Where the Money Leads

By Zoltan Zigedy

November 7, 2014

'Traditionally in American history, politics is like a seesaw: When one side is up the other side is down,” said Peter Wehner, a former aide to President George W. Bush. “Now it's as if the seesaw is broken; the public is distrustful of both parties.” Wall Street Journal (11-04-14)

“Follow the money” is a seemingly simple, but telling popular prescription for discerning people's motives, a slogan made popular by literature and movies.

But it is more than that. It is also a useful key to unlocking the mysteries of social processes and institutions. In a society that affixes a monetary worth on everything, including opinions, ideas, and personal values, tracking dollars and cents becomes one of the best guides to our understanding of events unfolding around us.

Take elections, for example.

Every high school Civics class teaches that elections are the highest expression of democratic practices. Apart from the direct democracy of legend-- the New England town meeting or the Swiss canton assemblies-- organized secret-ballot-style elections count as the democratic ideal deeply embedded in every US school-age child's mind.

Let's put aside the arrogant high hypocrisy of US and European politicians and pundits who deride secret ballots when they result in the election of a Chavez, Morales, Maduro, or Correa. That will make for a juicy topic on another occasion.

Instead, let's examine what the flow of money tells us about the gold standard of democracy as celebrated in Europe and the US.

Surely, no one would deny that money has a profound effect upon election outcomes. That comes as old news. Even before the dominance of party politics, even before the evolution of party politics into two-party politics, money played a critical factor in advantaging issues, campaigns, and candidates.

To the extent that mass engagement-- rallies, outreach, canvassing, etc.-- could match or even trump both the corrupting and opinion-changing power of money, electoral democracy maintained an aura of legitimacy. To be sure, buying elections seems a nasty business, but as long as elections remained highly contested extravaganzas drawing interest and engagement, credibility remains intact.

New and changing technologies cast a lengthening shadow over the electoral process. News and entertainment media, like radio, were only too happy to take advertising dollars to promote electoral campaigns. At the same time, these technologies eroded the efficacy of traditional campaigns reliant upon campaign workers' sweat and shoe leather.

With television and now the Internet, the power of media and media dollars has grown exponentially. It has hardly gone unnoticed that these shifts have amplified the power of money and diminished the traditional get-out-the-vote efforts of unions, civil rights, and other people's organizations.

Most recently, the Supreme Court's Citizens United decision has opened the spigot of unregulated cash into elections, further overwhelming any counter forces to the outright purchase of candidates and election results.

Readers may find nothing new here. The sordid story of money's corrupting and deflecting influence has certainly been told before, as has the pat remedy offered by reformers. To return to the halcyon days of US electoral democracy is simply a matter of establishing financial limits on campaigns and campaign contributions. By leveling and limiting the electoral playing field, we can restore the legitimacy tainted by money.

Unfortunately, this idealistic solution will itself be overpowered by the power of money. The traditional forces in US politics are not unhappy with buying and selling political power, except insofar as their own money is not put at a disadvantage.

But the reformist panacea would not work even if it were implemented. Advocates of campaign financial reform fail to see that capitalism and informed, independent, and authentically democratic electoral processes are incompatible. Capitalism, unerringly and universally, erodes and smothers democracy. Eliminating, even significantly, reducing the power of money in politics under a capitalist system is an impossibility. The historical trajectory goes the other way.

A Broken System

Since the New Deal era, political partisanship and the accompanying flow of money was linked to Party politics. Corporations and the wealthy gave generously to opponents of the New Deal, the Republican Party. To a great extent, the people power (and significant independent money) of unions and other progressive organizations served as an adequate counterweight to the resources of the rich and powerful. The Democratic Party enjoyed the benefits of this practice.

The television and money-driven election of JF Kennedy in 1960 marked a watershed in both the diminution of issue relevancy and the maturation of political marketing. Money and the advertising and marketing attention that money bought moved to center stage. Key chains, buttons and inscribed pens were replaced by multimillion dollar television advertisements in the buying of election outcomes.

In 1964, the organic link between the money of wealth and power and the Republican Party began to stretch with the campaign of Barry Goldwater. So called “liberal Republicans” of the East Coast establishment recoiled from what they perceived as extremism, leaving Goldwater's campaign treasuries to be filled by the extreme right's wealthy godfathers in the Southwestern and Western US (The looney right rebounded to Goldwater's loss by investing heavily in rallying and expanding the 26 million Goldwater voter base and by buying a broader, louder, but less shrill voice in the media; that project paid off handsomely by 1980).

While it is understandable that donors would spend to their interests-- support candidates of shared ideology-- things began to change with the Democratic Party's retreat from New Deal economic thinking, the general decline of traditional Party politics, and the rise of the politics of celebrity and personality. With advertising and marketing domination of electoral campaigns, constructing an attractive personal narrative replaced issues and accomplishments-- contrived image replaced content.

Today, the two-party system holds electoral politics in its tight grip. And issue-driven politics has been replaced by the politics of flag pins, winning smiles and a “wholesome” family.

Undoubtedly, the decline of substance in politics further encouraged the activity of sleazy lobbyists and influence peddling. Politicians are not faced with the conflict of principles against powerful interests because electoral politics have turned away from principles.

We see the cynicism of principle in the Republican Party's rejection of its ideological zealots. So called “Tea Party” radicals sat well with the Republican corporate leaders when they were energizing electoral campaigns, but the zealots were challenged after setbacks in 2012. Today, the Republican corporate god fathers are making every effort to temper party radicalism in order to insure the only important principle: electability.

The Democratic Party, on the other hand, simply ignores its left wing, treating it alternately as an embarrassment or a stepchild. It is this trivialization of principle and ideology that channels the flow of money today.

Barren Politics

I wrote in 2008:

This election cycle has revealed something new: Democrats are raising more money from corporate interests for their campaigns than the traditionally dominant Republicans. This process began before the 2006 elections, accelerated sharply in the Presidential elections, strengthened in the early primaries and continued into 2008. In March, 2008, McCain gained somewhat on his Democratic rivals, but still fell well below the total raised by the two Democrats.

Within the Democratic camp, Clinton dominated most corporate contributions until 2008, when Obama enjoyed big gains, pushing ahead through March especially in the key industries of finance, lawyers/lobbyists, communications and health.

Wall Street has strongly supported the Democratic candidates over the Republicans. Through the end of 2007, seven of the big 8 financial firms (Goldman Sachs, Citigroup, Morgan Stanley, Lehman Brothers, JP Morgan Chase, UBS, and Credit Suisse) showed a decided preference towards the Democrats. Only Merrill Lynch gave more to Republicans, though they gave the single most to Clinton. The Wall Street Journal (2-3/4-08), while noting that Obama receives a notable number of contributions from small donors, pointed out that “…even for Sen. Obama, the finance industry was still the richest source of cash overall…”

Through February, Obama led the other candidates in contributions from the pharmaceutical industry and was in a virtual dead heat with Clinton with respect to the energy sector.

These numbers strongly suggest that candidates, especially Democratic Party candidates, are unlikely to challenge their corporate sponsors in any meaningful way.

Clearly, Corporate America was not afraid that Obama or Clinton would step on their toes or even stand in their way. While the Republican message and program were more overtly and adamantly pro-business, big business was not trying to swing the election their way. While they may have differed on social and even foreign policy questions, wealth and power understood that the Democrats would not challenge them on any matters relevant to their business agenda. Six years after, they appear to have been right.

Another way to illustrate the uncoupling of corporate money from party ideology is through the trend in corporate PACs to shovel money to incumbents of either party: In 1978 corporate PACs gave 40% of their contributions to House incumbents; in 2014, that number had leaped to 74%.

Corporations are not trying to deliver a message; they are outright buying all of the candidates.

With respect to this year's November 4 interim election, corporate PACs have shifted their support-- sometimes dramatically-- from Democrats in key races to Republicans over the last 18 months (WSJ, 10-29-14). Obviously, neither the corporations nor the candidates have changed their agendas greatly. So it's not about issues, but electability.

It should be transparent that two-party politics in the age of extreme concentrations of wealth and media influence is far from a rousing example of democratic process. Consequently, we should surely not expect the results of the tainted process to be democratic. Like the commercialization of commodities, the commercialization of politics results eventually in the domination of the market by a few products (parties, candidates) and the minimizing of their differences. We no more pick our leaders than we pick the products offered in the showroom.

Corporate America picks them both.


Joomla SEF URLs by Artio

Google Translator


WFTU Poster Contest Winner

WFTU Poster 1st Prize