In the midst of the turmoil in the US in the past year or so over first the banking system and then the health care debate, a new and highly provocative theory has developed which questions the state of the US’s capitalist system and democratic politics. “Corporate Communism” a term coined by Dylan Ratigan, an Irish-American former Bloomberg News and CNBC anchor now working for MSNBC, claims that the influence of big business in America is both diluting their democracy and subverting the nature of capitalism in the country. The theory contends that big business in the United States is in effect buying influence in Congress and using that influence to avoid having to truly compete in the capitalist market.
Ratigan’s recent pronouncement on US early morning television that “capitalism is broken” led to a furore in the highly sensationalist US media, but the first part of his theory appears well founded. The most recent and prescient study on the topic of big business and the money which they have contributed to politicians in Congress produces staggering findings. The report, indicatively titled “Five Committees, Three Votes: Advancing Health Care Reform Through the Swamp of $187 Million in Interested Political Money”, was carried out by the Public Campaign Action Fund, a group who supports the public funding of US political campaigns. The report looked at the committees of both the US Senate and House of Representatives who put together legislation on the health care topic. In each of those cases the report found that members on committees that voted against health care reform, which is opposed by the health insurance industry, received on average $353,105 more than those who did not, a 65% swing. It also found that amongst Democrats, those who have come out in opposition to health care reform receive significantly more than those who don’t and that the 82 members who sat on the committees concerned with health care received a whopping $100 million dollars in total during their careers from the health insurance industry.
While many in America have raised the ‘chicken and egg’ question, namely are these members of Congress getting the money because they are more inclined to vote that way anyway, or did they start adjusting their voting patterns after receiving money, it seems clear that this is at least a giant conflict of interest. When the graph shown is considered, however, the democratic nature of American politics seems to come into question entirely. FiveThirtyEight.com, an American political action site run by Nate Silver of 270toWin.com fame, produced a graph illustrating just how little ideology seems to matter when money mixes wi
th politics. Silver focuses on the public option, a plan to create a “Medicare-like” public insurance company to compete with the health insurance giants. By separating the politicians into first Democrats and Republicans, with the latter likely ideologically to vote against, and then into “liberal” and “centrist” Democrats, with the latter again being more likely to vote nay, Silver illustrates, through looking at a politician’s publicly stated position, how money talks.
Ratigan’s question here is quite simple, how can you have a democracy “of the people” when the public representatives are, for all intents and purposes, being bribed openly? It seems that what he is really saying is that just because a country has elections does not mean that it is democratic. But to what extent is he right on the second part of his theory? Have big business interests in America been able to use the government to subvert the capitalist system and fix it in their favour? Well, evidence appears to show that they have been able to do this. Even looking at the two most recent issues that have clearly involved big business, the banking crisis and health care debate, the effect of big business on American politics has been unmistakable. Various articles on OpenSecrets.org, a site investigating corporate power in US politics, since its inception have detailed how large corporations have used influence, and dollars, to slant the playing field in their favour with restrictions on competition and tax loopholes written into legislation that favour the biggest contributors. This is especially true in health care, where state politicians who have enacted legislation to limit the sphere of competition in health care have seen their campaign chests bulge with health insurance industry donations. In banking, the effect tends to be on key appointments and on decisions made by those appointments.
Goldman Sachs has had a famous level of influence on American politics since the Clinton era. Their influence in the Bush and Obama administrations has led to clear advantages as well. George W. Bush’s Treasury Secretary, the US government’s most powerful financial position, was Hank Paulson, former Goldman CEO. Under Paulson, Wall Street’s catastrophe began and while AIG, who owed Goldman billions of dollars, was rescued, two of Goldman’s biggest competitors, Bear Stearns and Lehman Bros., were allowed to collapse. The Troubled Assets Relief Fund (TARP) was established under Paulson to combat the effects of the crisis and it too was headed up by a former Goldman employee. When Paulson was replaced, under Obama, by Tim Geithner, not only did his logs reveal that he called Goldman more than any other financial firm when they were recently released, but he chose a former lobbyist from Goldman Sachs as his Chief of Staff. President Obama then also picked a former Goldman employee to head up the important Commodities Future Trading Commission, while the Securities and Exchange Commission (SEC)’s new “top cop” for Wall Street is another former Goldman employee. All of this while Goldman have expanded their domination of the market and turned a $70 billion taxpayer contribution into a $3 billion quarterly profit today.
While the “Corporate Communism” tag may never fully catch on, the theory behind it seems sound. It more than questions the verity of the United States’ claim to be the home of democracy and capitalism. For a country that highly values marketability, its two supposedly most marketable qualities appear under grave danger. While the nature of capitalism makes it inevitable that corporations will try and devour their competition, the checks and balances applied under a democratic system are supposed to protect against it. These giant corporations may have been created and made prosperous in the past by capitalism, but their oedipal desire to destroy it and ability to subvert it is corrupting and seriously weakening America. Land of the fixed, home of the bribed?
