The Sotomayor Hearings And Financial Bubbles

Is corporate influence a campaign finance problem?

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E.J. Dionne in the Post finds a creative way to link the Sonia Sotomayor hearings to the economic crisis. Creative, yes, but I'm not sure that it works.

He writes about the soon-to-be-decided Citizens United v. FEC case, and how the conservative majority on the Court have steered the case to the broad question of corporate support for political candidates.  This opens the door to the possibility that Roberts et al may overturn precedent and thus make it easier for corporations to spend money to support or oppose candidates.

Dionne writes:

It is truly frightening that a conservative Supreme Court is seriously considering overturning a century-old tradition at the very moment the financial crisis has brought home the terrible effects of excessive corporate influence on politics.

In the deregulatory wave of the 1980s and '90s, Congress was clearly too solicitous to the demands of finance. Why take a step now that would give corporations even more opportunity to buy influence? With the political winds shifting, do conservatives on the court see an opportunity to fight the trends against their side by altering the rules of the electoral game?

"Too solicitous" is one thing. I think many people on both the left and right could agree with that--but maybe for different reasons. The left might focus on the failure to regulate derivatives, while the right might focus on the moral hazard created by a long history of bailouts of "too-big-to-fail" institutions.

Whatever your perspective, most of us agree that excessive corporate influence contributed to the current situation. But it does not follow that this influence had anything to do with campaign finance. Is there any evidence that corporate donations or other support were linked to any particular actions (or failures to act) by the government in the lead-up to the crisis?

But even if there were some connection, it's clear that the current restrictions on corporate political activity that Dionne wants to see preserved did nothing to stop the growth of influence. So clearly corporations don't need to buy direct support.

One part of the problem is that the regulators are drawn from the people they're supposed to be regulating. But that has nothing to do with "buying influence"--these positions are not bought. It's a product of a situation in which one group of people--financiers--stand the most to gain or lose from certain policies, so of course they will focus on influencing those policies more than anyone else. I don't see how placing or removing barriers to money can change that predictable scenario.