There is a common colloquialism which says that money talks. This statement is as true in politics as it is in business.
So the best way to determine what a particular party or a particular politician is going to do is take a closer look at who is giving them money. I’m not suggesting, by the way, that these legislators are taking bribes. That would be illegal and most of these folks are lawyers and recognize the consequences of taking a bribe. But what is going on is not too far removed from that.
Let’s say that I’m the head of a big agribusiness. I make my money selling corn. If the price of corn goes up, I make more money. If the price of corn goes down I make less money. So I’m a big fan of ethanol because it makes my investments in corn more valuable. I’m going to seek out those powerful legislators who have an opportunity to influence our energy policy and find out which ones either support or can be convinced to support legislation subsidizing or mandating the use of ethanol. Those are the ones who are going to get my financial support for re-election.
Let’s say that I’m an ambitious politician in a corn growing state. I’m going to try to educate myself on all government policies that can improve the economics of my state. I’m also going to support policies like ethanol that increase the cost of corn even though this also raises the world-wide cost of food and may result in some people starving to death in poor countries.
Lobbyists complete the picture. They are the matchmakers who introduce those with money to those who have the power to influence government policy.
So by looking at the how the flow of money changed in the last election cycle, we can start to get a picture of what the newly empowered Republicans are going to do during their time in power. That should give us a clearer picture of what sort of policies they are going to actually support. We can then compare those policies to the promises they made to the public when they were running for office.
So let’s step through the list.
Republican leaders got $5M over the past two years from major health-care firms and employees. Boehner and Cantor themselves received over $2M of that. Why? Is it because these companies think the current health-care reform bill is socialist, job-killing, or budget-busting? No. It’s because attempts to reduce health-care spending will affect their bottom line. They want things to stay as they are even though that status quo would ultimately bankrupt the country.
Banking and Finance
Cantor also raked in another $2.4M from finance, insurance, and real estate industries. That represents a 40% increase over 2008 and puts Cantor well ahead of the rest of his Republican peers. Why? Is it because these companies think that the deficit is too high and government has to reduce spending? Is it because these companies are eager to hire more workers, but the government won’t let them? No. It’s because they want to return to the less regulated days of the Bush administration and Cantor has gone on record as supporting that as way to create jobs.
Spencer Bachus is the new Financial Services Chairman. He received more than $1.2M from banks which was the majority of the money he raised. Guess what he has said he is going to do? Yup, reverse the Wall Street regulatory changes put in place over the last two years to prevent a repeat of the recent financial meltdown.
Fred Upton is the new chairman of the Energy and Commerce commission. His take was up 50% from 2008 as a result of contributions from DTE, CMS, and Edison Institute. They are all looking for regulatory relief which will allow them to continue operating big coal burning power plants. Upton has already indicated that this is something he supports.
Farmers gave their chairman $600K.
Defense contractors gave their chairman half of his total contributions.
Even Paul Ryan who is supposed to be the spending cop got $1.4M in contributions from banks, hedge funds, investment houses, and other financial services companies. Gee, I wonder what they are interested in?
So based on this data what do the next two years look like?
Well my guess is that they will look surprising like the past eight years of the Bush administration. Regulations will be relaxed. During the Bush administration it was under the mantra that the free market can regulate itself. This time the excuse will be that regulations kill jobs. You would think that the whole Republican Party has amnesia, but it isn’t really amnesia, just business as usual.
They will do their best to unravel health care reform without any sincere effort to replace it even though the status quo is unsustainable. They will roll back the financial regulations that were put in place to prevent another financial meltdown even though the bodies are not yet cold from the last financial meltdown. They will put pressure on the administration to expand deep water oil drilling as if the BP Oil spill never happened. They will expose us to new ecological disasters through the same cozy relationships between regulators and the industries that they regulate. They will slow our transition away from fossil fuels because the industries that make money off those technologies have a vested interest in their continuation.
They will do all this while telling voters that these laws increase jobs and decrease the deficit, but their actions won’t result in any significant job growth or any dramatic deficit reduction.
Want to know how they manage to do that?
We’ll cover that in the next post.