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Posts Tagged ‘Corporations’

SuperPacs and Cynicism and Disgust with the Democratic Process

January 5, 2012 2 comments

I don’t know if the five Supreme Court justices who signed off on the Citizen’s United case have been reading the newspapers and watching cable, but the effect of the ruling has been on full display over the past month and things are not going according to the high court’s rose-colored-glasses view that unlimited political expenditures are harmless expressions of free speech.

The ruling that gave corporations and labor unions the right to spend unlimited amounts of money on political campaigns assumed a number of things.  Justice Anthony Kennedy, for example, denied it would “give rise to corruption or the appearance of corruption.”   And that was because the public would know where the money was coming from and because candidates and so-called “Super Pacs” (PAC= Political Action Committees) would never coordinate.  Please.

The candidacy of Newt Gingrich was destroyed in Iowa with $4 million in withering negative ads from PACS supporting Mitt Romney.  The brief Gingrich resurgence following the death of the Herman Cain campaign was sliced and diced by the assault, cutting the former House Speaker’s poll numbers by half. 

Direct coordination with the Romney campaign would be illegal, of course.  But as the Washington Post’s Ruth Marcus points out, there’s darned near a shadow campaign staff operating the Romney PAC called “Restore our Future.” 

The committee is run by Carl Forti, political director of Romney’s 2008 campaign. Its treasurer is Charles Spies, the Romney 2008 general counsel. Its fundraiser, Steve Roche, headed the Romney 2012 finance team until jumping to the super PAC last summer. And to underscore the flimsiness of the PAC’s supposed independence, Romney himself has spoken at “Restore Our Future” events.

Yet up-to-date information about who is bankrolling this effort will not be available until the end of January, by which point four states will have voted and Romney may have the nomination wrapped up.

And it’s not just Republicans.  Former Obama aides run a PAC called Priorities USA which has already been releasing nasty anti-Romney ads.  One can only imagine the slime and dirt that will fill our TV screens and radio dials this fall from all the Super Pacs that are out there .   

In a very insightful article in Slate.com, Dahlia Lithwick, writes that even some state courts are beginning to question the wisdom of the Citizen’s United ruling.  The Montana Supreme Court, for example, has recently ruled by a vote of 5-2 that corporations are not people and that to assume unlimited political expenditures are benign goes against well over a century and a half of practice in Montana state politics.

Chief Justice Mike McGrath dove deep into that history, ranging back over the “tumultuous years … marked by rough contests for political and economic domination primarily in the mining center of Butte, between mining and industrial enterprises controlled by foreign trusts or corporations.” Noting that, back in the last Gilded Age, Montana’s wealthy “Copper Kings” bought judges and senators, picked the location of the capital, and owned the media, McGrath pointed to Montana’s vast size, sparse population, low-cost elections, and long history of having its resources plundered by foreign corporate interests to emphasize that the state has a compelling interest in maintaining its ban.

The sad fact is that negative campaigning and advertising are hideously effective and only nominally based on any discernible truth.  To not be able to identify who’s putting up the money for these organizations that put out these ads means there is absolutely no accountability for them.  Nor will we be able to tell how the donations by anonymous individuals impact the candidate once they become an office holder and are in a position to make public policy that may benefit those contributors.

At a critical juncture in our history and our economy, when fundamental philosophical views need to be aired, debated and decided- we may, instead, be reacting to and basing our votes on the primal, negative personal attacks of politicians on one another.

That we will be hip-deep in this kind of swill from now until November can only increase the already deep cynicism the public feels about politics and government.  Watching how it’s actually playing out, a great public disservice may have been committed in the name of free speech when the Supreme Court made the Citizen’s United ruling. It is eroding -not helping- the function of a healthy democracy.

Cash Hoarding is Killing the Economy

 

It’s a horrendous vicious cycle.  Major corporations, including banks, have the largest cash reserves on record waiting for an economic upturn to happen that will never occur if they don’t spend the money they’re hoarding to hire people and lend to homeowners and small businesses.

It is a self-defeating psychology.  Absent the political leadership that could potentially inspire business leaders to do what’s right, not only for the American people, but for the health of their own businesses- the cycle may wipe us out.

In the U.S., the efforts have been half-hearted.  On December 14, 2009, President Obama called the leaders of the American banking industry into the oval office for what was billed as a good old-fashioned visit to the woodshed.  I blogged about it here that day.  What became of it?  Absolutely nothing. 

All the right words were said.  The President lectured the banking leaders that it was their responsibility to give back to the American taxpayers  who bailed them out of the problems the banks themselves caused back when they were lending money like drunken sailors and creating phony and creaky investment instruments that brought the American economy to the brink of another great depression.  

The bankers left the oval office after having their tea and cookies and proceeded to continue not lending, to hoard cash, and to help build up those liquid reserves by nickel and diming their poor and increasingly jobless customers with invented fees and skyrocketing overdraft charges.

It’s hard to overstate the importance of banks in our current economic situation.  They lend money to small businesses who hire about 60% of the American work force…and they are not writing loans.   The housing market has now entered its second recession because homebuyers with good credit and sterling backgrounds are being turned down by banks.  So-called lending institutions have gone from predatory practices and inflating people’s financial assets and salaries to denying loans to families with solid credit scores and legitimate stability.

It’s not all banks.  Major non-financial corporations are stashing money under the mattress too.  They are not investing in new tools or products or hiring people.  And if you’ve checked out interest rates lately—they’re practically at zero.  Corporations are not exactly getting a good return on all the cash they’re hoarding these days.  It’s a stupid strategy.

The time to start lending and investing and hiring is NOW.  There is no greater bully pulpit in the world than the oval office and it’s high time the President exercised leadership and used some of that vaunted soaring oratory that got him elected in the first place to charm, cajole and otherwise inspire America’s business leaders into doing what’s right for their country, and in the end, what’s good for their own bottom lines.