Almost two centuries ago, a Russian intellectual from a wealthy family travelled to Western Europe to study philosophy and the Arts. This really wasn’t novel or unusual; at that time most Russians of a certain class had the opportunity at some point in their lives to visit, live, travel in Europe, the Middle East, or Asia and a good number used this time studying and listening to lectures from “the Masters” (Kant, Hegel, Comte…)
So Ivan Kireevsky was in good company as he travelled through Germany and France, attending courses at the great universities along the way, resting and recharging with a multitude of his fellow countrymen at their country houses, in taverns, at clerical retreats.
Yet, despite the seemingly idyllic, luxurious surroundings of this interlude, Kireevsky returned to Russia shocked and appalled. For in the West he had encountered the Industrial Revolution at its heyday…and he was horrified. Slums, refuse in the streets, orphaned and homeless urchins hiding in the shadows, fighting over a crumb of bread. Black skies over the industrialized cities in Germany. Foul water, foul air, indescribable noise and pollution. 12-18 hour working days, amputees from accidents with the new machinery or discarded invalids with chronic consumption, TB, and other lung disorders from the filthy, miserable conditions.
Inequality between rich and poor was nothing new to Kireevsky. He grew up with Tsarist Russia class division, in a rarified environment of unrestrained opulence.
But the uncompassionate greed he saw among industrialists and governments in the West – their casual disregard for human suffering as their pursued more wealth, more money, more capital like a ravaging addiction.
For Kireevsky, it seemed apparent these captains of industry had lost all connection with their humanity, their conscience, their common sense. These capitalists had lost any understanding that conditions of the environment in the world around them – including those of their fellow human beings – affected them and their children just as much as it did the dying and despondent.
Returning to Russia, he wrote:
“Industry rules the world without faith or poetry. In our time it unites and divides people. It determines one’s fatherland; it delineates classes; it lies at the base of state structures; it moves nations; it declares war, makes peace, changes mores, gives direction to science, and determines the character of culture. Men bow down before it and erect temples to it. It is the real deity in which people sincerely believe and to which they submit…” (See Revolution from Within p. 54 for full citation)
Flash forward to today and it is interesting to hear we do not have any money in the United States for schools, children, health, repairing our roads and archaic infrastructure…the list goes on… and we’re in debt up to our necks and over our heads so that we’ve indentured the future of our children and our children’s children. In this light, it was fascinating to read this report from the Sunlight Foundation and view these infographics that have been making their way across the Internet. Zerohedge consolidated the whole story beautifully:
Repost from Zerohedge, by Tyler Durden, 3/16/2015 http://www.zerohedge.com/news/2015-03-16/words-greatest-investment-every-dollar-spent-influencing-us-politics-corporations-ge
The first time we read the recent analysis by the Sunlight Foundation in which it combed through 14 million corporate records, including data on campaign contributions, lobbying expenditures, federal budget allocations and spending, in order to determine the “rate of return” on lobbying and spending to buy political goodwill, we were left speechless.
To be sure, we had previously shown that when it comes to the rate of return on lobbying, the rates were simply staggering, and ranged anywhere between 5,900% for oil subsidies, to 22,000% for multinational tax breaks and even higher for America’s legal drug dealers.
But nothing could prepare us for this.
According to the foundation’s analysis, between 2007 and 2012, 200 of America’s most politically active corporations spent a combined $5.8 billion (with a B) on federal lobbying and campaign contributions. What they gave pales compared to what those same corporations got: $4.4 trillion (with a T) in federal business and support.
Putting that in context, the $4.4 trillion total represents two-thirds of the $6.5 trillion that individual taxpayers paid into the federal treasury. Said otherwise, by “spending: a paltry $6 billion to bribe the US government, or just a little more than what GM will spend on stock buybacks alone, US corporations are getting the direct benefit of two-thirds of US taxpayers’ labor!
And here is the visual representation of this stunning finding: for every dollar spent on influencing politics, the nation’s most politically active corporations received $760 from the government.
Which translates into an Internal Rate Of Return of, hold on to your hats folks, 75,900%!
Like we said, speechless.
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Some more details from the Foundations’ must read report:
Do political donors get something in return for what they give?
Four years ago, the U.S. Supreme Court suggested the answer to that question was no. Corporate spending to influence federal elections would not “give rise to corruption or the appearance of corruption,” the majority wrote in the landmark Citizens United v. Federal Election Commission decision.
Sunlight decided to test that premise by examining influence and its potential results on federal decision makers over six years, three before the 2010 Citizens United decision and three after.
We focused on the records of 200 for-profit corporations, all of which had active political action committees and lobbyists in the 2008, 2010 and 2012 election cycles — and were among the top donors to campaign committees registered with the Federal Election Commission. Their investment in politics was enormous. There were 20,500 paying lobbying clients over the six years we examined; the 200 companies we tracked accounted for a whopping 26 percent of the total spent. On average, their PACs, employees and their family members made campaign contributions to 144 sitting members of Congress each cycle.
After examining 14 million records, including data on campaign contributions, lobbying expenditures, federal budget allocations and spending, we found that, on average, for every dollar spent on influencing politics, the nation’s most politically active corporations received $760 from the government. The $4.4 trillion total represents two-thirds of the $6.5 trillion that individual taxpayers paid into the federal treasury.
Welcome to the world of “Fixed Fortunes,” a seemingly closed universe where the most persistent and savvy political players not so mysteriously have the ability to attract federal dollars regardless of who is running Washington.
It’s not a “Republican” issue, nor a “Democrat” issue – it is a “Political” issue. Worse, it is a “Democracy” issue. Or lack thereof.
During the six years we studied, newly elected Democratic majorities took control in the House and Senate. Two years later, the White House shifted from Republican to Democratic control, and two years after that the GOP came back to take the House. The collapse of the housing bubble in 2007 led to massive bailout efforts by the Treasury Department and the Federal Reserve Board, two massive stimulus bills and the loss of more than eight million jobs. Congress passed laws that overhauled health care insurance and financial industry regulation. Troops surged in Afghanistan and withdrew from Iraq. There were 16 separate “continuing resolutions” to fund the government, a debt ceiling standoff that caused a downgrade in the nation’s credit rating and a “super committee” to wrestle with the federal budget. As middle class Americans lost ground, the Fixed Fortune 200 got what they needed.
What they needed included loans that helped automakers and banks survive the recent recession while many homeowners went under. It included full funding and expansion of federal programs started in the 1930s that, year after year, decade after decade, help prop up prices for agribusinesses and secure trade deals for our biggest manufacturers. It included budget busting emergency measures that funneled extra dollars to everything from defense contractors to public utility companies to financial industry giants. The record suggests that the money corporations spend on political campaigns and Washington lobbying firms is not an unwise investment.
With a 75,900% IRR, we tend to agree.
The Fixed Fortune 200 come from a wide range of industries. There are a host of familiar names among them, like Ford Motor Company, McDonald’s and Bank of America, as well as some less famous, like MacAndrews & Forbes, the Carlyle Group and Cerberus Capital Management. (For the complete list, including what they gave and what they got, click here.) There are retailers and investment banks, construction and telecommunications firms, health insurers and gun makers, entertainment conglomerates, banks and pharmaceutical manufacturers, among others.
Overall, the Fixed Fortune 200’s PACs, employees and their family members gave $597 million to political committees and disclosed spending $5.2 billion on lobbying. They make this enormous investment in politics in large part because their businesses are inextricably entwined with government decisions — including spending decisions.
In short, government is the best “business partner” money can buy:
For example, the federal government issued contracts to purchase goods and services that totaled a little more that $3 trillion during the period; companies among the top 200 corporate political givers won $1 trillion of that, a third of the total. The Treasury Department managed $410 billion in loans and other assistance issued under the Troubled Asset Relief Program, created by Congress to cope with the 2008 financial crisis; of that amount, $298 million, about 73 percent, went to 16 firms among the Fixed Fortune 200. When the Federal Reserve took extraordinary measures in the wake of the 2008 financial crisis, it funneled nearly $2.8 trillion through 29 Fixed Fortune firms. The companies that participated the most in politics got huge returns.
Of the 200 corporations we examined, we could sum the financial rewards for 179. Of those, 138 received more from the federal government than they spent on politics, 102 of them received more than 10 times what they spent on politics, and 29 received 1,000 times or more from the federal government than they invested in lobbyists or contributed to political committees via their employees, their family members and their PACs.
As for the other 21 companies on our list, while we could not quantify the financial benefits that some received, we were able to identify them. Some examples:
- Arch Coal lists the Tennessee Valley Authority (TVA), the government corporation that’s the largest public electricity producer, as one of its three biggest customers. TVA does not release data on its coal purchases.
- Forest City Enterprises does not appear as a landlord in the Government Services Agency’s database of federal rental agreements, though its annual report notes that the U.S. government is the third-biggest customer for its pricey New York City office space.
- Occidental Petroleum has leases on federal land to extract natural gas, but the government does not release information on how much that gas is withdrawn or how much it is worth.
- And while the government has so far refused to release information on what retailers get the most purchases via food stamps, Wal-Mart went so far as to acknowledge in a filing with the Securities and Exchange Commission that reductions in the now $78 billion-a-year Supplemental Nutrition Assistance Program — or food stamps — could have a significant impact on the company’s earnings, which totaled $476 billion in its most recent fiscal year.
Of the 200 companies analyzed for Fixed Fortunes, 28 are in what the money in politics research organization the Center for Responsive Politics classifies as the communications and electronics sector, 21 in healthcare, 13 in defense and aerospace, 13 agribusinesses, 11 in energy and natural resources, and 7 in transportation. The biggest sector, accounting for 48 of the 200, was finance, insurance and real estate, which is consistently the largest source of campaign funds for politicians cycle after cycle. Congress and the executive branch have paid particular attention to the industry, approving hundreds of billions in aid to help it weather the financial crisis. Meanwhile, the Federal Reserve advanced trillions in credit, which the nation’s central bank hoped would trickle down through the rest of the economy.
And then there is the military industrial complex:
Weapons manufacturers like Boeing and Lockheed Martin, both of which disclosed spending more than $10 million each year on lobbying, also made the list. So did McKesson, a pharmaceutical wholesaler that is the biggest vendor for Veterans Affairs, and the Carlyle Group, a wealth management firm started by former government insiders who invest in firms that have significant involvement with government, such as defense, telecommunications and health care.
But nothing, nothing, compares to the return that Wall Street got on their “investment” in government. And the biggest irony: some of the firms bribing, pardon, lobbying the US government and generating the greatest returns were not even American!
Companies with the biggest returns on their political investments include three foreign financial service and banking firms, UBS and Credit Suisse Group from Switzerland, and Deutsche Bank of Germany, all of which benefited from the Treasury Department’s taxpayer-financed rescue of American International Group. Investment banks Goldman Sachs and Morgan Stanley as well as commercial banks like JPMorgan Chase & Co., Citigroup, Wells Fargo and Bank of America also received far more from government than they put into politics: They benefited from the bailouts of the financial industry undertaken by Treasury and the Federal Reserve.
Ironically, one thing the Fixed Fortune 200 did not do, for the most part, was take advantage of the “new opportunities” to spend on politics that the Citizens United decision afforded them.
The 200 corporate donors gave just $3 million to super PACs, with the bulk of that amount a single $2.5 million donation from Chevron to the Congressional Leadership PAC, a super PAC that’s been linked to House Speaker John Boehner. It’s important to note, however, that contributions by these companies to politically active nonprofits (a category that includes the Chamber of Commerce) are impossible to track because of tax laws that allow those entities to shield donors.
And while one may be disgusted at the unprecedented crony capitalism and corruption that has taken over DC, the root of that frustration should be the very fabric of what passes for democracy in the US – a fabric that is now mutated beyond recognition in all three branches of government.
More than seven years after Washington passed the first measures to stimulate the economy as the housing bubble started to burst, more and more Americans are living on less and less, without as much savings and other assets to fall back on in hard times. Washington policies that have restored corporate profits and made the stock market boom have left much of the country behind. Perhaps that’s why a whole host of polls, from networks and news organizations and nonprofit groups, show large majorities of Americans, year after year, saying that the country is on the wrong track.
In its Citizens United decision, the court took for granted that “favoritism and influence” are inherent in electoral democracy and that “democracy is premised on responsiveness” of politicians to those who support them. We found ample evidence of that.
“The appearance of influence or access,” the court said, “will not cause the electorate to lose faith in our democracy.”
It appears that the electorate — who stayed away from the polls this year in droves — might not agree.
But don’t worry: at least under Obama regime of daily choreographed distraction, gays and lesbians can legally marry, illegal immigrants will no longer be deported and women have never been more “equal” with men. Oh and the repeat invasion of Afghanistan is solely to punish a few head-cutting terrorists (who got their funding, training and weapons with the blessings of Qatar and the CIA).
And don’t forget to bash that evil, evil regime in Russia where democracy is being trampled on a daily basis: the mainstream media which is also controlled by a handful of US billionaires, will have you know.
In fact, whatever you do just please ignore what is happening in the US right under everyone’s noses.
And just in case what is happening is still unclear, here is the breakdown of the Top 25 contributors (full data set can be found as spreadsheet, html, or csv), or rather beneficiaries, of America’s so-called “democracy.”