‘They vote against their economic interests’

Liberal Democrats like to talk about the foolishness of rank-and-file Republicans who vote against their economic interests.

But I think this is no less true of liberal Democrats themselves.  The Obama administration, as much or more than the Bush administration, is committed to furthering the interests of Fortune 500 CEOs and Wall Street bankers at the expense of the general public.

And a Hillary Clinton administration, based on her record and her sources of support, would be no different.

Just one example, out of many, is Obama’s and Clinton’s support for the Trans Pacific Partnership and other trade agreements that limit the ability of governments to legislate to protect labor, public health and the environment.

Source: Center for Responsive Politics

The chart from the Center for Responsive Politics shows the affiliations of her top campaign contributors from 1999 to the present.

They are all connected with Wall Street banks, corporate law firms and Fortune 500 companies, except for Emily’s List, which supports women and feminist candidates.

She is a rich woman because of six-figure fees she received from Wall Street financial firms for giving speeches.  I don’t think they would have paid such fees except in gratitude for favors rendered in the past and expectations of more favors in the future.

Now she has expressed concern about economic inequality and concentration of wealth at the top, but I think her associations, her sources of campaign funding and her record are better guides to her thinking than her campaign rhetoric.

This is not to say that there are no disagreements between Democrats and Republicans on economic policy.  But I think these disagreements reflect disagreements among the corporate elite.

The Koch brothers have a different political philosophy than Bill Gates.  Some members of the economic and financial elite are willing to do things to alleviate economic distress, and others aren’t, but neither will tolerate a candidate that threatens their economic and political power.

I make this argument to my fellow liberal Democrats, and the answer I get is, “Nobody’s perfect.”

The top 0.01 percent and campaign spending

Share of campaign contributions by the top 0.01% income bracket

I and others have written about how the problem in the USA is not in the concentration of wealth and income in the top 10 percent or top 1 percent, but in the top 0.01 percent—the 1 percent of the 1 percent.

Recently I came across a chart that shows how this tiny group of people, roughly 25,000 out of 150 million American voters, provide 40 percent of the financing of American elections.

I’d be very interested to see any research on the top 1 percent of the top 1 percent of the top 1 percent—the richest 25 or so Americans.

You can see their influence in the recent appearances of Republican presidential candidates before Charles and David Koch or Sheldon Adelson, like actors auditioning for a part.

This is not the only way that the ultra-rich influence government.  They also provide employment and income for politicians and administration officials after they leave office.  It is not surprising that the political system responds to the wishes of Americans in upper income brackets, but not to average Americans.

Senator Bernie Sanders, an independent from Vermont, who is running for the Democratic nomination, is trying to break free of this system.   He raised $1.5 million in the first 24 hours after announcing his candidacy, from about 35,000 donors giving an average of $43.54 each.  That’s more than any of the announced Republican candidates have raised so far.

This is a good start.   But it’s an uphill battle.

Hillary Clinton has announced she intends to raise a campaign war chest of from $1 billion to $2.5 billion.  To make up that amount from small donations, 10 million American voters would have to contribute $100 to $250 each, which would be difficult but not un-doable.

Fortunately it’s not necessary to match billionaires dollar-for-dollar, but only to raise enough money to get the populist message out.

U.S. democracy: The power of money

Writer Larry Beinhart, one of the panelists in this Al Jazeera English program on U.S. campaign financing, said compared American democracy to Iranian democracy.  In Iran, all political candidates have to get clearance from the Council of Guardians who certify that they conform to the tenets of Shiite Islam.  Within those limits, there are contested elections based on full and vigorous debate.  In the United States, as Beinhart said, candidates have to get clearance from financial guardians, the big contributors who pay for election campaigns, and, within the limits of acceptability to those big contributors, there are contested elections based on full and vigorous debate.

James Bopp, lawyer for the winning side in the Citizens United case, and Steven Hoersting, co-founder of the Center for Competitive Politics, who is regarded as a father of the Super-PAC system, argued that unlimited financial contributions allow for more voices to be heard in American politics, and offset the power of supposedly liberal reporters and broadcasters.  Hoersting argued further that middle-class people are not at a disadvantage, because it allows them to pool their financial resources and speak independently.

This is not how things work in practice, though.  We Americans have a wide range of choices on abortion rights, affirmative action,  church-and-state separation, gay marriage, smokers’ rights and many other issues that do not affect the financial interests of the upper 1/10th of 1 percent of income earners.  But candidates who advocate breaking up the big Wall Street banks, which is what public opinion polls say the majority of the American people want, are relegated to the fringes.

The tiny group of people who buy U.S. elections

Super-PACs—technically known as “expenditure-only committees”—are a new kind of campaign organization which became legal as the result of a lawsuit against the Federal Election Commission in October, 2010.  Super-PACs may raise unlimited amounts of money from corporations, associations, unions and individuals to advocate for or against a candidate.  They may not contribute directly to a candidate or campaign, and they must report their donors to the FEC on a monthly or quarterly basis.

Rich campaign contributors like the super-PACs because they control the message.  They don’t have to get the approval of the candidates or get the approval of their campaign staffs.

These charts from Mother Jones show what a small group of people finance the super-PACs.

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The biggest contributor to super-PACs is the Las Vegas casino tycoon Sheldon Adelson who, with his wife Miriam, has donated $36.3 million so far this year.  That is a lot of money to me and, I suppose, to you, but it is less than 1/5 of 1 percent of his total wealth of $24.9 billion.  Adelson originally supported Newt Gingrich, and now supports Mitt Romney.

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The largest super-PAC is Restore Our Future, which has raised $82.2 million, spent $61.9 million and supports Mitt Romney.  The second largest is Priorities USA Action, which has raised $20.7 mllion, spent $17.3 million and supports Barack Obama.

Click on Just How Small Is the Super-PAC Gazillionaires’ Club? for the full Mother Jones article by Andy Kroll and Tasneem Raja.

Click on Super PACs | Open Secrets for a list of super-PACs, who they support and how much they raised and spent.

Hat tip to Hullabaloo.

The troops support Ron Paul

The Presidential candidates who talk the most about going to war with Iran get the least in campaign contributions from the troops who would have to do the fighting.  Ron Paul, the most outspoken opponent of war with Iran, gets the most.

Political campaign donations to Ron Paul from members of the U.S. uniformed military exceed donations to Barack Obama, Mitt Romney, Newt Gingrich and Rick Santorum combined, in every branch of military service.  President Obama gets more donations than Rep. Paul from employees of the U.S. Department of Defense, which I’d guess are mainly civilians.

Click on Why Does the Military Love Ron Paul? for background on the chart in Mother Jones magazine.   The Mother Jones writer said that troopers are impressed by Ron Paul’s opposition to military intervention abroad, his libertarianism and the fact that he served as a flight surgeon in the Air Force and Air National Guard during the Vietnam era.

By the way, even though the U.S. Department of Defense is a huge bureaucracy, it is not a contradiction for libertarians to serve in armed forces, as the Mother Jones article implies.  The libertarian philosophy is that national defense is one of the few necessary and Constitutional functions of government.

Click on Military Donors Prefer Ron Paul for a report from the Center for Responsive Politics.

Click on Ron Paul gets the most military donations for an independent report from Army Times.

Hat tip for the chart to The Agitator.

Wall Street’s investment in politics

The Sunlight Foundation reported that a large and increasing fraction of political campaign contributions comes from 1 percent of 1 percent of the American people—the nearly 27,000 who give $10,000 or more in an election campaign cycle.  And a large and increasing fraction of that group comes from employees and executives of the FIRE (finance, insurance, real estate) sector, mostly elite banks and investment firms.   Contributions from these big donors increased 700 percent in the past 20 years.

The U.S. economic system is increasingly dominated by companies that buy, sell and create debt, rather than useful products and services.  Employees of these same companies are the leaders in campaign contributions, for both Republicans and Democrats.  And that is why the U.S. government, under Clinton, Bush and Obama, has been so willing to bail out the big banks from the consequences of their mistakes, and so reluctant to subject them to regulation.

Click on How the Finance, Insurance and Real Estate Sector Drove the Growth of the Political One Percent of the One Percent for the Sunlight Foundation report.

The political one percent of the one percent

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Only about 1/100th of 1 percent of the U.S. population make political contributions of $10,000 or more in any election campaign, according to the Sunlight Foundation, but they account for nearly a quarter of the total.   The largest share of that came from FIRE (finance, insurance, real estate) sector.  FIRE contributions of $10,000 or more are up 700 percent since 1990.

The average contribution by a member of the 1 percent of the 1 percent was $28,913 in 2010, the Sunlight Foundation reported; that was more than the average American’s total income, which was $26,364.

These wealthy contributors are gatekeepers of the American political process.  Their contributions to political parties rose from 18 percent of all contributions in 1990 to 32 percent in 2010, with Democrats getting a slightly higher share than Republicans.   An increasing number of federal candidates get more than half their funds from the 1 percent of the 1 percent.

About 55 percent of the 1 percent of the 1 percent are affiliated with corporations, with Goldman Sachs leading the rest.   The Sunlight Foundation found another 16 percent affiliated with law firms and lobbyists, and 18 percent “ideological” contributors, who gave to organizations such as Emily’s List, the Club for Growth and Act Blue.

The 1 percent of the 1 percent comprises just under 27,000 people.  Within that group, there is an elite of 252 who contributed between $100,000 and $500,000 toward the 2010 elections, and 15 who contributed more than $500,000.

This elite group accounted for a majority of the contributions to Republican Presidential candidates’ PACS— Mitt Romney’s Restore Our Future, Rick Perry’s Make Us Great Again, Jon Huntsman’s Our Destiny PAC, Newt Gingrich’s Winning Our Future, Ron Paul’s Embrace Liberty and Rick Santorum’s Red, White and Blue Fund.

Click on The Political One Percent of the One Percent for the Sunlight Foundation’s full report.

Click on How the Finance, Insurance and Real Estate Sector Drove the Growth of the One Percent of the One Percent for the Sunlight Foundation’s follow-up report.

Click on Presidential Super PACS almost entirely funded by six-figure contributions for a report on the 2012 Republican candidates by Talking Points Memo.

Congress for sale: The new money game

Big money has always influenced American politics.  But today this power of money has reached heights not seen since the Gilded Age of corruption in the late 19th century.  Political scientist Thomas Ferguson, in a paper entitled “Politicians Never Bowl Alone,” published earlier this year, spelled out how the new money game originated in the 1990s and how it works.

[House Speaker Newt] Gingrich and his leadership team, which included Dick Armey and Tom (“the Hammer”) DeLay …implemented a formal “pay to play” system that had both inside and outside components. 

On the outside, DeLay and other GOP leaders, including Grover Norquist, who headed Americans for Tax Reform, mounted a vast campaign (the so called “K Street Project”) to defund the Democrats directly by pressuring businesses to cut off donations and avoid retaining Democrats as lobbyists.

Inside the House, Gingrich made fundraising for the party a requirement for choice committee assignments.  The implications of auctioning off key positions within Congress mostly escaped attention, as did the subsequent evolution of the system into one of what amounted to posted prices ….

The K-Street project ultimately fizzled.  Big donors were unwilling to give up the power to influence both parties.

By contrast, the changes in House procedures and rules that the Republicans instituted proved durable.   Democrats rapidly emulated the formal “pay to play” system for House committee assignments, leading to a sharp rise in campaign contributions from members of Congress of both parties to their colleagues and the national fundraising committees.  Soon leaders of the Democrats, too, were posting prices for plum committee assignments and chairmanships.  They also centralized power in the leadership, which had wide discretion in how it treated bills and more leverage over individual members.

I don’t think it is a coincidence that the rise of “pay to play” coincided with the financialization of the U.S. economy and the growing concentration of income among 1 percent of Americans.