March 30, 2014 4:59 pm
America’s democracy is fit for the 1 per cent
By Edward Luce
Both US parties are up for rent. Patriots of all stripes should be troubled
Is inequality bad for US democracy? Not according to the US Supreme Court. In the next few weeks America’s apex court is likely to remove what remains of post-Watergate limits on campaign finance.
In 2010 it did away with the biggest restriction by giving corporations the same rights to free speech as people. Now it looks set to scrap ceilings on what individuals can give to candidates and parties. In a less unequal society, the downside would be limited. But in an economy where the top 1 per cent of the population owns more than a third of national wealth, it corrodes the republic from which such riches sprung. People fret about America’s 1 per cent economy. They should worry more about its 1 per cent democracy.
Both ends of the spectrum should be concerned about the rising US oligarchy. Last week several Republican presidential hopefuls trekked to Las Vegas to pay their respects to Sheldon Adelson, the gaming billionaire, who owns casinos in Nevada, Macau and Singapore. Mr Adelson wants to ban online gambling because he sees it as a threat to his vast offline empire. He is prepared to throw tens of millions of dollars at whoever will take up his cause. In practice, mainstream candidates, such as Jeb Bush, the former governor of Florida, and Scott Walker, the governor of Wisconsin, are likely to smell a rat. That means the money will probably go to a Christian conservative such as Rick Santorum, who is fanatical enough to tarnish his party’s electability. If one man and his millions can alter a party’s nomination, he can wreck the party. Genuine conservatives ought to worry.
They should be concerned too about Tom Steyer, the liberal hedge fund billionaire who plans to spend $100m on the upcoming midterm elections on candidates who promise to tackle global warming. The rights and wrongs of Mr Steyer’s stance are beside the point. His aim is to bend the national debate to his will and ensure that President Barack Obama – whom he has hosted for election fundraising events – denies permission for the Keystone XL pipeline from Canada. Republicans with longer memories might cast their minds back to 1996 when Bill Clinton skirted close to breaking the law by giving generous donors overnight stays in the Lincoln bedroom at the White House.
When money can so easily penetrate the official home of the US commander-in-chief, democracy suffers. The uncomfortable truth is that both US parties are up for rent. Patriots of all stripes should be troubled.
America was forged in opposition to the aristocratic corruption of Europe. Today, inherited wealth is more entrenched in the US than it is in almost every corner of the old world. So too are legacy places at Ivy League universities that were once such wellsprings of US meritocracy.
Today, inherited wealth is more entrenched in the US than it is in almost every corner of the old world
In politics too, dynasty has rarely been more entrenched. It would be little surprise were the 2016 election to turn into a contest between Hillary Clinton and Mr Bush. Seven of the past nine presidential elections have featured a member of the Bush or Clinton families. Next time could make it eight out of 10.
Both families benefit hugely from the networks of donors they have cultivated over the decades. It goes without saying that their donors have done pretty well too. The story continues. George P Bush, Jeb’s son, is running for land commissioner in Texas. Many believe Mrs Clinton’s daughter, Chelsea, is preparing the ground for her own future in US politics.
Of course, dynasty is not only about money. In a celebrity-driven age it also brings valuable name recognition. Moreover, money is not enough on its own to change election outcomes. The infamous Koch brothers, Charles and David, who own the second-largest private corporation in the US, spent tens of millions on the 2012 presidential without avail – as did Mr Adelson. And US democracy is still capable of extraordinary upsets, notably Mr Obama’s emergence from nowhere to dislodge Mrs Clinton in 2008.
Yet he may be the exception that proves the rule. Mr Obama campaigned on a promise to drive the money-changers from the temple. His efforts have come to naught. Aside from a nominal ban on permitting lobbyists to work in his administration, Mr Obama has been unable to stem the flood of spending since the 2010 Supreme Court ruling. It is on his watch that US inequality has regained the levels last seen in the Great Gatsby era of the 1920s.
The debate continues to rage among economists over whether such extremes of inequality harm US growth prospects. Some say the fact that the bulk of income goes to the top 1 per cent reduces growth because it undermines the middle-class consumer engine. Others say that such outsized gains offer an incentive to risk-takers to work on the next generation of technological breakthroughs.
There are strong merits to both arguments. But the debate is far too important to be left to economists. In a society where the median net wealth is $113,000 per family, can it be healthy that the median for members of Congress is more than $1m apiece? Should one person one vote be replaced by one dollar one vote? Most economists agree that the effects of technology and globalisation will result in even more inequality in the years ahead, perhaps spectacularly so. The only real countervailing force is politics.
It would be a tragedy for US democracy were its political system to act as a spur, rather than a check, on the extremes of our age.
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By Christopher Caldwell
April 4, 2014 6:58 pm
A decision right in principle but wrong in practice
By Christopher Caldwell
Lifting the cap on funding will tighten the hold of political donors on US politicians
The US Supreme Court is reshaping election law based on principles that are distant from most Americans’ idea of common sense: companies have rights to free speech. Money and speech are the same thing. A political “contribution” is different from a political “expenditure”.
This week the court voted 5-4 to remove caps that had kept big individual donors from backing more than nine national candidates at a time. Anyone who was appalled by the court’s 2010 Citizens United ruling – which let corporations and foundations bankroll big political action committees, or super-Pacs – will like this one no better. The decision will mean, as The New York Times puts it, “giving those few people with the most money the loudest voice in politics”. The alternative, alas, is giving politicians the loudest voice in deciding who gets to be a politician.
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CHRISTOPHER CALDWELL
The Federal Election Campaign Act of 1971 and the court’s 1976 Buckley case established that Americans could spend freely to express their own political opinions but could contribute only a limited amount to individual candidates per election cycle (now $5,200). There was also, until this new decision, an aggregate cap of $48,600. This cramped the style of the Alabama Republican activist Shaun McCutcheon, who had wanted to spread about $60,000 among 28 candidates. The court backed his claim that the caps violated his first amendment rights.
In his decision, Chief Justice John Roberts wrote for a plurality of his colleagues that political speech during a campaign is the most important kind of speech – and ought to be the most protected. One ought to err on the side of removing constraints. The results may be unedifying, but they are no worse than “flag burning, funeral protests and Nazi parades”, to quote Mr Roberts’s list of other kinds of speech the first amendment protects. He cites precedent to warn that using electoral law to level the playing field between haves and have-nots can “impermissibly inject the government ‘into the debate over who should govern’. And those who govern should be the last people to help decide who should govern.”
That is inspiring. But Mr Roberts is as wrong in practice as he is right in principle. The aggregate limits in the US electoral system are meant to fight corruption but the only kind he recognises is the kind in which a politician offers a rich benefactor a legislative quid pro quo. Most corruption is not like that. More common is an inequality of access to politicians, about which Mr Roberts professes himself unconcerned. “Government regulation,” he writes, quoting precedent, “may not target the general gratitude a candidate may feel toward those who support him or his allies or the political access such support may afford. ‘Ingratiation and access . . . are not corruption’.”
Mr Roberts pooh-poohed the likelihood that removing the caps might permit donors to launder big contributions to desired candidates by using other candidates and committees as pass-throughs. But Justice Stephen Breyer, writing for the four dissenting justices, showed that a rich donor can now give up to $2.4m every election cycle (if he wants to donate in every congressional race), as well as $1.2m to party committees, and that the system might be easier to game than Mr Roberts assumed.
This week’s decision advances free speech, but at a high price: tightening the hold of rich donors on US politicians. Maybe there will be some small positive effects. The old caps, by making fundraising inefficient, increased the amount of time legislators had to devote to it. They may now be able to read and talk to voters more. But it is hard to see much practical benefit beyond that.
The mystery is why removing these caps was a matter of such desperate constitutional importance in the first place. A tone of impatience enters Mr Roberts’s prose when he insists: “The government may no more restrict how many candidates or causes a donor may support than it may tell a newspaper how many candidates it may endorse.” But is that a good comparison? Why do donors need to be able to fund 10 candidates when they will be represented by only one congressman? Does backing candidates in distant constituencies not violate the Anglo-American tradition of “representation”? If one takes this tradition – and the idea of citizenship – seriously, it is admirable for an Alabaman to back a candidate in his own state’s Senate race, but meddlesome to back one in New Hampshire.
Money, which does not respect such state boundaries, is introducing elements of a delocalised system in which every citizen votes for the whole legislature at once. You could call it the “Dutch” system, after the national lists used in the Netherlands. You could call it an “at large” system. Whatever you call it, it is a worse system.
The writer is a senior editor at The Weekly Standard
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