identify its members and agents operating within the state. The high court held 9-0 that this was an unconstitutional infringement of individuals’ free speech rights.

Sanders’ proposal would not stop at stripping free speech rights from corporations and their shareholders. It would strip all constitutional protections. Corporations would not be entitled to due process, or to be free of state interference in interstate commerce, or to be protected from seizure of their property or from illegal searches. Any sort of Gestapo-like tactic would be fair game when directed by the federal government against a business enterprise.

Did residents of 58 Vermont towns give any thought to this? I very much doubt it. They may be willing to elect an avowed socialist to the U.S. Senate, and they may have an unreasonably strong sense of persecution by what they perceive as moneyed interests from faraway places (the same moneyed interests to whom they happily sell second homes, ski lift tickets and bed-and-breakfast lodgings), but Vermonters are neither stupid nor antidemocratic. They just allowed themselves to be led by an ideologue who spends most of his time in Washington, D.C., fighting a class war that has not been relevant for generations.

Town meetings work really well on matters that town residents know something about, like the importance of our covered bridge in Quechee. But unless everyone guards against being manipulated and bullied into going along with the crowd, town meetings can also degenerate into mobs. Last week’s votes in Vermont are an object lesson in what can go wrong in small-town democracy. It is one that, fortunately, won’t do any harm in the long run.

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About Larry M. Elkin 564 Articles

Affiliation: Palisades Hudson Financial Group

Larry M. Elkin, CPA, CFP®, has provided personal financial and tax counseling to a sophisticated client base since 1986. After six years with Arthur Andersen, where he was a senior manager for personal financial planning and family wealth planning, he founded his own firm in Hastings on Hudson, New York in 1992. That firm grew steadily and became the Palisades Hudson organization, which moved to Scarsdale, New York in 2002. The firm expanded to Fort Lauderdale, Florida, in 2005, and to Atlanta, Georgia, in 2008.

Larry received his B.A. in journalism from the University of Montana in 1978, and his M.B.A. in accounting from New York University in 1986. Larry was a reporter and editor for The Associated Press from 1978 to 1986. He covered government, business and legal affairs for the wire service, with assignments in Helena, Montana; Albany, New York; Washington, D.C.; and New York City’s federal courts in Brooklyn and Manhattan.

Larry established the organization’s investment advisory business, which now manages more than $800 million, in 1997. As president of Palisades Hudson, Larry maintains individual professional relationships with many of the firm’s clients, who reside in more than 25 states from Maine to California as well as in several foreign countries. He is the author of Financial Self-Defense for Unmarried Couples (Currency Doubleday, 1995), which was the first comprehensive financial planning guide for unmarried couples. He also is the editor and publisher of Sentinel, a quarterly newsletter on personal financial planning.

Larry has written many Sentinel articles, including several that anticipated future events. In “The Economic Case Against Tobacco Stocks” (February 1995), he forecast that litigation losses would eventually undermine cigarette manufacturers’ financial position. He concluded in “Is This the Beginning Of The End?” (May 1998) that there was a better-than-even chance that estate taxes would be repealed by 2010, three years before Congress enacted legislation to repeal the tax in 2010. In “IRS Takes A Shot At Split-Dollar Life” (June 1996), Larry predicted that the IRS would be able to treat split dollar arrangements as below-market loans, which came to pass with new rules issued by the Service in 2001 and 2002.

More recently, Larry has addressed the causes and consequences of the “Panic of 2008″ in his Sentinel articles. In “Have We Learned Our Lending Lesson At Last” (October 2007) and “Mortgage Lending Lessons Remain Unlearned” (October 2008), Larry questioned whether or not America has learned any lessons from the savings and loan crisis of the 1980s. In addition, he offered some practical changes that should have been made to amend the situation. In “Take Advantage Of The Panic Of 2008” (January 2009), Larry offered ways to capitalize on the wealth of opportunity that the panic presented.

Larry served as president of the Estate Planning Council of New York City, Inc., in 2005-2006. In 2009 the Council presented Larry with its first-ever Lifetime Achievement Award, citing his service to the organization and “his tireless efforts in promoting our industry by word and by personal example as a consummate estate planning professional.” He is regularly interviewed by national and regional publications, and has made nearly 100 radio and television appearances.

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1 Comment on Vermonters Buy Into A Constitutional Mess Of Pottage

  1. The push to overturn “Citizen’s” is, in my opinion, an attempt to tilt the playing field heavily in favor of the Democrats. If the measure included labor unions and various other organizations such as MoveOn.Org, It would be a different story, but Sanders and Co. only want to remove SOME of the big money from our election process…namely the big money that goes to Republicans. What a farce.

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