Money In Politics Corrupts Absolutely
- Posted by TheArmoTrader
- on January 12th, 2012
The following is a little off topic from what I usually cover (Markets, Trading, $MACRO), but I believe it is an important issue.
Money in politics corrupts absolutely. What do I mean by this? I am talking about how money buys politicians which absolutely leads to corruption in the political system. By corruption, I am talking about bad decision and policy making. Decisions that are not beneficial to the majority of Americans. Decisions that lead to Crony Capitalism.
As we know, the politician with the most money usually wins (About 8.5/10 Congressmen who won their race in 2010, had more money). So in order to win, the average congressmen has to raise $1.5 million dollars per election cycle in order to “guarantee” his or her victory.
This leads me to a real life example from today. My House Representative, Adam Schiff, is a supporter of the Stop Online Piracy Act (SOPA). Now I know my Representative pretty well. He’s a good guy overall and we tend to agree on a majority of issues. However, this (SOPA) is not one of them. So why does my congressmen support SOPA? It’s simple really. He represents one of the biggest media cities in America and that is Burbank, California. If you do not know, Burbank is home to several major studios like Time Warner ($TWX), ABC ($DIS), NBC ($CMCSA), and Nickelodeon ($VIA.B). He also represents my city (Glendale) which is home to DreamWorks Studios ($DWA) and Disney’s Imagineering & Consumer Products divisions ($DIS).
Now why is this information relevant? Its because the Media industry (TV/Movies/Music) is the 2nd biggest donor to Representative Schiff. So we know, in order for Representative Schiff to win, he must raise $1.5 million dollars (he raised $1.37 million in 2010). In order for him to get to that number, he must take political donations from anybody he can.
Getting $10, $20 and $100 checks from Joe Schmoe isnt going to cut it. The easy way out of this is getting max donations from those who can give them (0.05% of Americans!). Max donations are hard to come by, and those who can give them are those who would benefit the most from it (Those who would get a high Return on Investment).
So why is this system unfair? Its because in 2010, only 0.26% of Americans actually gave donations to political campaigns. And only 0.05% of Americans actually gave the max. Should we let this small minority control our politicians? Even when you look at spending by Super-PACs, 80% of the money comes from only 58 donors. Again, a real small minority.
As of right now, the Media Industry is 2nd biggest donor for Rep. Adam Schiff for the 2012 elections. Do you think he can really deny that money? It’s not that hes a bad or corrupt guy, but he knows if he does not take that money, his chances of winning next time around decrease. Especially if that money ends up in his opponents pocket. Its a harsh reality, but its the truth.
You might say, ‘let him ignore the money and vote for the correct thing.’ That’s easy to say when you are not running for office every 2 years. And let’s say that he does take that donation but he votes against SOPA. Do you think come 2014, those corporations are going to give him donations again? I would highly doubt it. And in case you are wondering, I do not discriminate when it comes to money in politics. Unions, Special Interest Groups, and any other donors must also kept in check when it comes to the issue of donations.
Another problem with allowing money in politics is the fact that the nationally televised debates are controlled by those whose best interest is getting their politicians in office. That is why we do not see some candidates (like Buddy Roemer and Gary Johnson), who are more than qualified to debate, in the nationally televised debates. This is also why we do not see legitimate 3rd party candidates on stage with the Democrat and Republican candidates.
So what is my solution to this problem. Fellow Stocktwits Blogger Jeff Carter says its Transperency. While I agree that option is better than what we have now, that does not solve the core problem of money in politics.For example, lets say that an online database was established that showed every donated and spent penny. Now in my case, would it make a difference to the people of my district? Would people care that Representative Schiff took money from the Media industry? As a whole, I would highly doubt it. Not only are people apathetic (unfortunately), but they view the ‘buying of politicians’ as the unchangeable reality and a natural thing of politics.
However, I believe that we can change this. To truly get money out of politics, we need to pass a constitutional amendment (Hey, I never said it would be easy) that would:
- Ban corporate person-hood
- Cap donations at $200
- Limit the amount of spending in elections while also shortening the election cycle
- Increase transparency
- And Implement public financing of campaigns
This can be done, after all, America has a rich history of showing the ability to be progressive (progressive in the sense that we move towards what is correct/moral/efficient). We can get money out if we make a push for it.
PostScript: For what its worth, if Buddy Roemer is on the ballot come November 2012, I will be casting my vote for him (I vote on my principals, not for the lesser evil). He is the only candidate out there that is not bought. I might not agree with some of his policies, but I know, that if we truly have an open, unbought debate, then he will be open to listen to those on the opposite side of the debate. What does he have to lose by doing that? Nothing. That’s another great reason why getting money out of politics is important. Because it will allow an unrigged conversation on what we can do to make this country better.
PostScript 2: If you think getting money out of politics would create autonomous cronyism in the government, read my comment here. But to sum it up in one sentence, it wont because of our great democratic system in America.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Jerry Khachoyan is currently an undergraduate student at UCLA pursuing a degree in Political Science. He started trading in September of 2008. He concentrates on using technical analysis and reading the tape to enter the best risk/reward trades. The stock market to him is one of the greatest inventions by man.
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