Tuesday, February 02, 2010

How Much Does Corporate Speech Cost Consumers?

February 2, 2010, 5:30 a.m.

What's Wrong With Washington?
(brought to you by FromDC2Iowa.blogspot.com*)

Over the years I've studied, observed, worked in the middle of, written about, and tried to reform the corruption that we decry in the Afghanistan government but reward in our own.

But none of my efforts to answer the question, "What's wrong with Washington?" have come close to the answers provided by this video.

Power in Washington, I discovered, lies not in the school child's notion of the "legislative, executive and judicial" branches of government. It's in something I call "sub-governments."

"Sub-governments grow under rocks, away from the media's spotlight. They require an industry dominated by a few firms that grow rich with government help, whether through subsidies, price supports, tax breaks, government contracts, use of public lands, bailouts or tariffs. Their memberships usually include a small, incestuous collection of one industry's corporate and trade association executives, their lawyers, lobbyists and publicists, its trade papers' journalists, congressional sub-committee members and staff, and the relevant agency's employees. They eat and play together, literally inter-marry, and protect each other."
Nicholas Johnson, Are We There Yet? Reflections on Politics in America (2008), pp. 95-96.

And what sustains the sub-governments? "The mother's milk of politics," as California's Jesse Unruh among others has called it: money.

It seems like everybody has a "rate card." Commercial radio and TV stations have them. How much you pay for one commercial is a function of time of day and size of audience. (Thirty seconds on next Sunday's Super Bowl may well cost $3 million.) Universities have rate cards for how much you have to donate to have something named after you or your corporation from a chair (not an endowed chair, a literal chair, as in an auditorium), to a room, building, college or the entire university. Our "educational, non-commercial" radio stations also have rate cards, just like their commercial big brothers and sisters. They just call the sponsors "underwriters" and the price per commercial a "donation."

Similarly, what is called a corrupt "bribe"
in Afghanistan is called a perfectly legal "campaign contribution" in Washington. But as the "What's Wrong With Washington" video displays, there's very little difference.

In Washington, they say, "you have to pay to play." Visitors to a senator or Congress member's office may be informed, in a sometimes not very subtle manner, that a visit with "the Senator" or "the Congressman" personally, as distinguished from a staffer, might come sooner and last longer if a contribution were made -- or better yet, as in the video, if a fundraiser were held.

But how large does the "contribution" have to be in this "you have to pay to play" town called Washington? It all depends on how much you want back, the "rate card."

Some years ago, I was curious to know if there was a mathematical relationship between the size of the contribution and the value of the return, in the form of antitrust exemptions, subsidies, price supports, tax breaks, government contracts, use of public lands, bailouts or tariffs. The formula that emerged, at least to my own satisfaction, was that those who gave "soft money" (that which is not limited by campaign spending caps) at the $100,000 to $1,000,000 levels got returns on their "investments" in the range of 1000-to-one. Give a million and you get back a billion. For the details see, Nicholas Johnson, "Campaigns: You Pay $4 or $4000," Des Moines Register, July 21, 1996, p. 2C.

As the headline suggests, all campaigns are funded by the public -- either as taxpayers ($4 for public financing of campaigns) or as consumers (the extra $4000 you may pay during a year at the gas pump, pharmacy, or for other goods and services priced artificially higher because of government action in response to contributions). Public financing of campaigns is decidedly cheaper.

The Supreme Court's 5-4 decision on January 21, that it's unconstitutional to deny corporations "their First Amendment right" to speak (with shareholders' money) during the 30 days prior to an election, was a travesty for a variety of reasons -- many of which were outlined by Justice Stevens in dissent. Citizens United v. Federal Election Commission, 558 U.S. ____ (2008).
Corporations can and do speak during elections, in ways just described, and displayed in the video -- unlike, ironically and not incidentally, executive branch employees whose speech and activities are severely restricted under the Hatch Act. Corporate directors, officers, and employees can contribute and speak as individuals. Indeed, they can have a company-wide campaign to collect individuals' checks and give them to a candidate, a practice called "bundling." The candidate knows full well that it is, in effect, a single contribution from the corporation, but it gets reported as individual contributions. The corporation can also have a political action committee, or PAC, that collects, and distributes, political money. It can spend millions on "lobbying" members of Congress and the Senate. There is also the possibility of funding independent, other-than-PAC "527 organizations" (so called because of their authorization under 26 U.S.C. § 527) that have little regulation.

To suggest that corporations' speech and influence is somehow unfairly restricted in the American political process is laughable. But under the Court's recent ruling, an entity that is not a person, has no mouth, and cannot speak, is given First Amendment rights it is biologically incapable of exercising. Moreover, given the Court's view that "money is speech," the "speech" of this artificial thing involves no words or other symbols we normally associate with communication. A bizarre decision at best, even if it were necessary to right the scales of justice -- which it is not, given the extensive domination of our political and governing process by corporations already.

As a former Supreme Court law clerk, and a nostalgic "friend of the Court" in that sense, I am additionally and seriously distressed by what this decision has done to the only power the Court has: its dignity, aloofness, independence, fairness, commitment to the stability of precedent, and the resulting respect and awe in which it is held by the American people and the other branches of government. When it claims to be respectful of the rights of the states, and then reaches out to take a case that will enable it to pick the president of the United States; when it reaches out to overturn prior decisions and address issues not necessarily before it in order to further empower corporations' control of government; it risks losing that power. When it becomes just another partisan legislative body we no longer have a "judicial branch" except in name.

But to end on a happier note, with another video, the logical extension of the Court's decision is best expressed with a corporation's recent decision to file for office. That's right, if corporations are persons, if they can actively campaign for others, if they have First Amendment rights, why should they not have Article I rights?

The requirements to be a Member of Congress are few. Article I, Sec. 2, of the Constitution provides: "No person shall be a Representative who shall not have attained the age of twenty five years, and been seven years a citizen of the United States, and who shall not, when elected be an inhabitant of that state in which he shall be chosen."

As I read it, once the Court's crossed the threshold of a constitutional holding that corporations are persons, and have the rights of persons, any corporation that has been, for example, incorporated in the State of Iowa over 25 years ago should be eligible to run for Congress from Iowa.

Cut out the middle man. There's a certain logic and cost saving to this approach. No more fund raising for non-corporate human candidates. Every corporate candidate would rightfully be expected to pay its own way. There would be no confusion as to whose interests are being served by our "representatives." There would no longer be a need for lobbyists.

Think of the increased transparency. Under the present system it's hard for a voter to figure out just how beholden their representatives are to the major donors. I've often urged office holders be required to wear the corporate logos of their major contributors -- the larger the contribution the larger the logo -- like NASCAR drivers and the Supreme Court justices, pictured above, are now doing. But elected officials refuse to do it. Once Members of Congress are the corporations, instead of just beholden to corporations, citizens could better understand why the prices of goods and services, as well as their taxes, keep going up.

Anyhow, it's no longer just a dream -- or nightmare, depending on your point of view. A Maryland corporation is entering the race this year. And now, as Warner Wolf would have said, "Let's go to the videotape."

* Why do I put this blog ID at the top of the entry, when you know full well what blog you're reading? Because there are a number of Internet sites that, for whatever reason, simply take the blog entries of others and reproduce them as their own without crediting the source. I don't mind the flattering attention, but would appreciate acknowledgment as the source, even if I have to embed it myself. -- Nicholas Johnson
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Anonymous said...

In an example closer to home, someone should comment on the corporate take over of the Univ of Iowa.

Headlines today trumpet the corporate moves of higher costs (tuition) and lower quality.

The UIHC is completely awash in a corporate culture, but a rather stupid one. While the physical place deteriorates into a slum (see the filth in the hallways and stairwells, and bathrooms) the big bosses live high on the hog. They proclaim 'World Class' whatever the hell that means, which appears to be one more hollow slogan.

It should be noted all the corporate perks and plans now in effect too at the U of I and the UIHC.

The UIHC promoted some Toyota program of quality control. We see now where that led Toyota. Will the UIHC be recalling liver transplants in the near future too?

The other UIHC corporate thrust is the Disney initiative. The irony is all too delicious for this plan to be called 'Mickey Mouse'. Perhaps those business execs in the UIHC should forgo the perk trip to Orlando and rather clan the carpets and shovel the walks.

Meanwhile central U of Iowa seems paralyzed to move without an army of highly paid consultants. You wonder how they can actually claim to teach at a high level without an outside consultant in tow.

You really wonder what it would be like if a university would be run by one of the (despised) academics.

Unknown said...

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Anonymous said...

It was exciting to find your blog entry. I was searching for political corruption for my English Conversation class, and did not expect to find another Iowan who had any concept of fairness or truth. I have given up hope for Iowa and thus emigrated, but keep track of what is destroying my birth-state and my home in my own blogs. (http://arthuride.wordpress.com/2010/11/07/the-american-worker-is-being-screwed/)