Corporations aren’t people and can’t have “rights” in the sense people do. Not in the real world. But in the fictional world constructed by lawyers, it seems they do.

What next — must we give banks the franchise, too?

Individual, flesh and blood, persons have rights. The people who own stock in the banks have rights. But when they chose to hide behind a corporate veil, they made a bargain with the government, avoiding personal responsibility for the obligations of the bank.

When the investors in Citi and AIG offer up their personal fortunes to back the obligations of those institutions, then we can talk about “takings”.

Then this evening I ran across this at MotherJones.com:
“How The Nation’s Only State-Run Bank Became the Envy of Wall Street at http://www.motherjones.com/mojo/2009/03/how-nation%E2%80%99s-only-state-owned-bank-became-envy-wall-street.

It is a fascinating read, which begins

The Bank of North Dakota is the only state-owned bank in America—what Republicans might call an idiosyncratic bastion of socialism. It also earned a record profit last year even as its private-sector corollaries lost billions. To be sure, it owes some of its unusual success to North Dakota’s well-insulated economy, which is heavy on agricultural staples and light on housing speculation. But that hasn’t stopped out-of-state politicos from beating a path to chilly Bismarck in search of advice. Could opening state-owned banks across America get us out of the financial crisis? It certainly might help, says Ellen Brown, author of the book, Web of Debt, who writes that the Bank of North Dakota, with its $4 billion under management, has avoided the credit freeze by “creating its own credit, leading the nation in establishing state economic sovereignty.” Mother Jones spoke with the Bank of North Dakota’s president, Eric Hardmeyer.

In mentioning this, I do not know anything more about it than what is in the article. And I do not profess that this model will fit anything anywhere ales in the world. But it has been working in North Dakota for 90 years.

I would simply like to state that some of the things in the article fit what is in my own head about how a state or the Federal government can run a bank, and – at least in this case – make it work WELL.

Repliers to my earlier comments here alleged that a state run bank would be get politics involved in handing out loans. The fact is the opposite: that redlining has been a political reality of private banking for a very long time. And the North Dakota state-run bank was actually started as a response to the difficulties of getting loans from eastern banks and their preferences, at least some of which were certainly political (at least in the east) and that made getting loans nearly impossible in N.D.

In terms of efficiencies of govt-vs-private (which would always be part of such arguments), I would also point at the Postal Service, which was privatized, and which since then has lost the ability to deliver mail even nearby towns by the next day, yet in my childhood the government-run US Post Office could deliver mail even the SAME day, and up until the privatization promised next day mail in the contiguous 48 states, at First Class rates.

I’d like to see what basis Simon has for claiming that government banks are a bad idea. Is it a cure-all for the kinds of abuses we’ve all fallen victim to? Maybe not a cure-all, but it should be part of the discussion.

Let’s not keep our heads in the Reaganomic mindset of “government = evil”, just because we’ve been subjected to that mantra for the last 30 years. Some things government does well. And some things government SHOULD do. Banking, being part of our economic infrastructure, should be moved to the government, for an extended period, in order to see if it could serve the country better than the private banks have. Two horrendous crashes in 80 years should allow us to try a different model. The only other one we have is a government-run banking system. Throwing more patches on the existing model – will that cure things, or just put it off until someone else finds another way to rape the system again? Let’s get it out of the hands of the gamblers and put it in the hands of a government agency.

The legality, if not constitutionality of the government taking over non-bank financial institutions is unclear, but a good argument for its constitutionality can be made if the value of the assets/solvency–or lack thereof–can be established. Thus the focus on trying to establish the value of these assets, and wooing institutions into opening up about them.

Of course, congress could pass legislation giving the government these powers, but let’s say an institution was taken over and it somehow turned out that the assets actually had value/that the institution was solvent. Bad situation. It’s easy to say “well such and such institution is clearly insolvent”, but where do you draw the line?

Because the firms at issue are already insolvent.

New government authority would not RENDER these companies insolvent, which is the source of most of the case law controversy cited; in such cases, yes, there is room for complex takings clause debate.

Poster makes the mistaken Geithner-Summers assumption that the firms are solvent if the assets would only be properly valued — ergo, there must be a taking in here somewhere. But, this not true, if firms in fact are underwater, and so no property to “take,” only financial carnage to clean up/minimize the social impact of — clearly proper, constitutional role for government.

We have created a predatory super-series and we are now seeing it operating in open defiance of the executive and legislative branches, public opinion and the overwhelming public interest. Invoke eminent domain and move.

The price that investors would pay for toxic assets sold by the government: wouldn’t that be the market value? If nobody wants them, wouldn’t zero be the market value? Just asking.

to quote a line from the original Austin Powers:

“Who does Number Two work for?!?!?”

What does it mean that the government can bail out certain institutions and leave others to face the legal consequences of their actions? The unfairness and un-market-system-ness of this have been discussed ad nauseam, but what about the unconstitutionality? Of course the creditors would have likely fared worse under bankruptcy, but as soon as that comes up each creditor who makes anything less than 100% can sue for discrimination. And when they can point to Goldman making (at least) 100% on every claim, who can argue with them? We may get off easy as a country and Lehman may be the worst thing the Treasury ever did. On the other hand, ignoring the existing law and opening the door for Trillions of dollars of claims against the US (in terms of “I was systematically important too, I should have been bailed out like BofA”) may turn out to have been an even worse idea.