Do corporate donations equal free speech?

by Rocket Finance

Last, Friday, on Consumerism Commentary, staff writer, Smithee, discussed the recent Supreme Court ruling that struck down most the limitations on campaign donations. Particularly, the limitations put into place by the McCain-Feingold legislation. In the article entitled, Democracy, Incorporated, Smithee did not deal with the details and intricacies of the ruling, but rather the big idea that “corporations are people”. Smithee asserted that the ruling was a bad idea. Since I agree with Smithee when he says:

I had thought things were moving in a positive direction with the proliferation of the Internet. It’s never been easier to encounter dissenting opinions or do your own research. I’ve been having some healthy (and some insipid) debates through Facebook for the last couple of years, the kind that would’ve otherwise happened only with friends or co-workers. I like having those. It’s incredibly important to be available to hear other points of view. Not to mention the continued release of government data available for analysis by anyone. Together, we can help each other get to the truth.

I am going to present an opposing viewpoint and you can decide who is right. Smithee calls himself an independent who leans Democrat, I am an independent who leans libertarian.

Are corporations, people?

Corporations are people who are interested in profit. Corporate money in politics is a form of free speech. Who is interested in corporate profits? Is it just the “fat cats” at the top, as President Obama recently referred to big bankers? Who benefits when a company does well? Here is a list just off the top of my head: Shareholders, retirees, stockbrokers, employees, suppliers to that company, contractors for that company, local, state, federal governments (more taxes are paid), and all the businesses who sell products and services to everyone on the aforementioned list – to say nothing of the advertisers, employees of advertising companies and campaign workers for the candidate who is the target for that money.

You see, when a large company gives money in order to get favor from the government, it isn’t just the guys at the top who benefit. Corporate donations do represent people.

Do corporate dollars always go to Republicans?

Smithee makes the case that this ruling only benefits Republicans, since corporations only give to Republicans. I mostly agree with him about the effect of the ruling, although I would dispute the assumption that the big money only give to the GOP. What he does not mention is that unions such as the trial lawyers, auto workers, service unions and more were not limited in their donations. While these entities are not corporations, they certainly command a great deal of wealth. Unions are big business. What did their money buy? Well, many unions were exempted from the “Cadillac” tax in the recent (failed?) health care bill. The head of the SEIU has visited the White House more than any other private individual in the president’s first year. The auto workers benefited from bailouts of the auto industry – including a more favorable debt settlement during the Chrysler bankruptcy. Trial lawyers have a stranglehold on the Democrat party as evidenced by the fact that there was nothing about tort reform in the recent health care legislation.

So the bottom line is that the McCain-Feingold law restricted donations from corporations (large groups of individuals looking buy favor from the government), but not donations from unions (large groups of individuals looking to buy favor from the government).

Corporate dollars go to Democrats too. Sometimes those dollars pay off in a big way. Watch this video from John Stoessel about a little “green” window company.

So how do we get big money out of politics?

Well, we can’t. Not under the current paradigm. I agree with Smithee that money in politics is a problem. The fact is that as long as government has the power to pick winners and losers (as under the TARP legislation, some companies favored over others), regulate health care (domestic drug companies and health insurers were going to get billions), regulated energy consumption (General Electric was a major supporter of the Obama candidacy both in cash and through its ownership of MSNBC and GE stands to make a huge profit from future “green” legislation.), or bankrupt certain industries, companies, corporations and other groups will see to find ways to influence that legislation.

Do not get me wrong – the other party is by no means innocent. Republicans are as guilty of crony capitalism as the Democrats. Ear marks are standard ways to peddle influence on both sides of the aisle.

In my view, here are the only ways to get money out of politics:

  • No limits on donations. Why not? It is a way to make sure that everything is fair and honest. Do you really believe that companies are always following the rules anyway? If all campaign donations were banned, we would have just as much corruption as we do under current rules.
  • Full disclosure. If big companies or unions or foreign governments are giving big money to politicians, I want to know about it and you should too.
  • Limited government. This is the key. The only way to get corruption out of government is to get the government out of everything other than Constitutionally defined powers. I know this is a point of contention, but if government has the power to pick the kind of widgets that we all can use, then the widget manufacturers are going to do everything they can to influence government widget policy.

These solutions are just a start, there are no easy solutions to campaign finance issues in the United States. All I know is that we, the people, need to be active in knowing what is happening in our government. If you know who owns your politicians, you have the power to counteract corruption.

Photo by Rob Crawley

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