Interest groups and factions have existed since the beginning of the United States, as James Madison recognized, and political parties throughout American history have been coalitions of interest groups. Corporations and lobbyists representing the upper classes and various big business interests have always been a major influence on Congress and the entire political system, particularly since the nation began to industrialize after the Civil War. They have been well-represented by the Federalist, Whig and Republican Parties for over 200 years, while in the past the Democratic Party was led by the Southern slaveholding interests and also claimed to represent lower-class white farmers and laborers. Since the Progressive Era, modern liberals and social democrats have insisted that the federal government had an important role to play in society, despite the intense criticisms of conservatives who preferred to rely on the free market. At the same time, they have recognized that many government programs had been poorly planned and hastily conceived, with no real thought as to how they would be implemented on the state and local level. This is especially true in the dire economic circumstances that exist in the Western world today, with mass poverty and unemployment rising to levels not seen since the Great Depression of the 1930s. Continued emphasis on the needs of private, corporate interests at the expense of the public interest will only ensure that the current depression will worsen. In short, the country very badly needs another New Deal, not a continuation of business of usual in which elite interests dominate the entire system.
Interest groups have existed from the beginning of U.S. history and in many respects American political parties have always been coalitions representing coalitions of these groups. At the time when the Constitution was written in 1789, for example, and for many decades afterward, important interest groups included Southern slaveholders, Northern merchants and manufacturers and small farmers in the West. Politics consisted of conflict and compromise between these interest groups at least up to the time of the Civil War. After 1865, when the U.S. became an industrial economy controlled by large financial or corporate interests, the capitalist group was the most important interest group, and so it remains today, particularly because of large expenditures on lobbying and campaign donations. For most of its history after the Civil War, the Republican Party has been favorable to these interest groups, while in theory at least the Democrats have claimed to represent the working class, small farmers, middle-class progressives and reformers and in recent times, blacks and members of other minority groups. In addition, as the U.S, urbanized and industrialized, the bureaucracy and civil service expanded at all levels as the government was called upon to perform more tasks in domestic and foreign policy, and therefore became an important interest group in its own right. Here again, as the supposed part of ‘big government’ the Democrats were most closely associated with government employees and the unions that represent then, although the Republicans also claim to be the champions of the military and defense-spending.
If the Founders of the United States had not been prepared to engage in major compromises between various interest groups, the Constitution of 1787 would not have been written nor would it have been ratified. Northern interest groups, represented by Alexander Hamilton and John Jay, obtained the commerce clause that gave the federal government very broad powers over the economy. For Hamilton and the Federalist Party, the main purpose of the national government was to assist in the industrialization of the country with protective tariffs and a national bank, although Jefferson and the Southern elites opposed these policies. Northern merchants and commercial interests wanted a new Navigation Act that would protect American shipping and trade, and the Southern leaders were prepared to grant this power as long as their special requirements were also met. Like Jefferson, they had also concluded that even though a strong central government was a great potential danger to slavery “the creation of such fiscal and military powers was essential” (Van Cleve, 2010, p.113). Since the majority of the population consisted of small farmers who had been hostile to the Constitution, Hamilton opposed democracy and would have preferred a Senate and President elected for life and chosen by me “preeminent in ability and virtue” (Kaplan, 20012, p 80). He controlled the Electoral College to ensure the election of Washington, with John Adams as vice president, although the latter never particularly liked or trusted him (Kaplan, p. 81).
Northern states were already moving to abolish slavery, either immediately of gradually, although it lingered in New York and New Jersey into the 1830s. Even their most openly antislavery delegates at the Convention, including Hamilton and Benjamin Franklin, avoided any mention of using the powers of the new federal government against it. That would have ended the Union before it even began (Van Cleve, p. 109). In return for agreeing to the commerce clause of the Constitution, the Southern planters received the three-fifths clause, that allowed them to count their slaves as 60% of a white person and gave them that many more seats in the House of Representatives had the federal formula been restricted to the voting (i.e. white) population alone. In addition, Congress was forbidden to close the African slave trade until 1808 and the Northern states were bound by the fugitive slave clause to return any escaped ‘persons bound to service’ to their owners (Van Cleve, p. 114). In 1770-90, the slave population of the U.S. grew by 50%, mostly by natural increase rather than importation of slaves from Africa, which was unlike the situation in Brazil and the West Indies (Van Cleve, p. 103). In addition, slavery was already expanding into the Old Southwest even though Congress had banned it north of the Ohio River, and soon the great cotton boom would breathe new life into an institution that was widely thought to be in decay in 1787.
These familiar divisions between regional factions and interest groups continued in the second political party era in the 1820s-50s, and were reflected in divisions between the Whig and Democratic Parties. Henry Clay gave his famous speech in support of the American System to the House of Representatives in 1824, although Alexander Hamilton had used the same term decades before. It rested “on the idea of harmonizing all the segments of the economy for their mutual benefit and of doing so by active support from an intervening national government” (Baxter, 2004, p. 27). Two new parties would soon emerge by the end of the decade, the Democrats and Whigs (National Republicans) and the old issues of an activist federal government favoring industrialization and a states’ rights party representing agrarian and Southern slave holding interests would revive. Slave owners like John Randolph and John Tyler claimed to be the true Jeffersonian Republicans in blocking a system that they regarded as dangerous to their section (Baxter, p. 21). They maintained that the South’s exports would be damaged by protectionism and that it was “far better to supply raw materials to Europe and purchase imported manufactures, a natural process” (Baxter, p. 29). This was especially true because of the great cotton boom in the South and the tremendous expansion of slavery that no one had expected in the 1790s, and it drove the two regions further apart than ever.
In modern democratic society, the power of the bureaucracy increased exponentially with urbanization and industrialization, particularly when it was called upon to deal increasingly with social and economic problems. As Steven J. Cann put it, “the process of industrialization brings urbanization, and urbanization exacerbates problems such as poverty, poor housing, poor health, crime, hunger, malnutrition, sewage disposal, and alienation, to list just a few” (Cann, 2006, p. 9). During the liberal-reform waves of the Progressive Era (1900-20), the New Deal (1933-4) and the Great Society (1964-68) in the United States, the civil service was expanded to regulate capitalism in a variety of ways, to administer large parts of the economy and the growing social welfare state. In the 20th Century, the administrative state has become the fourth branch of government, and affects the life of the ordinary person in many ways, from health care to the environment to airlines fares and highway construction. Of course, with the growth in the power and influence of the civil service, opportunities for bribery, corruption, authoritarian behavior and catering to special interests instead of the public interest became far more common as well. Building public trust and confidence in the civil service and political system in general has been a chronic problem in the U.S. and other Western nations in recent decades.
During the 1960s, despite the tremendous economic prosperity and power of the nation, public administration often failed to serve the public interest, particularly in the implementation of all the new programs. Part of the reason this was occurring because of the decentralization of power given to the executive branch in the Constitution. Bureaucracies became corrupted by special interests and political operatives who exploited the obvious weaknesses within the system itself (Wood, 1955, pp. 3-4). Government did attempt to address a host of issues that had been long neglected such as poverty and civil rights. Its failures of implementation led to a considerable backlash against Washington from both the Left and the Right, with many members of the public angered that their ideas were not being respected and that they had no real voice in matters affecting their communities (Ruscio, 2008, p.3). To many critics like Theodore Lowi, the Great Society was thus very different from Franklin Roosevelt and his implementation of the New Deal in the 1930’s. Many different private and corporate interests wanted his new programs and regulations to be restricted or reduced. FDR refused to bend on this and instead focused on the needs of the public. This allowed his administration to create polices that were openly embraced by the public, which increased their confidence in him and ensured that he would be elected to four terms (Edward, 2005, pp. 1 -7).
Corporations donate massive amounts of money to politicians and political parties leading to a widespread public perception that big money has corrupted the political process. In 2000, the presidential elections cost $3 billion, which increased to $4.1 billion in 2004 and $5.3 billion in 2008, while the off-year elections cost $1.6 billion in 1998, $2.2 billion in 2002, $2.8 billion in 2006 and $3.6 billion in 2010 (OpenSecrets.org, 2011). In 2012, the presidential elections are likely to cost $6 billion or more, since the floodgates are open for special interests to donate unlimited amounts, and in secret. Almost all of this money came from large corporations and wealthy individuals, who can now give unlimited amounts of money because of Citizens United and other recent Supreme Court decisions. With the appointment of John Roberts and Samuel Alito to the Supreme Court, earlier decisions that placed limits on corporate financing of elections such as Buckley v. Valeo (1976), Austin v. Michigan Chamber of Commerce (1990) and McConnell v. FEC (2003) were overturned. In the past, the Supreme Court had maintained that unlimited campaign donations gave rise to “corruption or the appearance of corruption”, but the Roberts Court denied this (Hasen, 2011, p. 583). Roberts, Alito and the other three Republican justices took “an expansive view of corporate free speech rights” when striking down all such limits (Hasen, p. 587). They also overturned provisions in the Bipartisan Campaign Reform Act (McCain-Feingold Act) of 2002 that put limits on expenditures for television and radio advertisements designed to influence elections. In the 2008 elections, John McCain actually accepted public financing for his campaign, as had Barack Obama before finally deciding to opt out. As McCain predicted, this would mean the end of public financing for any future presidential elections, while Citizens United simply opened the floodgates to unlimited donations and expenditures.
One important example of how corporate money corrupts the political process is in energy policy, especially in keeping the country dependent on fossil fuels and weakening environmental protections. Senator John McCain called the Energy Policy Act of 2005 the No Lobbyist Left Behind Bill, and Senator Hillary Clinton made an issue of it in the 2008 Democratic primaries since Barack Obama voted for the it. This law passed both Houses of Congress with bipartisan support, and offered $1.6 billion in grants and $12.3 billion in subsidies, mostly for the oil, coal and nuclear industries. Among its significant provisions was the Halliburton Loophole, which allowed hydraulic fracturing in methane gas extraction to be exempt from the Safe Drinking Water Act, which also benefitted other major energy companies such as ConocoPhillips, Chevon-Texaco and Devon Energy, which spent $15 million of the 2004 elections and $70 million on lobbying Congress (Grifin, p. 12). It also exempted oil and gas companies from the Federal Water Pollution Act and restricted the ability of states to regulate offshore drilling, including in the Gulf of Mexico—which is where the Deepwater Horizon explosion led to the worst oil spill in history a few years later.
In 2000-08, the energy and natural resource sector spent $304 million on federal elections, 72% of which went to Republican candidates. Of this $141 million came from the oil and gas industry, and overall these industries were the fifth largest contributors to elections, with finance, insurance and real estate (FIRE) always in first place. More importantly, energy and natural resource companies spent $2 billion on lobbying during the same period, and had allies in control of the Energy Task Force chaired by former Halliburton CEO Dick Cheney, as well as the key House and Senate Committees. In George W, Bush, they also had a Texas president whose family had been closely connected to the oil and gas industry for decades, and had himself been head of an independent oil company (Gevi and McNabb, 2001, p. 93). Under these highly favorable circumstances in 2005, the real question is not whether the energy industries were in control of the entire process, since they obviously were at every level, but that Democrats and environmental groups were able to obtain some tax breaks and subsidies for conservation, renewable energy, hybrid vehicles and energy-efficient appliances. Since the bill passed with bipartisan support in both houses of Congress, and was overwhelmingly favorable to the oil, coal and nuclear industries, the Democrats and their allies were only able to obtain some concessions for they allies and interest groups (Sherman, 2009, p. 36).
Energy policy is just one of many examples of how the power of corporate money controls Congress and both political parties to the detriment of the workers, consumers and the public interest in general. Wall Street and the financial industry lobbied Congress heavily to weaken laws and regulations that controlled speculation of the kind that led to the Great Depression of the 1930s, and then when the inevitable crash came in 2008-09, they lobbied for the Troubled Assets Relief Program (TARP), the most expensive corporate bailout in history. Combined with trillions more from the Federal Reserve, and the lost wages, incomes and home values, the total cost of this crash was higher than the Gross National Product of the United States. At present, a proposed amendment to the Constitution to overturn the Citizens United decision and ban corporate donations has already been proposed in Congress although it has not found many co-sponsors. This type of amendment should be passed, because the power of big money in politics has turned the country into an oligarchy rather than a democracy.
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