Home > Uncategorized > Bernie Sanders, Hillary Clinton, and the Money

Bernie Sanders, Hillary Clinton, and the Money

from Dean Baker

Bernie Sanders has made the corrupting role of money in politics a centerpiece of his campaign. He has argued that because campaign contributions by the rich pay for political campaigns, they are able to control the political process. This gives us a political system that is very effective at serving Wall Street and the insurance and pharmaceutical industries. It is much less effective at serving the needs of ordinary people.

This has created an interesting dynamic in the race for the Democratic nomination. Secretary Clinton has flipped Sanders’ claim around and challenged him to show where she has reversed a position to serve the moneyed interests. This might be a useful campaign tactic, but it misrepresents the way in which money affects campaigns.

Undoubtedly there are cases where an individual or industry group promises a large campaign contribution in exchange for a politician’s support on a particular issue, but this is almost certainly rare. More typically the support of politicians for moneyed interests is part of a much longer process. It’s not just that the politician wants to act to curry the favor of the rich and powerful, more typically they identify with the interests of the rich and powerful so that they don’t even see themselves as compromising a principle.

Trade policy provides an excellent example. Over the last quarter century, the leadership of both political parties has consistently pushed trade deals that have worked against the interest of a large percentage of U.S. workers. This was not an accidental outcome from these deals, it was by design.

Trade deals like NAFTA or most favored nation trade status for China were designed to put manufacturing workers in the United States in direct competition with low-paid workers in the developing world. According to standard trade theory, the predicted outcome of this competition is a loss of jobs in manufacturing and downward pressure, not only on the wages of manufacturing workers, but on the wages of less-educated workers more generally.

The wages of other workers would fall since displaced manufacturing workers would be forced to look for jobs in retail and other sectors. The increased supply of workers lowers wages in these other sectors as well. Recent research by some of the country’s top labor economists confirms that trade has been a major factor depressing the wages of large numbers of workers.

While there were big money beneficiaries of these trade deals, most of the politicians who supported them probably did not need to be bought with campaign contributions. Instead, they likely supported these deals because they thought they were the right thing to do. After all, they mostly associate with people who benefit from these trade deals, either through higher corporate profits or from being able to buy cheaper cars and clothes. Politicians are less likely to associate with the auto workers or textile workers who were losing jobs or retail clerks getting lower pay.

In most cases, it probably never even occurred to the politicians voting for the pacts that there was a serious downside. Politicians are people who get elected by making friends and raising money, not by being policy wonks or political philosophers. Being an expert on the issues that Congress or the president addresses is not part of the job description.

Furthermore, even if they looked beyond their friends they could find media outlets like the Washington Post touting the virtues of “free trade.” Never mind that these deals did nothing to reduce the barriers that protected highly paid professionals like doctors or lawyers or that they actually increased patent protection on drugs and other products. Since these forms of protectionism benefitted the wealthy, the deals could still be called “free trade” pacts.

You can tell the same story on a wide range of issues. The Wall Street bailouts were necessary to prevent a Second Great Depression. The politicians may have no clue why, but this is what their friends told them. The Fed has to raise interest rates, even though that means fewer people will have jobs, because there is some risk of inflation. The list can be extended at considerable length.

The people who might challenge these views — who can point to evidence showing that these views are wrong — rarely get a chance to push their arguments into political debate, because they are not backed by the millionaires and billionaires. These are people who are ignored or mocked by media outlets like the Washington Post.

This is how the wealthy control the political process. The system makes it extremely difficult for those who challenge the policies that serve their interests to ever be heard. That is why it is inspiring to a see candidate like Senator Sanders get enough money and support to be a serious contender for the Democratic nomination, even without big money contributions.

When we actually see money being handed over to politicians from the wealthy, whether in the form of large speaking fees or a high-paying job, it is probably best to think of it as analogous to a Valentine’s present. No one loves their spouse or significant other because of a generous Valentine’s gift; rather it is a symbol of ongoing affection.

If this sounds strange, let’s imagine a slightly different scenario. Suppose Bernie Sanders had spent four years in President Obama’s cabinet during which time he did everything he could to try to break up the big banks and have corporate criminals put behind bars. Does anyone believe Goldman Sachs would pay him $250,000 to recount his experiences?

View article at original source.

  1. louisperetzperetz
    February 20, 2016 at 2:11 pm

    Unhappily we have about the same campain system in France. Rich partis have always the best results.

  2. JP
    February 20, 2016 at 4:13 pm

    Well, the ancient Greeks already thought of elections as the instrument of choice for the rich to ‘control’ democracy. The rich can buy votes, the poor cannot. The observation is not new, only around 2500 years or so.

  3. February 20, 2016 at 4:54 pm

    Yes the system is as you say. And it really is not that subtle, its mostly that we are so conditioned to think that it is the correct and benevolent one we’re supposed to believe in. If we literally stood on our heads, we’d see BOTH the world AND ourselves…as they actually are.
    And of course this is precisely what we need to do with economic and monetary theory as well.

    • blocke
      February 20, 2016 at 10:36 pm

      When I read a lot of the literature on elites (Mosca, Pareto, etc.), there was a general consensus that elites run countries, that there was no such thing in reality as a self-governing democracy in countries of size. The chief point about elites, however, was their staying power and that depended on an elite’s skill to convince people that it governed in the general interest. That trust has eroded dramatically in the past quarter century, for real reasons, because to convince people that the elite is looking after the general interest, there must be some semblance of it doing so in reality.

  4. February 21, 2016 at 4:40 am

    Even allowing that economics is not a science, there are still elements of even neoliberal economics that are consistent with the work of scientists. How are these elements kept at bay when policies that are contrary to them are chosen and enacted? Also, how do elites and their “friends” in Congress, SCOTUS, business, politics, etc. circumvent and/or blunt the work of scientists who work on such areas as climate change, worker safety, pollution, sustainability, family structure and health, crime, etc. that might interfere with or even stop the enactment of policies that benefit the elites? I think the answer to these questions shows that the story you tell, although focusing on subtle and “soft” control is still overly simple. The relationship between elites and politicians is not either linear or single level. The relationship changes with time and circumstances and varies depending on which politicians and which members of which elites are involved. For example, relatively speaking there are few members of Congress that have the experiences of someone like LBJ or Carl Albert. These politicians learned their politics in post-WW2 America and grew up poor. A “conservative” like LBJ would be a raving “liberal” today. And Carl Albert would be stoned today in his home State of OK for the policies he supported in the 1970s. So part of the change is the change in the overall political location of the country. And that’s a result both of efforts by the elites to move the nation to the right and efforts of progressives to solve social problems. The first mostly failed until Reagan waked into the Presidency and solving social problems always creates anger, both from those who are “helped” and those who suffer the collateral damage from the helping. As examples of the latter I give you House Speaker Paul Ryan and Wisconsin Governor Scott Walker. No one hates public assistance programs more than people who benefited from them but now in positions of power want to desperately “make believe” they made it to the top on their own. On the former I doubt Reagan (who was by today’s standards a moderate Democrat) ever believed the electorate would allow the influence of elites to go as far as it has today. Finally, there is that electorate. Apart from the “baby boomers” and “millennials” the US electorate compared to those in other “industrial” nations is the most poorly educated, politically naive and uninvolved in the world. As the old saying goes, if you don’t watch the chicken house the Fox will get the chickens. The US electorate is engrossed in Super Bowls and Survivor. From that perspective alone Bernie Sanders is a welcome “fire breathing” kick in the behind and/or inspiration for parts of the US electorate. Dean, you are thinking along the right lines, but just not deeply or broadly enough. And not with enough attention to history.

  5. February 21, 2016 at 11:18 pm

    This is infuriating. How is a politician supposed to know that trade deals are bad when the entire economics academy, include the vocal liberals, say they are good? Larry Summers and Brad DeLong were in the White House when NAFTA was singed, right?

    And how many politicians do you know personally? Have you done field work on who they spend time with?

    You exemplify the problem, by using the time honored economic method of pulling stuff out of your arse. Just because it is liberal doesn’t make true.

  6. Izaskun
    February 22, 2016 at 9:32 am

    One drawback of contemporary democracies is that political elites make the electorate believe that they act on their behalf when they actually cater special interest groups. The thing is that the political elites, let alone the incumbent politicians, have all the mechanism needed -from media to education- to design the illusory trust that the policies they implement will make the society thrive.

  7. February 23, 2016 at 12:33 am

    “This is how the wealthy control the political process.”
    Soddy said it in the 1920,s, “It is concerned less with the details of particular schemes
    of monetary reform that have been advocated than with the general principles to which, in the
    author’s opinion, every monetary system must at long last conform, if it is to fulfil its proper role
    as the distributive mechanism of society. To allow it to become a source of revenue to private issuers is to create, first, a secret and illicit arm of the government and, last, a rival power strong enough ultimately to overthrow all other forms of government.”

    “They are a secret and illicit arm of the government…”

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