The Citizens United Will Never Be Defeated
OMB head Peter Orszag is giving a press conference just now with Christina Romer, head of the Council of Economic Advisors, on the president’s Fiscal Year 2011 budget. Ms Romer explained the economic assumptions underlining the budget forecasts. She noted that expected fourth quarter-over-fourth quarter real GDP growth would be 3% in 2010, 4.3% in 2011 and 2012, and would average 3.8% in the five years thereafter. These figures are in line with Fed projections.
She then gave the unemployment forecast. At the end of 2010, the unemployment rate, according to the administration’s forecast, will be 9.8%. At the end of 2011, the rate will be at 8.9%. And at the end of 2012, after the next presidential election, the unemployment rate will be 7.9%.
As Kevin Drum says: good god.
For comparison’s sake, Canadian rates of unemployment, which begn a sharp fall towards the end of 2008 and continued falling, with some minor flucuations, throughout 2009 have already started to improve. And while stagnant through December (no real surprise there), are already at levels that the US isn’t forecasted to reach until the end of 2011.
That’s a lot of hurting for a lot of American families going on out there and I think it paints a pretty stark picture on a dance to which I’m quite late due to some wrestling and struggling I’ve been doing. It’s hard not to be angry when the majority of the population is facing economic hardship of that magnitude and the major corporations that in no small part caused that hardship are set to hand out record bonuses to their top executives. It also makes it a little hard to swallow the grim narrative that is health care reform when one looks at the degree of money spent and influence exerted by lobbyist that went into shaping the contours of the debate.
So while I understand the cries of joy sounded by free speech advocates over the Citizens United decision, I think you have to look at the decision from the context in which it was delivered: overwhelming and blatant use of resources and influence by monied interests to help shape a desired outcome and an economic disparity more stark and brutal than seen perhaps since the 1930s. One can understand why people might be upset about the idea of relaxing the rules to allow more corporate money enter a system that already seems already rigged to favour monied interests to a large degree.
A ways back at True/Slant, E.D. noted,
My take is essentially that the wailing and gnashing of teeth over this ruling is greatly overblown. No, this is not the end of American democracy as we know it. Yes, this is a victory for free speech. Big corporations already had the ability to get around the campaign finance regulations we had in place by forming PAC’s among other things. McCain-Feingold did absolutely nothing whatsoever to prevent this.
And Mark here at the League has described much of the liberal reaction to Citizens United as “hyperventilating”. But look, doing so is, again, to totally miss the context of the decision. This issue isn’t occurring in a vacuum of perfect legal purity, there are extenuating circumstances that have a bearing on how people perceive and interpret the possible impacts and reasons behind the decision.
I agree with Erik that this doesn’t hearken the end of American democracy and it is also true that monied interests already had a number of loopholes of which to advantage in terms of exerting political influence, but for anyting that Erik describes the decision as doing, it also further entrenches a fundamental problem with the political system in question at a time when people are a.) really and truly hurting in a significant fashion, b.) angry that they seem to be hurting due in large part to the actions of precisely those who are benefiting from this decision, c.) that very little seems to be taking place to address the hurt caused by those actions, and d.) much of what is taking place is only reinforcing the system that allowed that hurt to happen.
Call me crazy, but that seems like a reasonable case for being upset, victories of freedom of speech for entities that didn’t seem to be having many troubles in exerting their speech in a magnified way not withstanding. And look, I know I’m not sounding any new trumpets here, but I thought it was important to point that context out and how it plays into people’s reaction to Citizens United, especially in the light of the economic realities that people are facing as represented by those unemployment projections.
At the end of his piece, Drum says, “Our economy is going to stay fragile for a very long time. I sure hope our banking system can handle that. Our political system too.” Without forwarding heartless claims about the benefits of just letting everything meltdown, I have to wonder: given the current dysfunction of the American political system, is that something to which you really want to wish longevity?
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22 comments
I believe you are misreading the situation. First, people aren’t mad at businesses, per se, they are mad at government favoring some corporations and industries over others. This may be what you were saying, but it helps to understand where the anger is directed. Not all buinesses receive government favors and protection — many are hampered by government actions. Secondly, the Democrats are now in position to give businesses favors, and protecting free speech has nothing to do with this trend — it’s done more in backrooms where the progressives are strengthening their favorite and useful industries and particular companies. The winners will be in an exclusive club protected by statist policies. To disempower the voices of small businesses and disfavored industries and businesses, who will not be able to compete under progressive control, will hurt not only the businesses, but the millions of people unemployed who need open competiton to be a reality so that companies can thrive and hire.
Plus, the ability of corporations to spend money influencing voting and policies has little effect on outcomes — the influence peddling is done below the radar, and is now being guided by the progressive agenda. If healthcare reform and cap and trade passes, you will see the results of the deals. But no one votes for a candidate based on an ad, anymore — ad campaigns are a wasteful carry-over from old marketing ideas. The Information Age has rolled over old-style marketing, even if it was effective before, which is doubtful.
Here’s my thing, though – what is the basis for the claim that the Citizens United decision will actually make things worse? If things have gotten this bad after the campaign finance reform of the last 35 years, what’s the basis for believing that campaign finance reform has even slowed things down, much less made things better? Indeed, isn’t it at least reasonable to ask whether campaign finance reform has contributed to the problem rather than making it better or slowing it down?
Instead, it’s just assumed that CFR has made things better – the question of how it has made things better or at least kept things from getting even worse is left unanswered whenever asked. This goes to a larger point about government in general as well – when a policy is implemented, it is just assumed that it has worked as advertised. If the promised results do not appear, then the goalposts just get shifted to “well, it was working, but the problem was even worse than we thought, so the policy clearly kept things from being even worse.” Meanwhile, those who warned against the policy in the first place and suggest that it has been counterproductive or ineffective with unintended consequences are dismissed as somehow unserious and in fact enablers of the problem.
As for the free speech issue, the argument isn’t that these restrictions prevent big guns from speaking, but rather that they have nasty effects on small and medium guns, shutting them out of the process even more. Indeed, the argument is that these restrictions just cement the two-party system and even makes the existing two parties even more heavily reliant on the largest corporations.
If you accept this argument as true, then it would come as no surprise that almost no one is more heavily influenced by the powerful telecom lobby than the leading sponsor of campaign finance reform:
http://www.usatoday.com/news/politics/election2008/2008-03-23-mccainlobbyists_N.htm
Jaybird
February 2nd, 2010 at 2:16 pm
Amen. Amen!
The problem is that overturning McCain-Feingold is not seen as an overturning of what McCain-Feingold actually did, but it’s seen as opposition against what McCain-Feingold intended to do.
The things that McCain-Feingold made worse are waved away. “You can’t make an omelet” and so on. The bill was actually a proverbial finger in the proverbial dike.
My own limitation is that when I try to imagine how many broken eggs we’d have if we didn’t try to make these omelets, the number I tend to come up with is “fewer”.
Michael Drew
February 3rd, 2010 at 12:33 am
I think I just realized where much of the disconnect of the last weeks lies. Campaign finance and lobbying are different things. And McCain-Feingold sought to reform only one of them substantially. Arguably it is the machinations of the one that it did not that has mostly captured Washington. Would you agree with thins?
Mark Thompson
February 3rd, 2010 at 8:17 am
Yes and no. Lobbying reforms have been pushed, with more success and less publicity, for years (where by success I mean “able to pass,” rather than “effective”). Few of these reforms are controversial, as they usually take the form of registration and disclosure requirements or restrictions on gifts. There is, however, not much more that can be done as a practical matter other than prohibiting lobbying altogether, which would be a very clear violation of the First Amendment right to petition, or making the existing types of restrictions tougher, which isn’t Constitutionally very problematic but will also have very limited benefit.
In some ways, one could even argue that Campaign Finance Reform makes the lobbying issue worse rather than better. Between 2001, when McCain-Feingold was passed, and 2008, total lobbying expenditures increased from $1.6 billion to $3.30 billion, an average increase of about $225 million per year. In 2009, there was a slight decrease to $3.18 billion, although that number is preliminary.
http://www.opensecrets.org/lobby/index.php
By contrast, between 1998-1999, the earliest years for which Open Secrets lists data, lobbying expenditures stayed steady at $1.44 billion, increasing to $1.55 billion in 2000 and to $1.63 billion in 2001.
One could argue that campaign finance reform had the unintended consequence of forcing above the table public lobbying efforts (ie, electioneering, party contributions) into behind-closed-doors lobbying efforts.
Beyond that, there’s not any evidence that BCRA slowed the pace of corporate influence over elections. Again, using the Center for Responsive Politics’ numbers (http://www.opensecrets.org/news/2010/02/center-for-responsive-politics-9.html), we see that between 1991 and 2002, soft money expenditures by corporations amounted to approximately $1 billion, or around $83 million per year. By comparison, during the 2005-2008 election cycle, corporate PAC independent expenditures were $465 million, or around $115 million per year.
All that said, I am completely in favor of strengthening disclosure requirements for elections, including independent expenditures, which I think would have a significant positive effect. Indeed, although I disagree with the Center for Responsive Politics on the value of CFR and on the merits of the Citizens United decision, I pretty much completely agree with their recommendations contained in the second link above.
Michael Drew
February 3rd, 2010 at 8:31 am
Thanks. Much there to consider. By lobbying expenditures, do we mean corporate payments to lobbying firms, or operating expenditures by lobbying firms (I suppose to be running a business of any kind that someone would actually patronize, those two figures would have to be sort of close, wouldn’t they? I guess I’m realizing I’m not even clear what expenditures/payments are made in the activity of “lobbying” that can amount to such volumes. Are they simply routing cash from corporations to campaigns through the legal avenues available?
Mark Thompson
February 3rd, 2010 at 9:05 am
For the most part, you’re looking at either payments to lobbying firms or in-house lobbyist salaries from the corporation or non-profit. Operating expenses of lobbying firms would not be included in the overall numbers.
Meh. Actually, I’m going to have to disagree with a number of things here.
1.) I don’t meant to trivialize the great number of people who are suffering economic hardship, but “It’s hard not to be angry when the majority of the population is facing economic hardship of that magnitude” is hyperbolic.
A majority of the population isn’t facing economic hardship and the sooner we realize that a hurting America looks a lot freer and fuller than say Mozambique where a majority of people don’t just face economic hardship but are actually unemployed and don’t have a government that can feed them nonetheless, the better.
2.) “I think you have to look at the decision from the context in which it was delivered: overwhelming and blatant use of resources and influence by monied interests to help shape a desired outcome.”
Yes but a fair chunk of that $166 million on advertising and presumably the other amounts has been money for health care. There’s no telling how those efforts have buoyed public support for the public option or helped Pelosi keep the House in line. Moreover, the anger that people feel about outside groups spending money – I would bet – is less than the anger people felt about taxpayer money being used to get Ben Nelson’s vote. On one hand there’s anger about the resources and influence of monied interests. On the other there’s anger about the resources and influence of “the taxpayers” being used for the same.
3.) “an economic disparity more stark and brutal than seen perhaps since the 1930s.”
Which then was the starkest and most brutal economic disparity seen since the 1880’s. Which was then the starkest and most brutal economic disparity since…. You can keep brushing dust of the title of this book but history has been defined far longer and by far more people by economic disparity than it has by the declines in such disparity certain Western countries saw during the 20th century.
I bring this up because it seems ahistorical to view economic disparity as particularly reprehensible. Also, the rise of the middle class and decline in wealth inequality here in America coincided with a time when America’s relative wealth vastly outmatched other societies. In that same global context, the global middle class has grown tremendously in the past 10-15 years, even as America’s hasn’t. I think it’s worth asking whether there’s any relationship, before assuming we can have our cake and eat it too.
4.) “Call me crazy, but that seems like a reasonable case for being upset, victories of freedom of speech for entities that didn’t seem to be having many troubles in exerting their speech in a magnified way not withstanding.”
That’s fair but I really think that whatever the “context” is those feelings you reference are being exploited through demagoguery and exaggerations of Citizens United.
The ruling will likely reduce litigation and compliance costs for big businesses but as a proportion, it’ll be far more beneficial to groups like the Sierra Club or organized advocates for Same Sex Marriage than it will be for Exxon or Citigroup. Not to mention there’s no evidence that big business will spend more rather than spend differently.
Shorter: I think the anger and frustration is ill-placed, founded on an Ameri-centric sense of entitlement to the spoils of global affluence, and often exploited by manipulative demagogues. Certainly you can explain the context but I find it to be somewhat manufactured.
It’s hard to know who’s in the group upset over Citizens United. I do know a number of people who are struggling “back home” in the US, but none of them have mentioned the ruling. But, they’re also all Republicans, which is probably skewing it. It would be interesting to see a poll about it. I don’t even know if I’ve heard a discussion about it in the offline world. Of course, I don’t watch cable news and maybe it’s a really hot topic right now.
Inequality means that political power and economic decision making is concentrated into the hands of fewer people. If you believe in oligopolies, that is the way to go.
Mike-A lot of us are angry with financial corporations. They made billions using faulty models and excessive risk taking. What rational person thought that DADT loans would work?
Steve
mike farmer
February 2nd, 2010 at 8:19 pm
“Mike-A lot of us are angry with financial corporations. They made billions using faulty models and excessive risk taking. What rational person thought that DADT loans would work?”
The risk-taking is part of corporate protection — without implied government backing, facing the prospect of complete failure, no amount of political pressure to lower lending standards to increase homeownership would have generated such sloppy lending practices with billions of dollars at stake. Now, they are pushing for a second crisis, because the implied backing has not been removed and the pressure to loan is still on. You can blame the financial institutions, but without the context of government involvement, it makes no sense. The banks were foolish to mix politics and business, but they never would have if they had known for certain that failure would be on their backs, not ours.
Art Deco
February 2nd, 2010 at 9:43 pm
I cannot say what the pressure is. If you look here:
http://www.federalreserve.gov/econresdata/releases/mortoutstand/current.htm
you see that outstanding mortgage debt has been undergoing a slow decline of late.
Here:
http://www.federalreserve.gov/releases/g19/current/g19.htm
Shows a decline in the stock of consumer credit extended;
and here:
http://www.federalreserve.gov/releases/housedebt/default.htm
show the evolution of household debt-service ratios (in a downward direction over the last two years).
Michael Drew
February 3rd, 2010 at 12:26 am
They’ll always know they have implicit backing as long as they know they are TBTF.
mike farmer
February 3rd, 2010 at 5:55 am
Exactly — it basically tells big-ass banks with political connections — “You are now partners in the Great American Heist”. The Geithner Gang is not through — why do they rob taxpayers? That’s where the money is — Duh
Michael Drew
February 3rd, 2010 at 6:32 am
But they actually are too damn big for any gov’t to let them fail. They’re not going to voluntarily disaggregate themselves. So it’s government action on one end or the other — pick your poison.
mike farmer
February 3rd, 2010 at 7:10 am
The only poison is to stop corporate welfare — competition will make them much smaller, almost invisible..
Michael Drew
February 3rd, 2010 at 7:32 am
Mmm.
Scott
February 3rd, 2010 at 7:19 am
Steve:
Any attempt to make a profit involves risk. Also, I”m not not sure how you or other people would define “excessive” risk. To some liberals, anything is “excessive” risk.
mike farmer
February 3rd, 2010 at 10:37 am
I agree Scott, but with implied government backing to offset failure, calculated risks in a free market become the irrational risks of betting with other people’s money.
Because people are not spending. But the government is pressuring lenders to lend — you haven’t heard the president berating banks?. I suppose there are no suckers left — fool me once, shame on you — fool me twice, shame on me.
Art, the point is that easy money, low interest rates and implied backing created the risks which led to the crisis — if the government had it’s way now, it would lead to another crisis — but, hopefully, in spite of the government’s pressure for more lending and borrowing, in order to give the impression of recovery for political purposes, lenders and borrowers are resisting it.
One more link to go with yours — http://www.marketwatch.com/story/fannie-freddie-to-be-used-to-prop-up-housing-more-2009-12-28