The Campaign Finance Crisis That Isn’t

April 26th, 2010 at 6:00 am | 20 Comments |

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Right now, the United States is fighting two wars, soaring budget deficits, double digit unemployment, and climate change. So why is the White House, aided by Senator Chuck Schumer as well as Reps. Chris Van Hollen and Mike Castle, worrying about trying to respond to a Supreme Court decision that will have little practical impact on American elections at the national level? President Obama’s dogmatic insistence on rolling back the Court’s decision in Citizens United. v. FEC is populist politics at its worst. America has far too many problems for the President and Congress to be attacking problems of their own conjuring.

This week, Schumer and company plan to unveil a bill, the Democracy is Strengthened by Casting Light on Spending in Elections Act (DISCLOSE).  The act begins as follows:

The Supreme Court, in a 5-4 decision on January 21 (Citizens United v. Federal Election Commission), overturned decades of campaign finance law and policy, and will now allow special interest money to overwhelm our system and corrode our democracy. We cannot sit by and watch this money flood our system.

Got hyperbole?

Here is the reality: the White House and its Congressional allies drastically overestimate the amount of money that so called major corporations will be willing to spend on elections. Does anyone really think that the CEO of a Fortune 500 is going to be stupid enough to fund campaign advertisements? Think about it logically. It’s hard to imagine a more “Red” corporation than Wal-Mart. But consider the following facts: Each week, about 100 million Americans head to Wal-Mart to shop. A poll in 2004 found that 76% of voters that shop at Wal-Mart once a week voted for Bush. That’s an astonishing margin. But that still means that 24% of Wal-Mart shoppers voted for someone else (23% said they voted for Kerry). If you do the math, if 100 million customers make it to Wal-Mart next week, 23 million might be liberals. If Wal-Mart runs an advertisement supporting a candidate or makes campaign contributions to a candidate, it runs the risk that the New York Times finds out about it, puts a story on the front page, and as a result, 23 million of their customers may take their business elsewhere. Not only that, if they contribute, and then lose, they have pissed off the other party unnecessarily. Tell me, what good does that do?

A major corporation with major spending power would stand to gain very little from attempting to tip the balance of a few House or Senate races. One angry Senator or Congressman might do far more damage than one Congressional or Senatorial friendly ever could. If Harry Reid likes Wal-Mart, he might quietly lobby for a bill that it favors among his colleagues. If Harry Reid decides he hates Wal-Mart, Senator Reid can enlist several of his allies to launch nationally televised Senate hearings into Wal-Mart’s labor and hiring practices. He can author and propose legislation that aims to harm Wal-Mart specifically. This legislation may not pass, but the mere fact that he proposes it would generate bad publicity for Wal-Mart.

The same applies to banks. The banks stand to gain little from putting institutional weight behind a particular candidate. Aside from the fact that no candidate in his or her right mind would be excited to hear that Goldman Sachs is running television ads supporting their candidacy, it simply isn’t in the institutional interests of an organization like Goldman to enter the political fray. If Goldman Sachs annoys the Obama Administration by supporting Mike Huckabee for President, and Mike Huckabee loses, Goldman is probably in trouble. If Mike Huckabee wins, then maybe he leaves them alone… until the Democrats come back to power on an anti-bank, populist message and proceed to regulate the hell out of investment banks.

Contrary to the Administration’s claims, the Citizens United v. FEC decision isn’t going to lead to some flood of corporate money. America is a politically polarized country, and advocating for a candidate from one party risks alienating not only the candidate they oppose but literally fifty percent of Americans. Major corporations would have to be unfathomably stupid to risk associating their brand with a political party.

So while a very few corporations may spend a relatively small amount of political money this coming election season, the idea that the Court’s decision in Citizens United (regardless of your opinion on its legal reasoning) is going to give way to a tsunami of corporate influence over the electoral process is dubious. That the Democrats are making this a priority at a time when there are so many important issues competing for the government’s attention is not only idiotic, but also cynical and insulting.

Recent Posts by Jeb Golinkin



20 Comments so far ↓

  • Slide

    This is probably one of the most naive posts I have read in a while. So Golinkin doesn’t think corporations will try to influence our politics if they have unlimited ability to donate to campaigns?

  • TerryF98

    If this is the case why did McConnell and friends meet with 24 Wall Street Execs? Surely it was not to solicit campaign cash and political advertising under the Corporations are now people ruling.

    If you don;t think this ruling will make a big change in the way Corporations shovel cash towards politicians who are willing to do their bidding I have some swamp land to sell you.

  • lloyd

    If the SCOTUS ruling doesn’t make any difference, than it won’t make any difference if we roll it back.

    On the other hand, it sure is a good thing America has the Republican Party around to stand up for the interests of the beleaguered corporations.

  • ottovbvs

    …….this was a staggering decision by a court of activist conservative judges that over turned a century of precedent……of course corporations are going to use money to influence elections which is why the US political system is already widely regarded as a system of legalized bribery…..this just makes it worse…….I suspect in the long run it won’t hold either because the courst swings back in a more traditional direction or big business over reaches and there a series of scandals…..probably some combination of the two.

  • Sunny

    All of it just needs a little sunshine. That’s all. No funneling money through shells.
    Then it’s all peachy.
    Because the “corporations” which are mostly interested in direct participation in elections are the advocacy groups — the NRA and the NOW; environmental groups and pro-life groups and pro-choice groups and small business groups and so forth.

  • YuriPup

    I think you miss a couple of major points.

    State and local elections have far, far less money in them and even a small marketing/advertising buy shunted into local and state elections would have a serious effect. Is it ok for WalMart to spend a $1,000,000 on a local zoning race to get members that support it? Remember that $1,000,000 is a drop in the bucket for WalMart and would probably be enough to buy all of a state’s legislature.

    Keep in mind that yearly, the US spends about $500 billion on marketing. The 2008 Presidential cycle cost 0.2% of that.

    Additionally you assume the money can actually be traced back to its original sources–an assumption that I am not sure is valid.

    And you are declaring the problem dead before we have even had the 2010 elections, much less the 2012.

    And what of companies that don’t care about their public image? Just how many consumer products do you by from Lockheed? Or Boeing? Koch Industries? Massey Energy?

    To declare this a dead problem before the marketing folks have had a year or two or ten or one hundred is premature.

  • fracguru

    Anyone who uses the “don’t we have more important things to worry about?” argument has already lost the debate.

    Are you saying that Congress doesn’t have the time to address the campaign finance issue? That the NOTHING else besides what you deem worthy should be dealt with?

    Weak.

  • sinz54

    Let’s talk about the specifics of Schumer’s bill, the “Democracy is Strengthened by Casting Light on Spending in Elections Act (DISCLOSE) Act,” rather than waving our hands about generalities.

    Politico.com has summarized Schumer’s bill here:

    http://www.politico.com/news/stories/0410/36303.html

    The most extreme section of this bill is the part that says that any company that has a government contract worth more than $50,000 will be barred from campaign contributions, period.

    That, to me, is just absurd. These days, given the huge size of the Federal government, zillions of companies do business with the Government. Even Google. Even Apple.

    This means that any company that sells iPods or iPads or reams of paper or Coca-Cola or office furniture or any other common items to the Federal Government will be banned from campaign contributions. Thousands of companies will be muzzled for no good reason. (Does anybody think that if Staples.com sells office products to the Federal Government, they should not be allowed to support some candidate running for city council? Why?)

    And it goes way beyond any of the existing precedents that it is claimed the Supreme Court had overturned.

    Why doesn’t Schumer just come out and admit he doesn’t want corporations to contribute money to political campaigns. That is what his bill does. And it will very likely be struck down by the Supreme Court again.

  • ottovbvs

    sinz54 // Apr 26, 2010 at 9:24 am

    “Thousands of companies will be muzzled for no good reason.”

    ……Sinz obviously like the idea of the govt being owned by corporations rather citizens….he obviously labors under the misapprehension that his voice is as strong as Coca Cola’s

    “And it goes way beyond any of the existing precedents that it is claimed the Supreme Court had overturned.”

    ……..Er it’s not a claim……it’s a matter of fact as even many conservative legal authorities have agreed and celebrated.

  • LauraNo

    If, if, if. If anything. We need to KNOW what corps can and cannot do. If it’s possible, some will do it. ‘If’ you can’t imagine Koch Industries funding whomever they want, you must have blinders on. They do not need to worry about their customer’s sensibilities. This is the weakest argument in defense of that horrible activist SCOTUS decision I’ve come across.

  • balconesfault

    “Thousands of companies will be muzzled for no good reason.”

    Seems to me that if these companies are relying on government for a large revenue stream, that they have an interest in increasing the amount of money government pumps into that revenue stream.

    There’s an easy way to take off the muzzle – restrict your sales to private clients.

  • ottovbvs

    balconesfault // Apr 26, 2010 at 10:24 am

    “Seems to me that if these companies are relying on government for a large revenue stream, that they have an interest in increasing the amount of money government pumps into that revenue stream.”

    …….Here you put your finger on another one of those fundamental contradictions in the conservative position…….obviously if you enable companies to fund political activity this is generally going to encourage more govt spending since this boosts their profits ……conservatives claim to want to reduce govt spending but are actually giving companies tools to increase it.

    …….It’s like the other fundamental flaw enunciated by Hayek in his road to serfdom which is by way of a conservative free market handbook (although a handbook I suspect more conservatives know the title of than have actually read)…….Hayek says and conservatives allegedly believe that free markets reinforce social conservatism when in fact the reverse is true…….unfettered free markets destroy traditional economic hierarchies and produce a lowest common denominator effect in social behavior.

  • balconesfault

    unfettered free markets destroy traditional economic hierarchies and produce a lowest common denominator effect in social behavior

    Why does that suddenly remind me of this?

  • ottovbvs

    balconesfault // Apr 26, 2010 at 10:58 am

    ” Why does that suddenly remind me of this?”

    …….So true…….does anyone seriously suggest broadcast standards are higher today than when Laurence Welk was entertaining our parents…….I was reading a book recently given to me by one of my British relations about the entire destruction of traditional patterns of British behavior being one of the unintended consequences of Thatcher’s free market policies (she was very high on Hayek)……she thought she was turning the clock back to the cosy 50′s of her young womanhood when in fact she was destroying a set of British mores that had been largely created in the Victorian age and still held a strong grip despite the swinging sixties

  • JosephP

    Jeb Golinkin is either an evil mendacious corporate operative, or he is the most naive person on the planet.

    “The banks stand to gain little from putting institutional weight behind a particular candidate.”

    “…it simply isn’t in the institutional interests of an organization like Goldman to enter the political fray.”

    I rest my case.

  • ottovbvs

    JosephP // Apr 26, 2010 at 12:41 pm

    “Jeb Golinkin is either an evil mendacious corporate operative, or he is the most naive person on the planet.”

    ……I’d say the latter attempting to be the former…… and not making a very good job of it.

  • sinz54

    ottovbs: obviously if you enable companies to fund political activity this is generally going to encourage more govt spending since this boosts their profits
    By that logic,

    you also need to ban all political activity by public-employee unions, who also have a vested interest in increasing their numbers and the money they make.

    Would you go along with that?

    I might consider a Grand Bargain: Get BOTH the unions and the corporations out of political activity.

    I know my voice isn’t as strong as that of AFSCME.
    Neither is yours.

  • balconesfault

    you also need to ban all political activity by public-employee unions, who also have a vested interest in increasing their numbers and the money they make.

    But public employee unions are one employee, one vote.

    Corporations are one dollar, one vote.

    Has it really become a tenant of the Republican Party that wealth is more important than people?

  • Brad Smith

    Before Citizens United, 26 states, representing a majority of the nation’s population, already allowed unlimited corporate expenditures in state and local elections (two more states allowed limited corporate expenditures). Yet none of the horror stories of the left, many repeated here, had come true. Indeed, according to Governing Magazine, financed by the oh so pro-campaign finance reform Pew Charitable Trust, the six best governed states in the country all have long allowed unlimited corporate expenditures in campaigns.

    Ottovbs doesn’t know what he’s talking about when he argues that corporate spending on politics will increase government spending. This is an empirical question, and the evidence shows that his assertion is not true.

    This is not to say that Citizens United is not an important decision. There will be more corporate (and union) spending. Those of us who believe in free speech will see this as a good thing. Those who don’t like to hear voices they disagree with, like Otto, will find ways to argue that this is a bad thing, but in the end their arguments always come down to the fact that they don’t like the message they think will be delivered.

  • amazed foreigner

    How can you be so naive? Did you ever asked yourself wether corporations have any sense of patriotism?
    If you do you, you quickly realize they don’t, they have a very simple utility function, maximize their profit but the future of your country they absolutely do not care about. Just wait long enough and they will move their corporate centers wherever the happy few top manager can max their income.

    For conservative patriots who claim that they want their country back, this is a pretty odd starting point to let corporations run the show.

    I am sorry but looking at America as an outsider I can only observe the damage that continuous campaining, fundraising and lobbying is doing to your political system. The supreme court decision is just another move toward the sacralization of corporation in america and another victory of wealth over people