To what extent has democracy in the US been subverted by money?

[The Minsky Moment]

Otto - PACs tend to be a vehicle for wealthy individuals, not corps.  You wouldn't expect to find lots of corporate donors in the PAC contribution records.

[Admiral Yi]

Yi's argument is almost amazing in it's stubborn obstinance.

He is basically arguing that the rich spend hundreds of millions of dollars, but get nothing in return. He would have us believe that they are basically morons, who throw their money into contributions to politicians, and expect and get no return on that investment.

Oh? And the fact that those same rich corporations are getting richer and richer all the time while the political system does nothing to address the issue? And the USSC comes out and states definitively that this is all working just as intended?

Coincidence.

Berkut's argument is perfectly circular.  We know that political donations are corrupting the system because they are buying special favors with it.  How do know they are getting special favors?  Because they must be if they are spending so much money.

A very strong case can be made for the argument that the rich old coots who pour money into campaigns are indeed morons.  The rich old Jew who bankrolled Gingrich had no chance of getting any return on this money.  Same with the rich old goy who bankrolled Santorum.

[OttoVonBismarck]

Otto - PACs tend to be a vehicle for wealthy individuals, not corps.  You wouldn't expect to find lots of corporate donors in the PAC contribution records.

No you wouldn't, which was my point sweetheart. Berkut is talking about campaign finance reform, in terms of influencing campaigns directly the two biggest money funneling vehicles are the actual campaigns themselves (both candidate and DNC/RNC), and Super PACs ("regular" PACs tend to be more narrowly focused industry lobbying efforts, often specific to individual corporations.) If Berk is talking campaign finance reform, his primary concern is who is influencing elections. Since corporate donations aren't actually that prominent in elections, I argue corporations don't impact those much, and campaign finance laws would thus have little impact on current corporate lobbying spend.

Corporate spending on traditional lobbying (which is influencing elected officials, not trying to influence elections) would / is much harder to control, and is hard to control as it's been something we've been trying to get a grasp on for decades.

I do find it interesting when people excoriate companies that spend "more on lobbying than they pay in taxes", because all of these companies pay negative net taxes because they take advantage of tax credits. Tax credits exist solely because government has decided to incentivize certain behaviors. It's weird to me people then get mad when corporations engage in the very behaviors government policy is designed to encourage.

[OttoVonBismarck]

Berkut's argument is perfectly circular.  We know that political donations are corrupting the system because they are buying special favors with it.  How do know they are getting special favors?  Because they must be if they are spending so much money.

A very strong case can be made for the argument that the rich old coots who pour money into campaigns are indeed morons.  The rich old Jew who bankrolled Gingrich had no chance of getting any return on this money.  Same with the rich old goy who bankrolled Santorum.

Corporations spend tons of money they shouldn't. I should also note some Fortune 500 companies barely pay anything for lobbying as they've decided they get nothing out of it. The ones who seem to engage in the most lobbying are the ones who benefit the most from government tax credits--largely energy and manufacturing firms; but that's all tied into the "bring back our 1970s manufacturing jobs where I can make high middle class salary, with uber benefits and a full pension!!!!" mania. You can't lay money on the table for companies on the theory of "making more jobs, yea!!' and then get mad when they take the money.

One corporation a year or so ago made the news because it decided to pull all facebook advertising. Their reason? They found no compelling evidence or marketing research to support it as advertisement, yes, their ads got tons of views, but from what they determined no one was actually buying their shit because of the Facebook ads. Some people speculated it could be the beginning of the (financial) end for Facebook as more and more companies would start giving their ad spending on the social network a hard eye to see if it really added any value, but nope, Facebook's generally done very well since then and that was just one blip. I suspect the reason is probably more that some companies spend money stupidly on advertising because they view it all as a crapshoot so they might as well do the full spectrum of ad buying versus any actual evidence Facebook ads are effective for your business.

[The Minsky Moment]

Yi

Why does the code give special treatment to oil and gas royalties?  Because the oil and gas companies wanted it and fight to keep it.

Why after a crisis in which one of the few points of near consensus was that Fannie and Freddie needed to be phased out are they still alive and kicking with no sunset in sight?  Because the hedge funds blocked the reform bill unless they got a big payout and the securitization industry wants to keep them alive.

There are no shortage of examples.  We can play this game all day.  Agribusiness gets their subsidies and supports, yacht and corporate jet builders get their favorable depreciation schedules, pretty much any monied interest with a half-decent lobbying operation can get a good shot of desired language into a bill.

[crazy canuck]

Also, the comparison to Europe really significantly changed after the world wars and communism. Those were very effective mechanisms to reduce old money and promote egalitarianism in europe.

Yes, but fortunately, or unfortunately depending on your point of view, no such calamity is in sight to fix the problem of wealth accumulation which has now occur in the US.

[The Minsky Moment]

Also:

It's important to keep in mind that corporate influence can result in the absence of legislation as well as the presence.  A lot of lobbying revolves around issues where different monied interests have contradictory agendas and so effort is expended simply to block movement.  For example, some powerful companies want strong and broad patent rights, some want weaker and narrower rights.  This dynamic has played out pretty obviously in the various patent reform initiatives on the Hill.  One could argue this works out OK because the monied interests simply cancel each other out but it doesn't really work that way.  What really happens is that a public interest perspective vanishes from legislative analysis except to the extent one powerful interest can adopt it as a cudgel for its own agenda.

[Admiral Yi]

Yi

Why does the code give special treatment to oil and gas royalties?  Because the oil and gas companies wanted it and fight to keep it.

Why after a crisis in which one of the few points of near consensus was that Fannie and Freddie needed to be phased out are they still alive and kicking with no sunset in sight?  Because the hedge funds blocked the reform bill unless they got a big payout and the securitization industry wants to keep them alive.

There are no shortage of examples.  We can play this game all day.  Agribusiness gets their subsidies and supports, yacht and corporate jet builders get their favorable depreciation schedules, pretty much any monied interest with a half-decent lobbying operation can get a good shot of desired language into a bill.

The rationale I heard at the time was that accelerated depreciation was a means to incentivize additional exploration in a bid to lessen dependency on imported oil.  The rationale I heard for the continuation of Freddie and Fannie was that Obama wanted to pump up demand for housing.

As Biscuit mentioned, virtually any economic policy you can name has an ostensible legitimate goal.  Then you have pure rent extraction, like the ethanol subsidies, which, though it hasn't been mentioned much recently, appears to be dying.  If the thesis is correct, shouldn't there be more examples of pure rent extraction achieved through campaign bribery?

So given that context, how does one disaggregate the rent-extraction aspect from the public policy aspect?

Furthermore, how does one analyze the money spent trying to dissuade Congress from enacting injurious populist regulations on business?  Should we consider that subversion of the process?

[OttoVonBismarck]

I was mostly just trying to distinguish influencing campaigns from what I view as "traditional" K Street lobbying where you're trying to influence elected officials. They are actually different things and require different approaches/reasoning.

For campaigns, my favored approach is a simple one. Simply ban the airing of televised campaign ads. Right away that reduces the influence of money in elections, as television campaigns represent an inordinate amount of the campaign spending.

In lieu of the campaign ads, I'd say the broadcast networks (which have control of a public resource and thus can be made to do stuff) would be required to give any candidate in the general election representing a party that received 5% or more of the vote in the previous Presidential election, 30 minutes of air time where that candidate could appear on TV to talk in whatever format they please to espouse their ideas to the public.

That, plus the conventions, debates, and any interviews various media outlets choose to have with the candidates are more than enough television exposure. I'm going off memory but I believe both the Obama and Romney campaigns, the single biggest spend was on media buys for TV ads (I think Obamas may have been > 60%.) Romney was odd I believe in that his media buy was a smaller portion of his spend than is typical, and he spent like 35% on consultants of various types which is insane.

Aside: Actually some of the GOP narrative I'm privy to that claims "we" (the party collectively) sand bagged Romney because out primary format kept him fighting other guys for so long and it left him unable to spend as effectively on TV as Obama was before and even right after the convention is undermined in part by the fact the Romney campaign chose to spend money on stuff that no other campaign spends that kind of money on. My personal intuition for what it's worth is enough moderate Americans were "meh" on the economy and Obama that Romney could have beat him with a campaign that was properly ran. The "culture war" explanation that Romney lost because he pissed off women and minorities and poor people I think is a part of it, but not as big as the mismanagement. The percentages by which Romney were lost could have been bridged in many places with proper campaign organization, and even some of his problems he did have with the poor, women, and minorities were actually the result of campaign mismanagement as well. Some of it was the result of the GOP being intrinsically offensive ATM to those constituencies but that's always been something the GOP has been capable of overcoming if it says the right things.

[The Minsky Moment]

The rationale I heard at the time was that accelerated depreciation was a means to incentivize additional exploration in a bid to lessen dependency on imported oil.  The rationale I heard for the continuation of Freddie and Fannie was that Obama wanted to pump up demand for housing.

As Biscuit mentioned, virtually any economic policy you can name has an ostensible legitimate goal. 

The key word is "ostensible".
Of course there is always a rationale given, there is no lobbying operation so unsophisticated as to forget to add a fig leaf covering.  But is possible to look at the interests involved and the merits of the rationale and reach the obvious conclusion.  I.e. is the policy rationale a priori and driving the policy choice or is it an ex post justification for a money grab.

Using the two examples above for illustration:

"The rationale I heard at the time was that accelerated depreciation was a means to incentivize additional exploration in a bid to lessen dependency on imported oil."

1) That is actually the same rationale used to support the ethanol program.

2) The rationale is an argument that the government has to tilt the field for exploration because otherwise there would be market failure in that the free market fails to internalize the value of "energy independence".  But if that is so, we would expect for consistency's sake that the proponents of the rule would also support fixing other obvious market fails relating to oil and gas.  And on the biggest ones that comes in mind is one that has very broad support from economists - Pigouvian taxation of carbon output to correct the externalities of burning fossil fuels.  So for consistency's sake, we should expect the proponents of depletion credits to support carbon taxation.  Is that what we see?  Of course the question is rhetorical . . .

+ "The rationale I heard for the continuation of Freddie and Fannie was that Obama wanted to pump up demand for housing."

I don't know where you get this from.  Reform efforts are dying in Congress and not because of a veto threat.  It is because Ackman, Icahn, and all sorts of other hedge fund types came out very strongly against.  Some on the grounds that they would oppose any bill that wouldn't pay them off for their old equity investment, some because *they* were happy keeping housing prices propped up and the securitization market humming.  This isn't some secret weirdo conspiracy theory; the relevant players have been very public about their views - a couple of Google searches can easily confirm.

[grumbler]

I have pretty much arrived at the conclusion that this is the only possible recourse.

Congress certainly isn't going to fix it.

I don't think a constitutional convention wuld solve anything, and would likely make such matters worse.  Who would get elected to such a convention?  Those who are so full of passion that they'd go to any lengths to get chosen.
The best lack all conviction, while the worst
Are full of passionate intensity

Sad though it is to say, I think that the only near-term solution will come from a man on a white horse, and we already know what the chances are that that cure will be worse than the disease.  In the longer-term a solution could come from a reformed educational system that produces thinking citizens, but I don't think that the teachers' unions will allow that to happen until the system crashes.

It's a conundrum.  I agree with you that, in the interim, calling attention to the problem is better than just being a loyal purple Drazi.

[Berkut]

I have pretty much arrived at the conclusion that this is the only possible recourse.

Congress certainly isn't going to fix it.

I don't think a constitutional convention wuld solve anything, and would likely make such matters worse.  Who would get elected to such a convention?  Those who are so full of passion that they'd go to any lengths to get chosen.
The best lack all conviction, while the worst
Are full of passionate intensity

I don't see that as an issue - setting up the convention can be done in a fashion so as to limit its scope and make the process somewhat rational.

Of course, it could be done poorly, in which case that won't happen, in which case whatever the outcome it, it would still have to be ratified by 41 states, right? So anything too crazy won't go anywhere anyway, in which case we are no worse off than we are now.

And now is pretty bad.

More likely, perhaps the process of trying to create such a convention might mobilize people to push for reform through more traditional means - simply the threat of an Article 5 convention might even get Congress to act.
Sad though it is to say, I think that the only near-term solution will come from a man on a white horse, and we already know what the chances are that that cure will be worse than the disease.  In the longer-term a solution could come from a reformed educational system that produces thinking citizens, but I don't think that the teachers' unions will allow that to happen until the system crashes.

It's a conundrum.  I agree with you that, in the interim, calling attention to the problem is better than just being a loyal purple Drazi.

[/quote]

[Hansmeister]

The amount of corruption in government will always be directly proportionate to the amount of power of government, so trying to address the first without addressing the latter is a fool's errant.

[Razgovory]

That's why African countries are known for their incorruptibility.  They lack the power to be corrupt.

[DGuller]

The amount of corruption in government will always be directly proportionate to the amount of power of government, so trying to address the first without addressing the latter is a fool's errant.

This is the kind of Republican idiocy that led to our mess.  Don't bother creating persuasive arguments to support your desire to further empower the rich and powerful;  make it an axiom.

In real world, outside of groupthink tanks, the Western governments tend to be both the most powerful and the least corrupt.  True, they're not as powerful as the North Korean government, but they have an impressive monopoly on power that few other countries can manage.