Tag Archive | "Citizens United"

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What Can $7 Billion Buy?

Posted on 29 April 2014 by admin

A new study indicates that of elites, interest groups, and average citizens, average citizens have almost no influence on the government’s policy decisions.  Researchers from Princeton University and Northeastern University looked at the key variables of 1,779 policy issues and concluded that  “economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.”

Unfortunately, recent decisions by the U.S. Supreme Court make this situation even worse by declaring corporations “people” with the same rights to spend freely during public elections.  The limitations allowed under the ruling still prohibit companies from donating to individual campaigns but instead they can give unlimited amounts to “Super PACs” and other vehicles.

Follow-on rulings take this situation even further.  A court decision in 2012 struck down a law that prohibited corporate contributions in a state election.  There is now no limitation.  No limitation on the amount of money that can be given by corporations to super PACs involved in an in-state election.

Further, in 2014, the court ruled that while contributions by individuals to campaigns still had a cap in terms of the amount given to a single campaign, there is now no limitation on the number of campaigns to which individuals can contribute.   All of these decisions were by 5 to 4 votes with conservatives on the court voting as a block.  And as has been seen, this has released billions of new dollars to enter the campaign process.

Figures which document political expenditures in the 2012 presidential elections show that each presidential candidate spent over a billion dollars, a large increase over that spent in prior years.  Adding up all expenditures on 2012 elections including for example individuals, parties, PACs and super PACs, estimates top $7 billion dollars.  A link shown below will take you to a list of the top ten companies donating to campaigns in 2012.

How else could we spend $7 billion dollars each year?  It could cover the average of the total annual tuition cost for 300,000 in-state students in the U.S. colleges or retire the average total debt of about 200,000 2013 college grads in the U.S.   Or it could provide inexpensive home solar powered electricity to over 56 million people/homes in Africa or dig 233,333 large-scale water wells to serve over 700 million people in Africa and India.  The $7 billion we are spending in one U.S. election is a staggering amount of money!

Unfortunately with these new billions of dollars flowing into campaigns, the magnetic appeal of wealth has grown in its influence to the point at which the campaigns are a real opportunity for everyone, including the politicians, to make vast sums of money.  What happened to public campaign financing, the influence of the average citizen, and a politician’s strength to resist winding up in someone’s political pocket?

After shutting down the government, creating political gridlock in congress, endless hearings on Benghazi, and over 50 votes to repeal Obamacare, as well as unmoving unemployment levels, unabashed gerrymandering of political districts, empty political promises, and the Snowden revelations, there should be little wonder about the low regard voters have for their politicians.  These sentiments have been growing in the last few years as shown by each and every research vehicle.

We, the people, need to wrest back control of our political process.  This means we have to institute firm limits on campaign private and corporate spending and seriously limit the amount of lobbying money available to public officials.  We need to shorten the duration of campaigns for office, provide realistic public financing options and adopt a public, non-partisan and fair methodology for redistricting political jurisdictions. We must redistrict America. We need stricter restrictions on the revolving door of politics that lets government employees use positive regulatory and government decisions as the grease that sets up their upcoming private employment.  Finally, we need term limits established for any elective or appointive post.

This is a tall order but we cannot afford half measures.  If this means we must adopt omnibus constitutional amendments on truth in government or integrity from public officials and elections, so be it.  I would also support a host of new laws that would re-establish our influence over how we are governed.  I am waiting for a politician that will champion these changes and that whose lead I can follow.

Use the following links to gain more information on this topic or look at original source material:


Search Gilens and Page, select “Testing Theories of American Politics – Princeton University”.  This .pdf will give the entire text of the study.

Search U.S. Supreme Court rulings about corporations as people.  Move to page 3 and scroll down to 2nd entry, 08-205 Citizens United vs. Federal Elections Commission and select it for the full Supreme Court decision.













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Income Disparity Grows, Migration Push May Come

Posted on 18 July 2013 by Jerry

Recent studies show that after a brief pause the income disparity of the U.S. has continued to grow, CEOs salaries are back up and belief in U.S. as the “land of opportunity” is faltering.  The gap is widening here and abroad with a couple of notable exceptions, China and India.

As reported in the World of Work Report of 2013 issued by the U.N.’s International Labor Organization, the average ratio of the 15 largest U.S. companies CEO compensation is back to over 500 times the average earnings of their employees or back to the same level as before the market crash of 2009.  This compares to the same measure for the Netherlands at around 60 times, China at 130 times, and the United Kingdom at 220 times.

This of course is a comparison of CEO income to the average worker’s income.  Also this year, Bloomberg reported on the pay multiple of some of the Standard and Poor’s 500 Index of companies between the CEO’s pay and that of their lowliest worker.  The most egregiously high multiple was between Ron Johnson’s compensation package at J.C. Penney’s and his least paid full time employee.  The multiple was a staggering 1,795 times.

Joseph Stiglitz, Nobel Laureate in Economics, has stated that if the income inequality were not enough he sees “increasing economic inequality leading to increasing inequality in political power.”  In his mind the spiral continues leading to increased economic inequality which will not be possible to reverse without significant changes in our economy and how we regulate and run our businesses.

Looking beyond the U.S. at global income disparities, a report from the World Bank’s Development Research Group Poverty and Inequality team draws interesting conclusions.  It’s author, Branko Milanovic, explains how income inequality has been looked at with different formulas applying to different groups.  He argues it is best to look at global inequality composed of individuals, not nations, as this shows the most accurate views of the disparities.

The three major conclusions of this report are that:

  • Researchers who wish to highlight the growing unevenness of global income focus on growing inter-country gaps.  These statistics do not consider population sizes in their respective countries.  Those who wish to show a more positive outcome adjust their numbers to account for the population densities of countries such as China and India.
  • Because of China’s economic growth, supported by India’s, the data shows they are single handedly forcing world population inequality to decline.  The report states, “Perhaps for the first time since the Industrial Revolution, there may be a decline in global inequality.”
  • Attempting to plot the cause of global inequality (using the Thiel coefficient rather than the Gini), the author looks at the reasons for inequality between 1870 and 2000 based on the two factors of “class” and “location”.  Class is defined as the inequalities between the classes of rich and poor worldwide while location is the size of the gaps between mean incomes of one country versus another.  The data shows the importance between these factors has inverted since 1870 so that location is now the dominant factor.

Further the two elements that affect future inequality are economic growth and location.  If the economic growth in the third world stagnates then pressure for migration from poor countries to wealthy ones will increase as people seek to better their circumstances.  This would take advantage of incomes that vary considerably from country to country.

It is best illustrated by the reality that the ‘poorest’ Americans are still at the 60% percentile of world income distribution.  This means our poorest have a higher annual income than 60% of the world’s population.  Absent economic growth, people will seek to migrate to locations where the lowest income is still significantly higher than the incomes of where they are.

These articles raise a few suggestions for how income inequalities should be addressed.   In the United States we must:

  • Enforce the recently enacted Dodd-Frank law that requires companies to reveal their CEO-to-worker pay ratios.  For more than three years this requirement has been bottled up in an SEC that has failed to draw up the rules to implement it.  Of the 94 rules called for in the Dodd-Frank law the SEC has drafted only 39 of the required rules or less than half.  This ratio would increase shareholder and employee pressure on rubber stamp boards of directors that owe their positions to their CEOs and on the greed of higher management to either limit CEO compensation or increase the wages of the average worker.  James Cotton was possibly the first person to propose publishing this ratio in a 1997 article in the Northern Illinois University Law Review.  The dean of the University of Toronto’s Rotman School of Management, Roger Martin, said “When CEOs switched from asking the question of ‘how much is enough’ to ‘how much can I get,’ investor capital and executive talent started scrapping like hyenas for every morsel.  It is not that either hates labor, or wants to crush their lives.  They just don’t care.”
  • Congress must pass a law reversing the Supreme Court Citizens United ruling that removed constraints on the money companies can spend to sway the electorate.  In addition we should require a company’s shareholders to approve campaign contributions.
  • Joseph Stiglitz says the U.S. needs to stop rent-seekers in the U.S. economy who “extract profit from existing industries without contributing value – in the form of innovation, entrepreneurship, and growth – to the economy.  They use their wealth to consolidate their power, by influencing regulations and government policies.  This has happened in many instances – we see it in our military and drug companies, in our banks that succeeded in stripping away regulations, which allowed them to earn huge profits at the expense of the rest of society – and it’s not a model for a competitive dynamic economy.”  Further he supports the raising of taxes on capital gains and suggests it should be taxed at the same rate as income.  He states, “And government can use those increased revenues to invest in those areas that will give a boost to the opportunities of the middle and bottom income earners – especially investments in education, health, technology, and infrastructure.”

These are just a few of the most obvious steps we should take to rebalance the economic differences between the top 1% and the rest of our citizenry.  We should support politicians that are working this agenda.  Further, we need to invest in the economic growth in the rest of the world to insure the collective economic security and fairness increases for all the world’s citizens.

Use the following links to obtain additional information:

http://www.ilo.org/global/research/global-reports/world-of-work/lang–en/index.htm .  Go to the right hand column scrolling country and region briefs until you reach your area of interest.  Select the country of interest.




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