Third World America (15 page)

CSI USA: WHO KILLED THE AMERICAN DREAM?

S
o how did we get here?

How did we get to a place where our infrastructure is well past its sell-by date, our schools are failing, our middle class is on life support, and the American Dream is turning into a mirage?

Who took control of our national GPS and set as our ultimate destination the coordinates of a Third World future? Casting about for answers, the knee-jerk response is to point a finger and hurl an enraged
j’accuse!
at Washington. And, in this case, the knee-jerk response is right. But for all the wrong reasons.

Listen to the punditocracy and they’ll tell you—loudly and often—that our politics is “broken” and “paralyzed.” That government no longer works because of bipartisan bickering and polarization. That the parties have moved so far to their respective extremes on the left and the right that collaboration and consensus are no longer possible.

And while the GOP’s decision to respond to the election of President Obama by transforming itself into the Party of No certainly gives that slice of conventional wisdom the surface patina of insight, dig a little deeper and you’ll discover the much uglier truth: Over the past thirty years, the two parties have actually become much more alike—both deeply in the pocket of the big-business masters who fill their campaign coffers.

American politics is indeed “broken”—but not because our leaders are at one another’s throats. It’s broken because the founding democratic principle of “one man, one vote” has been replaced by the arithmetic of special interest politics: Thousands of lobbyists plus billions of dollars equal access and influence out of the reach of ordinary Americans.

The consequences of this corporate takeover of our democracy couldn’t be more profound and far-reaching, affecting every aspect of our lives—from the cleanliness of the air we breathe and the water we drink to the safety of the food we eat, the medications we take, and the products we buy, to the stability of the economy that allows us to keep our jobs, afford our houses, and pursue our dreams.

All of these and more are being dictated by a system of government that determines its priorities in a bazaar of influence peddling.

There’s an old joke about a cop who comes upon a drunk crawling around under a streetlight. “What are you doing?” he asks.

“Looking for my keys,” the drunk answers.

“Where did you lose them?”

“Over there.”

“Well, why are you looking for them here?”

“Because the lighting is better.”

Do you ever find yourself wondering why laws that make no sense get passed while laws that would seem like no-brainers never make it out of committee? Why some issues get pushed to the front of the line, while others die from lack of attention? The answer is simple. Like the drunk following the light, politicians follow the money and the clamor of noisy special interest
groups—leaving the interests of middle-class Americans, like so many car keys, forgotten and left behind.

Some people look at laws and ask, “Why?” or “Why not?” I look at laws and ask, “Who paid for them?”

Since 1964, the American National Election Studies at the University of Michigan has regularly asked voters whether they think the U.S. government is run “for the benefit of all” or “by a few big interests.”
¹
In the mid-1960s, only 29 percent thought “big interests” ran the nation.
²
By the mid-1990s, that number had climbed to 76 percent. And in 2008, 80 percent of Americans surveyed told the Program on International Policy Attitudes that they believed government was controlled by “a few big interests looking out for themselves.”
³

That shouldn’t be a surprise: Over the years there has been an explosion in the number of lobbyists in Washington and the money they spend. In 2009, more than 13,700 registered lobbyists spent a record $3.5 billion swaying government policy the special interests’ way, double the amount lobbyists spent as recently as 2002.
^4,
5

With 535 members of the Senate and the House, that means lobbyists in the halls of power outnumber our elected representatives almost 26 to 1. If we divide $3.5 billion evenly among the 535, it means each member of the legislative branch was at the receiving end of $6.5 million worth of special interest arm-twisting over the course of the year.

And that’s just the money corporate America is spending on lobbying. Millions more are given directly to politicians and the political parties. From 1974 to 2008 the average amount it took to run for reelection to the House went from $56,000 to more than $1.3 million.
^6,
7

For an example of how special interests took advantage of this inflated price tag, let’s look at the financial sector, which was front and center in the fund-raising explosion.
⁸
Over the past two decades, it was the top contributor to political campaigns. According to Simon Johnson and James Kwak in their book,
13 Bankers
, from 1998 to 2008 “the financial sector spent $1.7 billion on campaign contributions and $3.4 billion on lobbying expenses.”
⁹
And the money was, of course, targeted to where it would have the most effect: the campaign coffers of such Senate Banking Committee powerhouses as Phil Gramm, Alfonse D’Amato, Chris Dodd, and Chuck Schumer.
¹⁰
Notice that the bankers’ money rained down on both sides of the aisle. To paraphrase Matthew, the rain falleth on the left and on the right.

The investment paid off in spades with the rollback of the financial regulations that had kept the worst excesses of corporate greed in check since the Great Depression, leaving in their place a shaky edifice of self-policing and cowed regulators powerless to rein in the galloping bulls of Wall Street. The results for corporate America: record profits, record pay packages, and record bonuses. The results for the rest of us: the savings and loan crisis, the corporate scandals of the Enron era, and the economic collapse we are still struggling to dig our way out of.

That collapse, by the way, has only caused the banking lobbyists to redouble their efforts in an all-hands-on-deck effort to thwart financial reform. Over the course of the debate about reforming Wall Street, the finance industry—which has
been bailed out with trillions of taxpayer dollars and cheap loans from the Fed—has spent an estimated $1.4 million a day to convince our lawmakers to kill real reform.
¹¹

For instance, when the Senate was crafting its financial reform bill, it included absolutely no reform of Fannie Mae and Freddie Mac.
¹²
This despite the fact that in just the first quarter of 2010 Freddie—one-half of what the
New York Times
’s Gretchen Morgenson calls “the elephant in the bailout”—reported a loss of $6.7 billion.
¹³

As of May 2010, according to Morgenson, “serious delinquencies in Freddie’s single-family conventional loan portfolio—those more than 90 days late—came in at 4.13 percent, up from 2.41 percent for the period a year earlier.”
¹⁴
And the number of foreclosed units Freddie controlled stood at nearly 54,000, up from 29,145 at the end of March 2009.

“I don’t understand why people are not talking about it,” says Dean Baker of the Center for Economic and Policy Research.
¹⁵
“It seems to me the most fundamental question is, have they on an ongoing basis been paying too much for loans even since they went into conservatorship?”

And why would they do that? It’s part of what Baker calls a “backdoor bailout” of the banks.
¹⁶
In other words, an under-the-radar way to continue shoveling money from struggling taxpayers over to the richest Americans.

This unseemly link between money and political influence is the dark side of capitalism. And like a swarm of termites reducing a house to sawdust, moneyed interests and their lobbyists are making a meal out of the foundations of our democracy.

In 2008, the American people voted for change. But there’s been a change in the plans for change. The detour was created
by D.C. lobbyists who, since President Obama took office, have watered down, gutted, or out-and-out killed ambitious plans for reforming Wall Street, energy, and health care.

The media like to pretend that something’s at stake when a big bill is being debated on the House or Senate floor, but the truth is that by then the game is typically already over. The real fight happens long before. And the lobbyists usually win.

This disconnect between perception and reality reminds me of the time a friend took a family trip on a cruise ship. Her ten-year-old son kept pestering the crew, begging for a chance to drive the massive ocean liner. The captain finally invited the family up to the bridge, whereupon the boy grabbed hold of the wheel and began vigorously turning it. My friend panicked—until the captain leaned over and told her not to worry, that the ship was on autopilot, and that her son’s maneuvers would have no effect.

And that’s the way it is with our leaders. They stand on the bridge making theatrical gestures they claim will steer us in a new direction while, down in the control room, the autopilot, programmed by politicians in the pocket of special interests, continues to guide the ship of state along its predetermined course. America won’t be able to change the disastrous direction it’s heading in until the people elected to represent us go down into the boiler room and disengage the autopilot—which means taking on the hordes of lobbyists who continue to dictate policy in D.C.

Unfortunately, the middle class doesn’t have a gaggle of lobbyists patrolling the corridors of power, offering cash incentives to Congress and the White House to protect the American people from the corporate crooks fattening their bottom
lines (and filling their personal coffers) while our jobs, our houses, and our pensions disappear.

There are no lobbyists for the American Dream.

The epic struggle between financial powerhouses and the American democratic experiment—between the wealthy few and the struggling many—is as old as the country itself.

From the trust busting of Theodore Roosevelt to the major banking reforms put in place by FDR in the wake of the Great Depression, from the monopoly that was Standard Oil to today’s Goldman Sachs, there have always been powerful special interests pitted against the interests of the public.

Indeed, as far back as 1910, Roosevelt warned about the danger of corporations exerting influence on the body politic: “There can be no effective control of corporations while their political activity remains. To put an end to it will be neither a short nor an easy task …” Of course, far from being put to an end, corporate political activity has only gotten more pervasive, more aggressive, more ruthless, and more effective.
¹⁷
Not only have we failed to control corporations, corporations have flipped the equation and taken control of us.

Teddy Roosevelt must have been spinning in his grave in January 2010 when the Supreme Court, in
Citizens United v. Federal Election Commission
, voted 5–4 to extend the right of free speech to corporations and unions, lifting any limits on so-called independent expenditures on political campaigns.
¹⁸
President Obama called the decision “a major victory for Big
Oil, Wall Street banks, health insurance companies, and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans.”
¹⁹

This decision will allow the giant pharmaceutical companies that knowingly permit unsafe drugs to remain on the shelves, the people running chemical plants releasing deadly toxins into the water and air, and the factory farm conglomerates filling our food with steroids to spend unlimited amounts of money to get their water carriers into office and defeat the all-too-rare candidates who actually stand up for the public good.