Bernie Sanders says taking special interest money is a problem; Hillary Clinton says talking about it is a smear. At this point, what difference does it make what Goldman Sachs paid Hillary?
WASHINGTON, February 6, 2016 — In Thursday’s Democratic debate in New Hampshire, Hillary Clinton said she had been “smeared” by Bernie Sanders. “There is this attack that he is putting out, which really comes down to, anybody who took donations or speaking fees from any interest group has to be bought.”
Sanders responded, “There is a reason why these people are putting huge amounts of money into our political system. It is undermining American democracy and it is allowing Congress to represent wealthy campaign contributors …”
There is growing opposition to the role of money in politics from the left—the Occupy Wall Street movement, for example—and from the right—the Tea Party movement. Clinton received $675,000 in speaking fees from Goldman Sachs, a Wall Street firm that has agreed to pay $5 billion to settle claims for its role in the 2008 financial crash.
Did they pay $675,000 for three speeches without expecting anything in return? This seems unlikely.
In her 2003 book, “The Two-Income Trap,” Sen. Elizabeth Warren, D-Mass, accuses Clinton of shifting her position on bankruptcy legislation to appease her Wall Street donors when she became a senator from New York. In Warren’s view, “She could not afford such a principled position. Campaigns cost money and that money wasn’t coming from families in financial trouble.”
Ties to Wall Street cut across party lines. Sen. Ted Cruz’s wife was an executive at Goldman Sachs and Cruz had large unsecured—and unreported—loan guarantees from that firm. Special interests contribute to both parties so that whoever is elected will feel obligated to do their bidding.
After he criticized “New York values,” Cruz received this rebuke from New Jersey’s governor, Chris Christie:
“Ted Cruz has no problem with New York values when he’s collecting (money) from New York hedge funds. … I’m sure when they are writing him seven and eight figure checks … If he really has a problem with New York values then he should return that money.”
What big money buys is big government. According to the Congressional Budget Office (CBO), our long term fiscal predicament is getting steadily worse. This year, the federal budget deficit as a share of the economy will resume growing for the first time since 2009, and that will continue through 2026. At the end of 2026, according to the CBO, the publicly held federal debt will be 86 per cent of total output, more than double its pre-recession level.
There are some conservatives who welcome unlimited political spending as a form of free speech. How they came to this view is difficult to understand. In its 1986 opinion on Massachusetts Citizens for Life, the Supreme Court ruled that nonprofit advocacy groups can spend money in elections and it clearly distinguished them from business corporations.
In its 2010 Citizens United decision, the Court opened the floodgates to political spending by corporations, which has led to the super-PAC culture of today.
Traditional conservatives would find it hard to understand the reasoning of those who embrace this view. In his 1960 book “Conscience of a Conservative,” Barry Goldwater declared that political fundraising should come from “individuals and individuals alone.” He said, “I see no reason for labor unions—or corporations—to participate in politics.”
In Goldwater’s view, “The role of money is way out of line. It’s strangling us. The influence of money distorts everything. Government of and by the people is waning.”
He advocated limits on overall spending in election campaigns, both by the candidates themselves and by independent spenders, and suggested trying to persuade the Supreme Court to reverse its 1976 decision holding that limiting campaign spending also limits the First Amendment.
“Our nation is facing a crisis of liberty if we do not control campaign expenditures. Unlimited campaign spending eats at the heart of the democratic process.”
In 1983, Goldwater supported campaign finance reform:
“Our nation is facing a crisis of liberty if we do not control campaign expenditures. We must prove that elective office is not for sale. We must convince the public that elected officials are what James Madison intended us to be, agents of the sovereign people, not the hired hands of rich givers.”
Former Sen. Warren Rudman, R-N.H., wrote after Citizens United:
“Supreme Court opinion notwithstanding, corporations are not defined as people under the Constitution and free speech can hardly be called free when only the rich are heard.”
Professor Richard W. Painter of the University of Minnesota Law School, author of the book, “Taxation Only With Representation: The Conservative Conscience and Campaign Finance Reform,” argues that,
“All Americans should be alarmed about the effects of money in politics. But it is conservatives who should be leading the fight for campaign-finance reform. Unfortunately, none of the Republican candidates for president have taken on this issue … Big money in politics encourages big government. Campaign contributions drive spending on earmarks and other wasteful programs—bridges to nowhere, contracts for equipment the military does not need, solar energy companies that go bankrupt on the government dime and for-profit educational institutions that don’t educate. When politicians are dependent on campaign money from contributors and lobbyists, they’re incapable of holding spending programs to account.”
Campaign contributions also lead to more regulations. “Companies in heavily regulated industries such as banking, health care and energy are among the largest contributors,” notes Painter.
“Such companies donate with the hope of winning narrowly tailored exceptions to regulations that help them and disadvantage their competitors. Politicians sometimes say they want to roll back regulations wholesale, but they rarely follow through because they know that less regulation will remove the incentive for future contributions. Some would call it extortion, but that is how the regulatory game is often played.”
Painter believes that our campaign-finance system is a “national-security risk” because in a global economy, corporate wealth is no longer mostly American; many American companies are owned by, borrow money from and do business with foreign governments. Equating corporate wealth with free political speech, as Citizens United did, means that global economic power will help choose our government. Groups that are not required to disclose the identities of their donors produce election ads. Who knows where the money for such ads is coming from?
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