Is it any wonder that the financial sector pulls the strings in Washington?
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The fiscal-cliff debacle is the most recent example of a money-laden political system yelping for help. Partisan politics has proliferated while funding for campaigns has reached historic highs. The result: a battered and broken system failing basic tests of government.
Take the financial sector, front-and-center stars of the fiscal-cliff discussion. When politicians were at odds over the plan's details, the giddy-up, go-to was for financial sector CEOs to exert pressure on Congress. That's a lot of clout, and here's why they have it:
One: The financial sector contributed $573 million to those running for federal elective office this last cycle. That's way more than any other sector.
Two: Financial firms also top the list when it comes to lobbying, spending close to $500 million in 2011. This allows them a whopping 10 lobbyists for each member of Congress. Ya think they hold sway?
Three: As the economy, families and businesses suffered from the financial-sector-induced Great Recession and after large financial firms received $400 billion in a taxpayer-funded bailouts, guess which sector has profited most? Shocker: the financial sector. In fact, every quarter since late 2008, it has done better than others by a wide margin. In the third quarter of 2012, finance produced $510 billion in profits, out-pacing the next closest sector, manufacturing, by $142 billion.
That math may add up for the financiers. After all, they have been working since 2010 to chip away at the Dodd-Frank financial reform law as regulators begin to implement the measure. But it sure isn't adding up for Americans who, as Woody Guthrie put it, "ain't got the do re mi."
Money in politics has helped propel polar-opposite partisan positions. In order to get campaign cash, best to take extreme positions and stick to them (creating many crankcase politicians), regardless of the cost to the nation.
In 2002, Sens. John McCain and Russ Feingold made the system better by limiting the influence of money in campaigns. That made some difference, but a later Supreme Court decision (Citizens United v. Federal Election Commission) created a humongous hole in reforms when it was determined that free speech meant people could spend whatever they liked to voice their political views. You want to spend a gazillion? Go right ahead.
To understand the result, we need to look no further than the fiscal-cliff mess. It symbolizes the quandary in which we find ourselves on many issues -- and will until we limit money in politics. The kicker: That will take an act of Congress.
First Published January 4, 2013 12:00 am