Tag Archive: lobbyists


I was chatting with Peter Overby at lunch on Wednesday (NPR’s Power, Money, & Influence Correspondent) and it got me back to thinking about what I see as the most fundamental threat to our representative democracy: the financing of campaigns.  I vetted this during another conversation on Thursday with someone who follows politics inside the beltway—basically to ensure I wasn’t pulling these things out of, to put it delicately, my hat (thanks CB!).  This will be the first of a two-part post on campaign finance where I vent a bit.

There have been several attempts to curb campaign spending, though most recently a key provision of the McCain-Feingold act was struck down by the Supreme Court allowing unlimited “soft” money to be spent on elections.  This, it is rightfully argued, will allow a greater flood of special interest money into our democratic process.  Why is this harmful? Because those special interest groups already reap disproportional rewards in our system, and it’s corporations—rather than citizens—that benefit the most.  For example, 12 major American companies have spent more than $1 billion dollars on campaigns over the past decade, and one of the benefits they’ve reaped is to have paid little or no taxes back to the government—despite making billions in profit.  What kind of corporations? Those involved with oil, banks, transportation, telecommunication and technology.  An illustrative case: Exxon made $19 billion in profits, paid no taxes in 2009, but instead received a $156 million refund.  Yeah, and the poor schmuck who makes $20,000 in taxable income per year had to pay $2500 (or more than 10%) to the same government.  What’s wrong with this picture?

Lobbyists are part of the problem as well.  How many senators worked on the first health care overhaul bill?  Twenty-two.  How many lobbyists were in the same room?  Take a look here (note: there’s 4 panels of photos to look through).  I don’t see Joe the Plumber there (and don’t hear him complaining, either).  This is a mostly hidden reality (to those outside the beltway) that the rest of the country seems to despise when light is shed on it.  But we still do nothing about it.  Let’s put it in even starker terms: 13,000 lobbyists were active in DC in 2010, spending some $3.5 billion.  That’s .004% of the population influencing our law makers on behalf of special interests.  Horrified yet?

Let’s look at Obama’s 2008 election expenditures breakdown.  He spent 56% of that money on media (some $427 million), and most of that was spent on broadcasting media.  Actual administrative and campaign expenses amounted to $248 million or less than 1/3 of the total cost of his campaign.

So to recap the situation: special interest groups spend billions of dollars to influence Congress (which they duly reciprocate), candidates spend most of their money on intensive (and often vapid) advertising, perpetual campaigning focuses politicians on fundraising rather than legislating or executive action, and the average citizen gets caught up in the machinery and spit out like the rinse water at a dentist’s office.

So what should we do about it?  Glad you asked. Rather than just complaining, I have some ideas about how we can try and fix things.  They’ll appear in the next post since this one is already long (and you probably need time to recover from the horror that the above revelations have induced).

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“Bread and circuses” is one of the enduring phrases of the first/second century satirist Juvenal who was writing about the Roman Empire.  His 16 satires describe a world rife with oily lawyers, brown-nosing sycophants, unappreciated teachers, and vice-ridden politicians.  Sound familiar?  More to my point, he begrudged the citizenry for giving up their political power for the grain dole (free food) and violent spectacles (the circus games)—the dynamic duo of offerings that the political elite devised in order to win the support of the poor (pretty much everyone outside the small aristocracy).  This form of political populism (appealing to the average Joe) has continued right down through the ages to our very own republic.  Though I suppose we could boil it down further to “vitriol at the other and ridiculous sound bites” (see, that’s why Juvenal will stand the test of time while my rants will be lost in the cloud).

From outlandish hyperbole (I’m aware of the potential redundancy but read the story) to the total disregard of historical perspective, and from hypocritical homophobes to the encouraging of conspiracy theories, our political process has become a joke, and a terrible one at that.  When a senator spouts off on the Senate Floor (and thus into the Congressional Record—you know, that permanent record documenting the process of our government) some ridiculous statement which he then defends with “it was not meant to be a factual statement,” one must wonder when we, the people, will say “enough is enough.”

That is, unless we’re too busy pointing the finger at each other and spewing venom back and forth while we continue to elect representatives that don’t really represent our interests (despite that being pretty much the entirety of their job description).  Or maybe we’re too busy catching up on Dancing With the Stars or The Jersey Shore while eating our McNuggets.  And who provides this vapid entertainment and cheap food?  Firms represented by powerful lobbyists who provide massive funds to those same elected officials.  Now, who do you think those Congressfolk are really going to listen to during our perpetual re-election campaigns?

If we don’t start paying more critical and objective attention to our political system, I dare say we’re on the road to follow in Rome’s footsteps (that story didn’t end too well if you recall).  Not by an invasion, but by a slow decay of civic responsibility and duty that results in a further concentration of power in the hands of a removed elite whose only interests are power and self-preservation.  And they’re well on their way.

To quote Juvenal again: “…for who could endure this monstrous city, however callous at heart, and swallow his wrath?  What’s infamy matter if you keep your fortune?”

The lessons of history indeed.

P.s. I only pick on the above mentioned shows because I think they’re utterly ridiculous. Of course, some of the garbage I watch might be just as bad, but it’s my prerogative as author to keep my vices hidden! 😉

So there’s some important legislation being considered in Washington: interchange fees.  That’s the small cost whenever we use a debit card to pay for something.  Right now, the retailers pay these fees, but the legislation is seeking to change that (putting the cost on the banks and credit card companies and in the process wind up “costing” them some $12 billion dollars a year in lost revenue).

That’s a lot of dough.

Both sides are lobbying their case with Congress right now, to the tune of hundreds of thousands of dollars.  And both sides claim they’re on the side of us, whom they call the “little guy.”

Yet if the banks/credit card companies lose, they claim they might have to forgo giving out debit cards or slash their rewards programs.  If the retailers lose, they might have to pass the costs (which they’ve been eating thus far) along to us, the consumers.  Neither of these options sound like either of the opponents are, in fact, on “our” side.

This is another perfect example of those in power (i.e. those with the money) are battling for control over our material lives and view us merely as collateral damage.  They pay lip service to wanting to protect us, but all they want is more money.

Let’s take a closer look at what’s actually going on.  The section of the Dodd-Frank Wall Street Reform and Consumer Protection Act in question deals with determining if these interchange fees are “reasonable and proportional” to the costs of each transaction.   It provided 9 months for the Board of Governors of the Federal Reserve System to investigate the matter and produce its findings, which it did.  In a short and abbreviated nutshell, it found that the average transaction cost was about 12 cents.  The Board also found that the average charge for these same transactions was 44 cents.  That’s a 366% mark up for profit.  That seems far from “reasonable and proportional” to me.  The Board then offered a couple of alternatives to adjust the current system involving caps on how much the issuers (banks/credit card companies) can charge for these interchange fees.

The real kicker? “Small issuers” are exempt from any caps proposed by the Board.  Who qualifies as being “small?” Issuers with less than $10 billion in assets.  Yeah, with a “B.”

With markups and shenanigans like these, is it any wonder why the top 5 banks alone posted over $60 billion in profit in 2010?  Nor is it clear from these documents how or why the changes would wind up costing us (the consumers) more money, which is what both sides are claiming.  Either we remain in the status quo (and the retailers continue to eat the costs as they’ve done for years) or the banks/credit card companies will simply have their costs covered and make no or little profit from these fees.  Neither of these outcomes justify the lobbyists’ fear campaigns about how we’ll suffer if the “other side” wins.

Isn’t it amazing what one can learn when we read the actual documents instead of letting lobbyists try and bullshit us?

Update 5/11:

My favorite quote from the retailers’ campaign is when the clerk at a Starbucks tells the guy who wants to pay with his debit card to take the coffee because the bank will make more money off the transaction than the barista will.  Yeah, that 44 cents on a $4 cup of coffee really sinks your profit.

On the flip side, the banks/credit card companies claim that Congress gave retailers a $12 billion payday.  It’s not a payday because they’re not charging that fee to the customer!