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  (Source: Tristar Pictures)
Lobbyist bribery goes to waste for once, as Rep. Smith is forced to "postpone" SOPA indefinitely

UPDATE: PIPA is "dead"/postponed too... details at the end of the piece.

Over the weekend U.S. President Barack Obama's (D) cabinet hinted that he might veto the pending House's "Stop Online Piracy Act" (SOPA) (H.R. 3261) and Senate's "PROTECT IP Act" (PIPA) (S.968) out of concern that the bills Orwellian takedown provisions could damage the legitimate internet economy.  

I. The Rat Returns

With the support of politically enemy-turned-friend House Oversight Chairman, Rep. Darrell Issa (R-Calif.), Rep. Eric Cantor(R-Virg.) was compelled to promise to shelve any potential vote in the Republican-controlled House in terms of passing SOPA.  It was finally over -- the months of populist protest online, media criticism, and criticism from the online industry's top innovators like Google Inc. (GOOG) had paid off.  They had won.

Or so they thought.  On Monday support SOPA rose up from the dead, after Rep. Lamar Smith (R- Tex.) -- the bill's author in the House of Representatives -- said he would bring the bill to the floor for minor revisions and a February vote.  That led to the largest online protest that America has ever seen with tens of millions of Americans taking to the internet to post protest message, email their representatives, call their representatives, and sign petitions.

The bold populist outcry seemed to work.  First some Congresspeople jumped ship.  Then more did.

But even yesterday Rep. Smith -- whose office had done its fair share of copyright infringing -- was quoted as dismissing his constituents protest as a "publicity stunt" and vowing to ignore the people and bring the bill to vote.

II. Cornered, SOPA Meets Its End (For Now)

But on Friday afternoon a weay Rep. Smith took to the internet, tail tucked and admitted defeat, agreeing for the first time to shelve the bill.  The key word is he used is "postponed".  So it's fair to say SOPA is dead, but if you've ever played Resident Evil or watched South Park SOPA is a bit like Wesker or Kenny -- it may be dead -- but it will likely return next episode.

Rep. Smith ears shut
Rep. Lamar Smith (R-Tex.) has finally listened after purposefully ignoring the criticism about SOPA for so long. [Image Source: Know Your Meme]

In his statement Rep. Smith writes:

The problem of online piracy is too big to ignore. American intellectual property industries provide 19 million high-paying jobs and account for more than 60 percent of U.S. exports. The theft of America’s intellectual property costs the U.S. economy more than $100 billion annually and results in the loss of thousands of American jobs.  Congress cannot stand by and do nothing while American innovators and job creators are under attack.

The online theft of American intellectual property is no different than the theft of products from a store.  It is illegal and the law should be enforced both in the store and online.

The Committee will continue work with copyright owners, Internet companies, financial institutions to develop proposals that combat online piracy and protect America’s intellectual property.  We welcome input from all organizations and individuals who have an honest difference of opinion about how best to address this widespread problem.  The Committee remains committed to finding a solution to the problem of online piracy that protects American intellectual property and innovation.

The numbers are debatable, but Rep. Smith is right on one key issue -- online piracy is an issue that needs to be addressed in some form.  Whether it should be big media finding easier ways to distribute content legally online, such as challenging Apple, Inc.'s (AAPL) exclusivity contracts and bullying, which limit the number of legal distribution outlets, or the government finding a way to balance the rights of intellectual property holders with the people's right to reasonable justice, there's certainly cause to look for level-handed solutions in the public and private sector.

But at the same time Rep. Smith's statement is problematic as it couples two very different issues -- domestic piracy (sharing copyrighted works illegally via torrents, P2P, streaming, etc.) and foreign piracy.  

Foreign piracy is already a vast sea to navigate on, as it includes everything from stealing proprietary chipmaking technique from American fabs or engine part design from American fighter jets to your everyday bazaar merchant selling phony DVD copies of popular American films.  These kinds of abuses needs to be addressed, but in recent years Congress and the White House have essentially meekly bowed to China -- arguably the biggest single infringer of American goods -- afraid to speak up against it.

So when Rep. Lamar Smith talks about fighting foreign piracy, that's great but SOPA and Congress's past actions have done scant little to challenge infringer nations like China.  What they have done a whole lot to impose Orwellian takedown on the internet and punitive punishment on the American people.

III. Federal Bribery Must be Stopped

All of the piracy debate also overshadows a far greater base issue -- the allowance of blatant bribery in American federal politics.

Anti-streaming lobbyists paid an estimated 10 percent of all active U.S. Senators' combined election costs ($86M USD) and an unspecified amount (like in the high tens to low hundreds of millions of dollars) to the U.S. Congress, according to extensive research.  It's nice to see this kind of blatant bribery attempt fail for once.

But the real issue here is that if the bribery was smaller and the "bought" legislation didn't involve dramatic erosions of rights and free enterprise that SOPA did, the American people probably would have ignored it -- in fact that's what they been doing for a good couple decades now, as lobbying has grown into a flourishing mega-industry in the capital.

bribery pays
It's hard to get anything done in Washington these days without a bribe.
[Image Source: Google Images]

The end result is that while the American taxpayer and small business labor slavishly to pay their tax debt, the corporations with well-heeled lobbyists enjoy "tax holidays" and government grants.  These are kickbacks for bribes, plain as day, but politicians pretty them up with softer speak.

A recent peer-reviewed research study by the University of Kansas' business school showed that for every $1 spent bribing politicians in Washington D.C., corporate donors get an estimated $222 USD in tax exemptions and other financial kickbacks.  This bribery must be recognized and must be put to an end.  It is anti-innovation.  It is anti-freedom.  It is anti-American.

It is a huge problem that Americans must address, as they look back on their victory over SOPA and big media special interests.


PIPA, written by Sen. Harry Reid (D-Nev.) (very similar to the House's Republican-written SOPA) is also dead or delayed ("postponed").  In a press release Sen. Reid echoes the words of his Republican colleague, Rep. Smith, writing:

In light of recent events, I have decided to postpone Tuesday’s vote on the PROTECT I.P. Act.

There is no reason that the legitimate issues raised by many about this bill cannot be resolved. Counterfeiting and piracy cost the American economy billions of dollars and thousands of jobs each year, with the movie industry alone supporting over 2.2 million jobs. We must take action to stop these illegal practices. We live in a country where people rightfully expect to be fairly compensated for a day’s work, whether that person is a miner in the high desert of Nevada, an independent band in New York City, or a union worker on the back lots of a California movie studio.

I admire the work that Chairman Leahy has put into this bill. I encourage him to continue engaging with all stakeholders to forge a balance between protecting Americans’ intellectual property, and maintaining openness and innovation on the internet. We made good progress through the discussions we’ve held in recent days, and I am optimistic that we can reach a compromise in the coming weeks.

The only major difference between Sen. Reid's and Sen. Smith's commentary seems to be little tidbits of party-appropriate rhetoric, designed to pander to their base's sensibilities.

Sen. Reid's uses a "union" analogy, in an effort to sway Democrat voters, while Sen. Smith's focus on "foreign" threats and his vow to "work with... financial institutions" buzz words he clearly hopes will please his voters.

Sources: Lamar Smith, Harry Reid, NPR [$1 lobbyist = $222 tax breaks]

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RE: Here here
By Ryrod on 1/23/2012 2:58:42 AM , Rating: 2
Well I owe you an apology. It read as if you were being quite literal and not hypothetical. Regardless, I crossed a line and I'm sorry.

I apologize as well. When I re-read my earlier post, at certain points I seemed to get rather flippant with you and for that I apologize.

We have to remember we live in a WORLD economy. If corporations were banned in America, how many companies would chose to pack up and move operations oversees? And think what that would do to our country and economy. I can't even begin to predict all the far ranging consequences such a thing would cause.

We do need the corporate structure at this time, but I think that isn't so much an issue of necessity of the structure, as it is a need for security. People are ingrained in the idea of a corporation and I think if we gave sole proprietors and partnerships the same rules as corporations, you would see many more companies use those structures. In theory, we could eventually wean ourselves off of the corporate system if we choose to do so.

My biggest complaint about corporations is that there tends to be a lack of accountability because institutional and societal memory is so short that people often forget things. Coupled with the often short tenure of CEOs, this creates a system where CEOs feel little compulsion to act in a manner where the benefits to the company and the harm to society is equally balanced.

I know this is an extreme one, but for example, if tomorrow, Dow Chemical decided to dump all of its corporate byproducts down a depleted mine shaft as a way to save a million dollars, they would likely do so. Now let's say the chemicals seep into the ground and the nearby city's aquifer. This causes cancer in the nearby city, but doesn't manifest for 10 years. By then the CEO #1 is gone and the corporate structure is the one bearing the burden of paying for the lawsuits and the new CEO #2 is the one taking the flak for it. As such, a new face is brought in as CEO #3 to give the company a better image. Ten years later, the new face CEO #3 is gone and they bring in another CEO #4 that is more profit-oriented and he implements the same byproduct dumping in mine shafts policy as the first CEO. At that point, we are right back at square one and the corporate structure is dealing with CEO #4 that fundamentally hurts the corporation itself in the long run, but makes the corporation lots of money in the short-term to the detriment of society.

Now there are some corporations that keep their CEOs for a long period of time, like Apple and Microsoft, but those are corporations that were founded by their CEOs and are not typically the norm. Instead, there are constant shifts between CEOs and since corporations are profit driven, CEOs are focused on the short term benefits of policies and less focused on the long-term effects because that CEO will likely have gone to a new corporation by the time the long-term effects crop up. Partnerships and sole proprietorships don't have this problem, because the people who run such businesses are so intertwined with the business since they own part of the business. Any success of the business or failure of the business, either short-term or long-term, directly affects the economic interests of the owners/operators of that business under a partnership/sole proprietorship. If we could implement such an accountability system for CEOs in corporations, I would be ecstatic.

Legally, you're wrong. Despite not being natural persons, corporations are recognized by the law to have rights and responsibilities like natural persons. I'm highly simplifying things by using this statement, of course. But "corporate person-hood" was decided back in the 1800's.

I think you misunderstand my argument. I'm not saying that courts haven't recognized corporate quasi-personhood, because courts have. I'm simply pointing out that you can't ban something that isn't a right in the first place. I know it sounds like I'm arguing semantics, but it's an important point I will address in a second.

Excuse me but, for the most part, EVERYONE has the right to earn the privilege to drive. People do have the right to get into a car and drive, provided they have met the legal terms involved in doing so. Getting a license, having insurance etc etc.
The ACT of driving might not be a right, but the EARNING of the privilege certainly is.

I apologize in advance if I sound condescending, but I'm really trying not to. I think where you are having the problem understanding my argument is because you are applying 14th Amendment due process on the assumption that driving is a right under the Constitution. Here we are dealing with an intersection of state law and Constitutional due process imposed on the state by the 14th Amendment.

You are correct that everyone has a right to earn a driver's license if such a thing is available. States cannot arbitrarily deny a driver's license to a group of people, but the state is also not required to even issue a driver's license. What I am trying to say is that if tomorrow the state, not the Federal Government, wanted to eliminate driver's licenses and ban driving altogether, they could do so because the right to drive is not guaranteed in the US Constitution. However, if a state gives such a right to anyone, then the right must apply to all individuals equally. That was the reasoning in Citizens United as well.

"If you can find a PS3 anywhere in North America that's been on shelves for more than five minutes, I'll give you 1,200 bucks for it." -- SCEA President Jack Tretton

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