Who Pays, Who Profits ...when Campaigns are Funded by Wall Street
January 15, 2010
In a January 14 blog post also run on the Huffington Post site (“Why Obama Must Take On Wall Street”), former labor secretary Robert Reich (a Clinton appointee and eventual economic adviser and major supporter of the Obama campaign) laments that practically nothing has been done in the past year and a quarter to keep the 2008 worldwide economic crisis from happening all over again. No restrictions have been applied to keep Wall Street from gambling on wild bets like the ones that led to the crisis, and the biggest players (Citigroup, Bank of America, JPMorgan Chase, Goldman Sachs, and Morgan Stanley) have been told they’re “too big to fail.” Reich argues that such a guarantee they’ll be “bailed out [again] by taxpayers if they get into trouble” gives these institutions “every incentive to make even riskier bets.”
Reich goes on to discuss the many loopholes and limits of the proposed House “Wall Street Reform” bill; the lack of desire among lawmakers to reinstate “the wall that used to exist between commercial and investment banking” that was dismantled by 1999 deregulation; and Washington’s refusal to consider new antitrust laws that would break up the biggest players on Wall Street.
Why has our government failed to do anything to truly safeguard our long-term economic stability? The most significant obstacle, Reich states bluntly, is the “grip Wall Street has over the American political process.” According to Reich, From January through September of last year, the financial industry spent an incredible $344 million on lobbying Washington. In addition to that, Wall Street “firms and executives” paid $42 million in a one-year period (November 2008-November 2009) directly to legislators, “mostly to members of the House and Senate banking committees and House and Senate leaders.”
What is wrong with this picture? How can our legislators be expected to pass laws that are best for their constituents when they—our elected officials—have campaign coffers full of money from special interests?
It’s no secret that highly successful fundraisers are considered rising stars in their political parties. In a January 12 Denver 9News piece, local political analyst Floyd Ciruli was quoted as saying he believes Denver mayor John Hickenlooper (who was recently endorsed by Secretary of the Interior Ken Salazar and by President Obama) is an ideal Democratic candidate for the upcoming race for the Colorado governorship in part because “he is a very good fundraiser.” Our January 12 “Coloradoized” version (see below) of a New York Times piece on the New York State U.S. Senate race references the widely recognized—and lauded—fundraising efforts of current junior U.S. senators Kirsten Gillibrand of New York and Michael Bennet of Colorado: While Bennet raised more than $3 million in the first nine months of last year alone for this year’s campaign, Gillibrand has reportedly raised a to-date total of $7 million.
It’s disturbing enough that candidates seem to be judged by their parties primarily on how much money they can raise. But it’s especially disturbing when campaign fundraising figures are touted without any discussion of who contributes the largest sums and what those donors receive for such impressive contributions/investments.
As a Colorado-based initiative, Imagine A Great Election will continue to focus on 2010 statewide races for Colorado governor and for the U.S. Senate seat currently held by appointed senator Michael Bennet. In our coverage, we will analyze not just the amount of money candidates from both major parties raise, but the specific sources of significant (and often game-changing) contributions as well as what donors get for such contributions/investments. We will also follow selected national races on the same basis.
As for the many salient points raised by Reich, our May 2009 Know Something Project review of political and economic critic Kevin Phillips’ book, Bad Money, notes that Phillips agrees that Wall Street has a tight grip on Washington. During the 2008 presidential campaign, he states, Wall Street proved it had “shifted its chips” to the Democratic Party by making the donations necessary to ensure an “acceptable” administration was put in power.
It has become clear that the majority of elected officials in Washington do not have the courage to institute real change, so the voters have no choice but to educate themselves and change those elected officials who refuse to represent their constituents.
To assist the voter in learning about their elected officials’ actions, not words, we will ask and answer two simple questions:
An editorial in today’s New York Times (“A Real Election, Please”) on the race to fill a New York State U.S. Senate seat currently held by an appointed senator rings remarkably true…in Colorado. So true that its observations remain accurate when player information is switched out. Consider this Coloradoized version:
“Muscling out campaign competition is undemocratic. Yet Democratic Party insiders in Washington have spent the last year trying to scare off potential challengers to Kirsten GillibrandMichael Bennet, the junior senator from New YorkColorado. The last thing voters of New York StateColorado need is a coronation instead of a choice. “That is not an attack on Ms. Gillibrand Mr. Bennet. As a former United States representative from a conservative upstate district, she is trying to become a voice for the entire state. Denver Schools superintendent, he is incredibly well-connected and wealthy. She He also is a demon fund-raiser with more than $7 million collected, so far, who raised more than $3 million dollars in the first three quarters of last year for this year’s race. “The problem is that shehe was not elected to the job. SheHe was appointed to it a year ago by Gov. David PatersonBill Ritter when Hillary Rodham Clinton Ken Salazar resigned to become secretary of statethe interior. (Did we mention that speculation abounds thatthe White House also tried to strong-arm Mr. Paterson has successfully strong-armedMr. Ritter into giving up running for a full terma bid for re-election, too?) Any concerns about Ms. Gillibrand’sMr. Bennet’s politics and herhis abilities at the time were supposed to have been allayed by the promise that shehe would face a vigorous statewide campaign for election this year. “Enter the White House, the governor and other Democratic leaders like Charles Schumer, the senior senator from New York. One by one, potential party challengers were coaxed or even shoved out of Ms. Gillibrand’sMr. Bennet’s path. Apparently, the same forces are now at work on Harold Ford Jr.Andrew Romanoff, a Democrat and former congressman staterepresentative from TennesseeColorado who moved to New York City shortly after he lost a United States Senate race in 2006served four terms in the state House, two of them as Speaker. “The drumbeat has started: Mr. Ford’s New York roots are not strong Mr. Romanoff is more concerned with serving the people of Colorado than catering to party leaders.He has yet to vote in his new stateHe has lived and voted and served in public office in Colorado for years. The conservative comments he made in Tennessee are not in tune with New York. He is too independent; he doesn’t even accept contributions from corporate political action committees! “A spokesman for Mr. Ford issued a statement last week saying that he Romanoff won’t be “bullied or intimidated” by “party bosses.”It pointedly asked, “So what are they afraid of?” “It is a good question, a veiled accusation that Ms. GillibrandMr. Bennet is not ready to compete. It is a point that New YorkColorado Republicans will enjoy making if they can find a candidate strong enough to make it a real race in November.” Caveats:
--Mr. Romanoff may not have the courage of his alleged convictions.
--Mr. Ford has no intention of running but is merely a stalking horse for Cuomo’s run against Governor Paterson. Imagine a Great Election will continue to advocate for real elections and primaries.
In our opinion, big money not only corrupts elected officials, it impacts American life in very negative ways on levels ranging from individual savings and family homeownership to local, state, and federal government.
In this Bill Moyers Journal video, Moyers interviews long-time Ohio congresswoman and financial watchdog Marci Kaptur and MIT professor, economist, and co-founder of The Baseline ScenarioSimon Johnson on the financial crisis: its causes and history; its current impact on American taxpayers; and its future ramifications if fundamental, legitimate, and significant financial industry reform is not implemented.
Below is a sample of issues previously addressed on Imagine A Great Election that continue to have a tremendous impact on current events:
Go here for a list of questions we believe ought to be asked of every potential candidate for an open U.S. Senate seat.
Go here for a discussion of Colorado Governor Bill Ritter’s selection processes to fill vacant Secretary of State and U.S. Senate seats.
Go here for a list of President-elect Obama’s nominees and appointees for Cabinet-level positions and key White House staff.
Go here for a look at the use of Perception Management in U.S. politics.
Go here for two critical article abstracts regarding who’s to blame for the financial crisis.
Go here for an early look at the two major parties’ platforms and candidates’ perspectives regarding financial regulation reform, including the statement that the Republican National Committee “does not support government bailouts of private institutions.”