“How Corporations Became ‘Persons’ ” http://www.uuworld.org/2003/03/feature1a.html
Corporations gained personhood through aggressive court maneuvers culminating in an 1886 Supreme Court case called Santa Clara County v. Southern Pacific. Until then, only We the People were protected by the Bill of Rights, and the governments the people elected could regulate corporations as they wished. But with personhood, corporations steadily gained ways to weaken government restraints on their behavior—and on their growth. After steady progress over the decades, they made huge strides in the 1970s through Supreme Court rulings that awarded them Fourth Amendment safeguards against warrantless regulatory searches, Fifth Amendment double jeopardy protection, and the Sixth Amendment right to trial by jury. These blunted the impact of the Clean Air Act, the Occupational Safety and Health Administration Act, and the Consumer Product Safety Act, which were enacted to protect workers, consumers, and the environment.

They also won court battles that awarded them First Amendment guarantees of political speech, commercial speech, and the negative free speech right not to be associated with the speech of others. On the surface, when the big corporations and We the People have the same rights, they are equal, and the playing field is level. But disparities of scale tip the field toward the corporations at a steep pitch. If a nation-sized corporation with its huge treasury and squadrons of lawyers wants to exercise its free speech rights in a shouting match with a citizen who is exercising her or his free speech rights, can this be a fair fight?

The Supreme Court has ruled that corporate political speech includes the right to spend millions on lobbying in Washington and to contribute more millions to political campaigns, and corporations have no greater tools for making government their ally. As for commercial speech—advertising, largely—research by Wayne McIntosh and Cynthia Cates of the University of Maryland shows that commercial speech cases, once nonexistent, have become the Supreme Court’s “single most emphasized issue, composing nearly one-quarter of the speech docket over the last decade.”

“The end result,” says Ward Morehouse, cofounder with Richard Grossman of the pioneering group of prodemocracy thinkers known as POCLAD, short for the Program on Corporations, Law, and Democracy, “is that they exercise greater rights than actual persons, and this is an absurd situation.” Morehouse (see profile, page 38) says that in addition to the rights granted them by the Supreme Court, under the law corporations have limited liability, can live on indefinitely, and, while their employees may be tried in criminal courts, corporations themselves cannot.

Another way personhood amplifies corporate power is cruelly ironic in a way that underlines the amoral nature of the marketplace. The court argument that corporations used to gain personhood was that corporations constituted persons under the Fourteenth Amendment—the 1868 measure whose aim was to ensure full personhood to the freed slaves. If this sounds preposterous to you, you’re hardly alone; researchers have been scouring archives in an effort to make sense of it but so far have no conclusive explanation.

from the Munger excerpt: “insufficient controls over morality and prudence in banks and investment banks”
Banks as corporate entities do not and cannot have morality or prudence; only real persons are capable of either and if those persons who control corporations have little or no morality or prudence…, we get what we have today.

“How Corporations Became ‘Persons’ http://www.uuworld.org/2003/03/feature1a.html
The amazing true story of a legal fiction that undermines American democracy.
“”Corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.” – A. Lincoln

If only we could return to the earlier day as written in the above article:

In the early days of the republic, most corporations were what we now call nonprofit organizations; the for-profit corporations were largely banks. Then as now, charters were issued by states, each under its own laws. But early charters specified the corporation’s purpose and expired at the end of a set term. If corporations overstepped their boundaries their charters could be—and not infrequently were—revoked. Corporations could not own shares in other corporations, so mergers and acquisitions and subsidiaries were unknown. They certainly could not curry political favor with campaign donations. This sweeping prohibition on political activity is from a Wisconsin statute that was in force well into the twentieth century:

No corporation doing business in this state shall pay or contribute, or offer consent or agree to pay or contribute, directly or indirectly, any money, property, free service of its officers or employees or thing of value to any political party, organization, committee or individual for any political purpose whatsoever, or for the purpose of influencing legislation of any kind, or to promote or defeat the candidacy of any person for nomination, appointment or election to any political office.

Corporations that violated this law faced charter revocation and “any officer, employee, agent or attorney or other representative of any corporation, acting for and in behalf of such corporation” would be subject to a fine and “imprisonment in the state prison for a period of not less than one nor more than five years.”

All the above and more in the way of constraints on corporations was eroded away over the decades by Supreme Court decisions that ended up establishing the corporate “person” which has virtually the same standing in law a real person except the corporation per se cannot do hard time in a Federal pen.

IIRC in the article he referred to CDO traders as “bucket shops”, which just made my whole day. That, and finding a used driveshaft for my bike…

Charlie Munger for Treasury! Volcker for the Fed!

1) “…undesirable conduct among investment banks;”

Corrected: criminal conduct among investment banks;

2) “…and extreme excess, sometimes amounting to fraud, in the promotion of consumer credit.”

Corrected: and extreme excess, characterized by ubiquitous, blatant, systemic fraud and usury, in the promotion of consumer credit.

3) “Unsound accounting was widespread.”

Corrected: The total abandonment of accounting principles was required of accountants as a condition of continued employment or in exchange for a percentage of the take.

4) “There was also great excess in highly leveraged speculation of all kinds.”

Corrected: There was leveraged dealmaking allowing the criminal perpetrators to skim the revenue stream using pseudo-legitimate methods disguised as fees and bonuses.

5) “This system, in which completely unrelated entities bet trillions with virtually no regulation…”; and. “…unfortunately, they convinced regulators that denizens of our financial system would use the new speculative opportunities without causing more harm than benefit.”

Corrected: From the highest levels of government, regulators and law enforcement officials were encouraged to look the other way while individuals, investor groups, and foreign countries were defrauded, and our treasury was looted defrauded. those refusing to comply with and/or participate in this continuing criminal enterprise were summarily black-balled and/or dismissed on trumped-up charges.
_______

I’ve been saying it for a number of years, and it’s still true: The entire collapse of our financial system is a law enforcement matter. The damage is done, it is irreversible, the guilty must be punished. Anything less, and we will live to see this happen again.

In reality, horse racing probably has MORE oversight than CDS – i’m guessing i can’t walk up to the window at Churchill Downs and throw down a few hundred thousand on the three horse without showing them the money up front…

but the problem isn’t these dastardly derivatives contracts – the problem is the margin (or lack thereof) that accompanies then.

Now we have deconstructed those firewalls, and have our own “bucket shops” in the form of the CDS market, completely free of any audits or regulation, and behaving just as badly as the bucket shops of the 1920s, but with trillions instead of millions of dollars at stake.

The mortgage markets have been perverted into a harsh parody of anything resembling secured loans, with fraudulent appraisals, no income verification, easy money, and securitization of the resultant mortgages, making use of the injected risk by slicing and dicing mortgages, bundling tiny slices of them into CDOs of various levels of presumed risk, bearing different interest coupons. Of course, nobody guessed that every player in the game was bent, and the entire edifice would come crashing down, rendering half of the CDOs as worthless, and making it impossible to tell the good ones from the bad.

It will be quite a while before there is any light at the end of this tunnel — but that does not preclude the possibility of significant market moves in either direction, as we proceed upon the overall downward path to second-class nation* status, crushed by a debt load that will not be lightened for decades.

But Charlie Munger is delusional if he thinks that serious bipartisanship can emerge from the cesspool of crooks that reside in the House and Senate. It will take at least a couple of election year flush cycles before anything resembling bipartisanship can emerge.

*(I may be optimistic here)