The Corporate Roadblock in Washington
A protester participates in a demonstration in support of healthcare reform in Washington, DC, on March 9. (Photo: Jewel Samad/ AFP-Getty Images)
When Democratic Senator Evan Bayh announced his retirement last month, he said, "We've got a lot of good people in Congress, but they're trapped in a dysfunctional system."
With the U.S. government locked in a number of stalemates—from healthcare and climate change legislation to regulatory reform on Wall Street—many Americans are frustrated with the inefficiency of the system. Behind each of these issues, however, a corporate sector is having great success pulling the strings—or, perhaps better said, purposefully tangling them.
"There have been all kinds of good ideas that have come and gone in the year and a half of this crisis, and again and again, they've been defeated on Capitol Hill," said Naomi Klein, author of The Shock Doctrine. "Nothing gets through. Ultimately, this comes down to politics, but … for me it comes down to campaign finance reform, and the fact that there's legalized corruption in this country." Klein described the influence of corporate money as "a broken feedback mechanism."
Take healthcare. The insurance industry spent over $41 million on lobbying in 2009. (If there is one industry that has not been affected by the recession, it's lobbying. Federal lobbying set a new record last year at $3.5 billion.) And key Democratic senators—such as Max Baucus, Blanche Lincoln and Ben Nelson—received hundreds of thousands of dollars in campaign contributions from the healthcare industry. In turn, these senators have opposed the public option, even though recent state polling has shown that citizens favor a public option over the Senate bill. Even if Democrats manage to finally push through a bill in the next few days—after making it their primary focus for over a year—the end product could be significantly watered down. Even when the majority party throws the kitchen sink at an issue, corporate obstructionism can still have its way.
The American Clean Energy and Security Act, which aimed to set limits on carbon emissions and reduce the U.S. contribution to global warming, has suffered a similar fate at the hands of special interests. In the first nine months of last year, the U.S. Chamber of Commerce spent $65 million campaigning against limits on carbon pollution. The coal industry launched an $18 million campaign to sell Americans on "clean coal" and contributed over $15 million to federal campaigns. Representatives like Rick Boucher (D-VA) and Joe Barton (R-TX) have received huge sums from the coal industry, oil and gas, and electric utilities. As a result, just to get the bill through the House, major concessions were handed out. In the amended bill, coal received far more aid than wind, solar and other forms of renewable energy combined. That was last June. Now the bill is gathering dust in the Senate.
The problem gets deeper when one realizes that corporate executives and public officials are often one and the same. A well-known example of this is Dick Cheney and his ties to Halliburton, which led to no-bid contracts for Halliburton and its subsidiary Brown & Root while Cheney was vice president. Billions of dollars flowed from public coffers to private hands, and massive chunks of the budget were spent on weapons we didn't need and didn't use, such as the F/A 22 Raptor, which alone cost $4 billion. Eugene Jarecki, author of The American Way of War, called this phenomenon "a profiteering matrix surrounding national security."
Wall Street and Washington have a similar history of sharing major players. The links in the Treasury Department to Goldman Sachs and Citigroup alone can serve as a microcosm of the greater trend. For starters, former Treasury Secretary Henry Paulson was a former head of Goldman Sachs. His successor, Timothy Geithner, was hired by Michael Froman, a Citigroup executive. Rubin's mentor is Bob Rubin, who went from running Goldman Sachs to serving as Bill Clinton's Treasury secretary to working for Citigroup. It's a revolving door. Multiple members of Obama's economic team have made millions on Wall Street. So when the Fed decided to basically print money for big banks, little dissent was heard from either side of the aisle.
"What Washington does in general is to put the public interest second, because the private interest is what makes the wheels go round," said Jarecki. "And when you wake up one day and discover that you have gutted your system and put the public interest in the hands of private actors and then went further and deregulated those private actors, you discover the larger costs of this unholy alliance that is guiding the country."
One repercussion of this "unholy alliance" is a greater disparity between rich and poor. A recent study by the research firm Spectrem Group found that the number of millionaires in the United States grew by 16 percent last year. This coincided with rising unemployment and stagnant wages for most workers. The study estimated that, if this divide continues to widen at its current pace, economic inequality in the United States "will resemble that of Mexico by the year 2043."
For anything to change, more pressure is required from the American people. Raj Patel, author of The Value of Nothing, said that when Barack Obama was elected president, many were guilty of seeing him as "the pizza delivery guy of change, where we would sit in front of our televisions and he would bring hot, fresh, steaming change." Unfortunately, the corporate stranglehold is so strong that campaign finance reform—let alone action on healthcare or the host of other pressing issues—won't happen without significant, organized public pressure. "Everybody thinks it begins and ends with how they vote," said Jarecki. "Their vote is worthless, if that’s how they think. They must vote as a component of a commitment to exert unrelenting and constant pressure on their public officials to deliver on whatever need for change they feel is most important."
As FDR said to activists in his party, "I agree with you … now make me do it."
Joshua Pringle is a journalist and novelist living in New York City. His journalistic work has been published in several news publications, and he is the web editor for Worldpress.org.
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