Money, money, money ... money!
Matt Yglesias has a good post on the danger of corporate expenditures:
A group doesn’t actually need to spend vast sums of money to have a decisive influence on politics. It just needs to be able to credibly threaten to spend said sums. Bank of America, for example, dedicates $2.3 billion to marketing in 2008 so it’s clear that they’ve got the budget to mount a $100 million series of scathing attacks on a Senator who pisses them off and basically laugh that off (and note that in 2004 total spending on Senate campaigns was just $400 million). And if you can have it be the case that just one Senator goes down to defeat for having pissed off BofA then everyone else will learn the lesson and avoid pissing them off in the future. You don’t need to actually sustain that volume of campaign spending.
I’ve seen a lot of jokes about the idea of corporate-sponsored candidates and such. But the real issue here isn’t so much affirmative activity on the part of businesses as it is negative activity on the part of politicians. We’ll be looking at one further step toward a political system in which large business interests have a de facto veto over all policy questions.
At the base of this is a simple fact: The amount of money in political campaigns is peanuts compared with (1) the amount of money disbursed by the federal government and (2) the amount of money controlled by large industries. To get an idea of the sums here, the typical winner of a House campaign in 2008 spent $1,372,000. The typical winner of a Senate campaign spent $8,531,000. That year, the federal government spent $2,900,000,000,000. The difference is just absurd.
That means large industries have both an enormous incentive to "invest" in politics to get a share of that money and the power to make those investments pay off with staggering regularity. A lot of people have a tendency to think of this in terms of big issues like health-care reform. But taxpayers are more commonly fleeced on small issues where the public doesn't care enough to offer countervailing incentives. One study examined a 2004 lobbying campaign for a particular tax break. It concluded that the policy "earned companies $220 for every dollar they spent on the issue -- a 22,000 percent rate of return on their investment." Expect a lot more of that kind of thing, too.
Photo credit: AP Photo/Wilfredo Lee.
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