For the first time in recent history, the lobbying, grassroots and advertising budget of the U.S. Chamber of Commerce has surpassed the spending of BOTH the Republican National Committee and Democratic National Committee.
This is significant. It means that the Great Transition has already begun. In the days following the decision in Citizens United, campaign finance experts predicted that the decision would open the floodgates of money for trade associations like the Chamber of Commerce. The influx of corporate money, according to some, would weaken the power of the political parties and candidates and lead the political parties to become less important. Republican lawyer Ben Ginsberg went so far as to say that the parties would be “threatened by extinction.” And Ginsberg supports the CU decision!
(emphasis mine)
If you accept the premise that Roger Ailes is the effective chairman of the GOP, one could argue that the Republican party, in its traditional form, is already extinct. When you strip away Fox News and AM radio and the Chamber of Commerce, is there any Republican party left?
I also believe that the reason, for better or worse, that Obama (Rahm!) cut so many sweetheart deals for corporations in the HCR bill is that the the companies could and would have killed the bill immediately otherwise.
cybrestrike
If this was the case (and honestly I agree that it was) then we are in serious trouble. Roberts, Alito, Kennedy, Scalia, and Thomas perma-screwed the entire country.
This isn’t something the Congress can immediately fix, despite all of their posturing about the Citizen’s United decision. What legislator is going to propose or vote for Campaign Finance Reform with their corporate donors threatening to cut off the spigot?
Davis X. Machina
Does.not.comport.with.master.narrative.
gwangung
Yeah, divide and conquer (or at least try to). You could have TRIED to attack two industries on two different fronts at the same time, but I don’t think that would have proven very successful.
Mike in NC
Damn you Glenn Beck with your ‘gotcha’ questions! She should have picked Aaron Burr or Benedict Arnold.
smiley
Fascism, here we come!
Zifnab
@smiley: Let’s see how many politicians the corporations can successfully get elected before we throw in the towel.
Call me crazy, but institutions that brought us the Pontiac Aztec and New Coke don’t exactly have a monopoly on success. Plowing several billion dollars into a pack of corporate whores won’t guarantee victory, even if it does radically alter the battlefield.
The Republican Party did a damn fine job of getting folks elected for the last 150 years. That the corporate allies have decided to go rogue and short circuit the traditional Washington channels may be a bold new capitalist enterprise, or it may be a Great Leap Forward into political failure, depending on how the CoC and similar lobbying firms play their cards.
superfly
Well, and/or to get more of the corporate money than Republicans, but they didn’t really game it out far enough, because even if it worked in the short term (2010-12), in the long run, the corporate money will always flow back to the Right, might as well pay for the politicians that will do 100% of your bidding and not just 70-80%.
Redshirt
Let’s just outsource the government to IBM or EDS. The magic of the marketplace will surely solve all the world’s problems.
Edward G. Talbot
When you say the companies could and would have killed the bill, presumably you mean that they own enough Democrats to kill the bill.
In which case, yes, that is obviously true. After watching the clusterfuck of the past six months, I can’t imagine anyone could doubt it. The real weasels, IMO, are not the ones like Nelson, Lieberman, Bayh, Baucus and Lincoln who are obvious about it. It’s guys like Bill Nelson of FL and Mark Warner of VA who kept a low profile while I’m certain they would have voted against something creating real competition. These guys will get re-elected with overwhelming support because they kept their opposition mostly out of the public eye
maya
@smiley:
And for those with iPhones,here’sa terrific way to celebrate.
Mr Furious
I’ve been on a deadline and am completely out of the loop on everything over the last week…
So I just want to say: “Awesome Post Title, DougJ”
kay
@Edward G. Talbot:
Agree completely. The hayseed Senators were stupid enough to provide cover for their less forthcoming colleagues, and ended up pissing off everyone.
The smartest way to oppose the public option was to not announce.
Mike in NC
Nah, I used to work for EDS. The geniuses in charge there would screw up a free lunch.
DougJ
@Mr Furious:
Thanks. I like to really indulge myself with the old song lyrics on Mondays.
jl
I think that the Citzens United decision is a good example of why worrying too much about disparities in GOP and Dem interest group spending is not smart. There will always be very powerful forces in this country that will do whatever they can, stoop as low as possible to provide more power to wealthy interests.
Bill Clinton said something to the effect that âthey always have more moneyâ, which I think is the better way to think about interest group spending.
The most charitable interpretation of the reported sweetheart deals is that they were attempts to divide and conquer so that the insurance industry was isolated. But I think with big corporations that is a high risk approach, since any one of the corps that have been bought off will bug out on the deal the second they see just a few bucks in doing so. And Obamaâs hands off approach to Congress allowed the same corps he was making backroom sweetheart deals with (supposing they actually existed), to go make separate ultra sweetheart deals with the putrid and corrupt âcentrist Democratsâ like Ben Nelson, which caused severe problems with getting the legislation passed.
Some disagree with me on this, but I do believe that Obama did promise some kind of progressive change that would allow more openness and citizen participation in policy making. Obama would have done better I think if he had followed up better on that promise. As seen in the recent GOP election wins, getting elected is the main thing the corporate-sponsored Congressional weasels worry about, and votes are the direct mechanism that ensures that end. The money is just a tool to get those votes. There are other tools, Obama promised to use them, but after the election, I saw little effort to further develop and use those tools.
BTW, I also think that Obama betrayed another promise, which was to base his policies on sound evidence-based scientific research. As an economist, I see very little evidence that Obama kept that promise with respect to economic policy. Where his naĂŻve and unworkable post-partisan fairytale was in conflict with science, he chose the former rather than the latter. The fact that in choosing the former he also hurt himself politically with a population that is being subjected to severe economic distress through no fault of their own compounded the problem.
I recognize that economics is a very soft science. But anyone who follows the celebrity economists, and empirical research should see that people like Stiglitz, Krugman, Galbraith, Blinder, etc. have a much better record of successful prediction than the Chicago and Wall Street types that so enthrall Obama. The crowd surrounding Obama (save Romer) have made correct predictions on exactly nothing. But maybe Obama is not really so enthralled by the Chicago and Wall Street crowd, but that was an attempted buy off of corporate interests as well.
So, the Citizens United decision is bad, but I think its potential effects should not be exaggerated. The situation would be very bad even without it, and I do not see how it can make the corporate money influence situation much worse than it is now. We may already be at a saturation point for the influence of mass media adverstising. If corproations can scare the holy Bejeebuss out of the weasels now, what difference will a few more billions make?
DougJ
But anyone who follows the celebrity economists, and empirical research should see that people like Stiglits, Krugman, Galbraith, Blinder, etc. have a much better record of successful prediction than the Chicago and Wall Street types that so enthrall Obama.
I’m not sure it’s fair to say that Chicago types enthrall Obama (Summers is from Harvard).
jl
@DougJ:
By ‘Chicago Type’ I was not referring to specific universities but schools of thought. There are Chicago Types wrt to macroeconomics and financial economics who trained at, or teach at, Harvard and UCLA, etc.
In Edit: or even Princeton (Bernanke) or MIT, or name any top economics department.
schrodinger's cat
@jl:
What characterizes Chicago type economists? Are they influenced by Milton Friedman? What do you mean?
DougJ
What characterizes Chicago type economists?
Kthug has a good piece on this. (He calls Chicago type economists “fresh water” and Harvard/MIT types “salt water” in the article — there are places other than Chicago, such as Minnesota that also have Chicago type economists.)
KDP
Ratigan provided William Stein, the campaign manager from Murray Hill, Inc., with airspace today. Murray Hill, Inc is the first corporation candidate for elected office. They are running as a Republican in the Maryland Senate race, according to the chyro on MSNBC, although their press release just states that they are running for Congress.
http://murrayhillincforcongress.com/
All of that being said, Murray Hill has been doing marketing and outreach campaigns for organizations like NRDC, the Department of Consumer & Regulatory Affairs, and the American Federation of Teachers.
My hope is that, given their past customers, they are looking to make a point about possible unintended consequences of the Citizens United ruling. They intend to harness the power of social networking.
Here is the TweetMeme listing for MHincCongress.
http://tweetmeme.com/user/MHincCongress
Does anyone know anything about Eric Hensal or Patrick Mancino?
I saw the blurb on this at Crooks & Liars over the weekend, but they are now getting MSM coverage.
ThatLeftTurnInABQ
How many campaign spending and corporate influence restraints were in place circa 1900 when the progressive movement of that era was in full swing? Money can’t buy you love.
Wile E. Quixote
@Zifnab:
This would be a great point to hammer home for public campaign financing: Do you really want the people who bought us such great successes as New Coke, the 1973 Ford Pinto, the movie “Glimmer”, the drug Vioxx and the mortgage meltdown to be running our government? Big companies screw up all the time, if we let them run the government our country will be even more screwed up than it is now.”
jl
@schrodingerâs cat: Fair question. In this context I mean people who believe in what has been called the ‘tight competitive equilibrium’ or ‘new classical’ school.
They reject all of Keynesian economics. They believe that the macroeconomic time path of the economy is determined by a competitive equilibrium that is determined by individual endowments of skills, wealth, and other individual characteristics, and technology. There are no co-ordination failures or market imperfections, problems of asymmetric information, herd effect, or anything at all, that keep the economy away from a socially optimal competitive equilibrium. Social nstitutions, attempts at social contracts, and government policy can do little to move the economy away from this competitive equilibrium produced by unregulated free markets. If govenment does have an impact, it will reduce social welfare.
The theory is basically a verson of the underpants gnome business plan.
1. Install unregulated free market everywhere
2. ???
3. Whatever results must be the best of all possible worlds.
Fama and Cochrane are examples of this school.
Summers is an odd case. He is certainly not this kind of ‘Chicago Type’ in terms of analyzing the real economy, but he has defintely become a ‘Wall Street Type’ over the last twenty years. He seems to think in a ‘Chicago School’ way about financial markets, and seems to think that there is some theory that tightly connects financial market behavior to the real economy (food, shelter, etc) that most people ultimately care about.
There is no theory at all for such a connection. Summers makes no sense to me at all anymore, as an economist, and I can only assume that his conversion to a ‘Wall Street Type’ as clouded his judgment and wiped away any memory of his earlier macroeconomic research. Or if there is conflict between what is best for Wall Street, and what he decades ago would consider sound macroeconomic policy, he thinks ‘very deeply’ and concludes that Wall Street interests should prevail.
Miltion Friedman was far less radical than this current groups of ‘Chicago Types’ or ‘Wall Street Types’. In terms of microeconomics, Friendman became a kind of hukster in his old age. But in terms of macroeconomics, the influence of a Milton Friedman would be a relative blessing right now.
As Brad DeLong has pointed out in his blog, the current conservative and Wall Street free market macroeconomic and financial market dogma that dominates policy has little to do with Miltion Friedman’s work.
IMHO, this macroeconomic school has failed utterly. Their very methodology prevents them from making any meaningful empricial predictions in their research work. They either simply pronounce, based on a theory completely disconnected from any operationally measurable reality, that whatever happens is best.
Or if they decide, based on nothing other than their opinion, or because they would appear ridiculous to anyone over 15 if they did not think something went wrong, that something is wrong. Then they comb over the historical record until they can come up with any kind of story that blames the problem on some government action.
Since the beginning of 2008, they have developed in to an almost perfect inverse prediction machine. Whatever they predict, you could have made a nice pile by betting the opposite will happen, or at least they would be wrong. Yet this school of thought dominates policy, IMHO, and the popular mass media pundits and experts.
Quackosaur
@schrodingerâs cat:
Friedman is among the luminaries of the Chicago School of Economics. There are times that I wonder how different the U of C would be had the philosophies of Friedman and his compatriots not permeated the Economics department (and the business school and the law school). I’m sure they would have just gone somewhere else, but they did affect the reputation of the school considerably (and still do, btw).
Then again, the peculiarities of Hyde Park real estate means that the University will eventually house the Milton Friedman Institute in a former seminary building. The chapel will need a few alterations thoughâŠ
schrodinger's cat
@jl: Thanks, that was helpful, besides Fama who are the major Chicago type economists?
What about Doug Diamond and Raghuram Rajan? They are on the faculty at U of Chicago.
CalD
__
Oh, absolutely. There was never any real secret about that. In 1993, an unholy alliance of the Insurance and Pharmaceutical industries, the U.S. Chamber of Commerce and and the AMA managed to so thoroughly vilify the Clinton healthcare plan that a WSJ poll found a majority supported the plan if you didn’t put their name on it, but support for it plummeted when you did.
This time around, the Obama administration adopted what I thought was a very smart divide-and-conquer strategy. The AMA was already effectively sidelined because doctors see first hand every day how broken our healthcare system is. So it didn’t take much to get them actively onboard for reform. Then they managed to keep the Pharmaceutical industry out of the fight by promising to limit their losses to a mere $80 billion or so, at least initially — I honestly think they know on some level that their days of raking in the kinds of profits they’re making now are realistically numbered. They’re just fighting to keep the gravy rolling as long as they can.
Anyway, that basically left the insurance industry and the business lobby to contend with and they’ve proven to be very energetic adversaries, but by themselves they should be beatable. If big Pharma were all in with them though, I doubt we’d have gotten as far as we have. So that was kind of huge, even if it was rightly distasteful to many, myself included.
jl
@schrodingerâs cat: I gave two examples: Fama and Cochrane. They have both done outstanding analysis in financial markets, and have done oustanding analysis in microeconomics. But their macroeconomics is definitely extreme ‘Chicago School’ in my sense of that term.
If you want to get a list of names of macroeconomic and financial economists who roughly fall into the two camps, best thing probably is to read a series of entries in Brad DeLong’s blog over last 6 months. Search for ‘Chicago School’ or ‘Treasury View’ or ‘Friedman’
http://delong.typepad.com/
Menzie Chinn and Econbrowser also has running commentary, but at a more technical level, and he allows responses and commentary from Chicago Types themselves, such as Cochrane, so you can judge the relative merits of the arguments from the different researchers themselves, which is a good thing.
http://www.econbrowser.com/
jl
@schrodingerâs cat:
forgot to address all your questions. I do not know off the top of my head who has said what among well-known economists, so I would have to review my little macro article and blog post collection before I said anything about the two other names you mention.
This is not about particular universities or economics departments.
There are very good non-Chicago Types at the University of Chicago.
It is about various schools of thought that appear in most big economics departments.
I think Krugman engaged in some rhetorical dramatics when he said that entire departments were either Fresh Water or Salt Water. One school or the other dominates most departments, but this should not be made into a war between particular universities or economics departments.
schrodinger's cat
@jl: Thanks jl, I am particularly interested in the two I mentioned, since I came across their theoretical work regarding bank failures which didn’t make much sense to me.
jl
@schrodingerâs cat:
Raghuram Rajan may have been the economist, who I think is at the University of Chicago, who did a presentation that warned about the fragility of the US and international financial structure at a conference before the financial crash.
Whoever did that was roundly criticized by nearly everyone, including Summers.
I am not macroeconomic specialist, and I don’t have all the names of the people in the various camps available at the top of my head.
I would review the Krugman, DeLong and Econbrowser blogs to get the names of the dozens of macroeconomic and financial economists who have been in on the debate.