President Barack Obama recently made an important speech about growing inequality and declining mobility in our economy. Regrettably, he missed an opportunity to talk about the fundamental issue that underlies both.
Big money has taken over our government and is robbing America blind.
The wealthy and the powerful in our country have their thumbs on the scale of democracy and are bending our government to further their own goals.
We now have more income disparity than at any time in the last century, and the wealthy are using their money to shape political outcomes. Research at the federal level shows that legislators and policy makers are vastly more attentive to the interests of their donors than they are to those of ordinary voters. Although we each get one vote — and some of us have a hard time hanging on to that — we are not all represented with the same vigor.
When big-money donors spend in political campaigns, they create a feedback loop in public policy that further advances their own interests, deepening the political and economic chasm between themselves and ordinary people.
Take the financial sector. Thanks to generations of coordinated effort by well-funded foundations and think tanks, we have seen the growth of an uncompromising belief in free market capitalism. One outcome has been the deregulation of our financial system, and the consequence has been the accumulation of vast fortunes in the hands of a very few.
The U.S. finance industry’s share of gross domestic product is at an all-time high. The finance sector of our economy is growing at the expense of the manufacturing and service sectors. Powerful economic players have used deregulation to gain special privileges and excessive market power and have used these to rake in more compensation than their contributions merit. Economists call this “rent-seeking.”
People working at the top of the finance sector are reaping disproportionate benefits, with growth in overall income going predominantly to a few players in the highest tier of this sector. Some estimate that as much as 50 percent of the income growth in the finance sector may be attributable to economic “rents” — people getting paid more than they’re worth by manipulating the rules. Even when their complex derivatives blow up, these titans of finance use their economic and political power to command government bailouts.
That’s we, the taxpayers, bailing them out.
Now, I believe in free enterprise, and I believe that economic opportunity and political agency go hand in hand. I’m not against people getting rich, nor against rich people having their say in politics. But the job of government in a democracy is to work in the public interest — to provide just the right amount of regulation to preserve the balance when those with vast wealth try to put a heavy thumb on the scale of political equality in favor of their own narrow interests.
Today, some players are working for an unregulated system of free-market capitalism and no-limits, “money is speech” campaign financing under which the wealthy few are free to exert as much power as they can, in order to get the public policies they want. Wealthy donors use their money to buy campaigns, lobbying, gerrymandering and a surgically altered electorate. The rest of us, meanwhile, seem helpless to pivot public policy in a constructive direction. The finance sector is only one example in which the representational inequality favoring the very rich leads to disastrous consequences for most Americans.
For the sake of a working democracy and a robust economy, we the people must push back on big money in politics. To reverse the growth in economic inequality and the decline in economic mobility, we must work for reforms that promote political equality. It’s the righteous counterweight to the power of big money. That means meaningful campaign finance reform — just the right amount of regulation to make democracy work for all of us. We can’t afford to give up on this ideal.
Ann Luther lives in Trenton and is the president of the board of Maine Citizens for Clean Elections. She was recently recognized with the Roger Baldwin Award by the ACLU of Maine.