Or could it be that it's exactly this sort of reflexive government-bashing that makes it easy for the general public to elect fools and charlatans? After all, if government is the problem, why would people bother electing representatives who take governing seriously? Heck of a job, Brownie.
Regardless, I think your thesis is false. A lot of the powers we've taken away from government lately (regulation of financial services, regulation of financial markets, regulation of campaign contributions) have made us worse off, and specifically have made it easier for RIAA to buy legislation like this.
regulation of financial services, regulation of financial markets
This isn't going to be rehashing the Glass-Steagall myth, is it? See, e.g., [1]
regulation of campaign contributions
Isn't this in itself a repudiation of democracy? We're not talking here about Blagojevich-style corruption in the election process. If you're worrying about campaign contributions, that boils down to how much advertising a campaign can buy. If you're worried about a candidate advertising a lot, that's pretty much a vote of no-confidence in your fellow Americans' ability to weigh options and vote rationally.
Also, if you're one of those people horrified that corporations can now contribute to campaigns, can you tell me where the line should be drawn? I'm sure you don't object to my right to contribute to a campaign, nor my right to pool money with a friend to do so. If two of us can do so, why not, say, my whole club (e.g., my hypothetical flying club wants to have elected the guy who promises to grant a permit to expand the airport in town)? As this scales up, at some point we need a formal structure to organize things, which is legally recognized by a corporation; why can't my incorporated flying club make a contribution?
"If you're worried about a candidate advertising a lot, that's pretty much a vote of no-confidence in your fellow Americans' ability to weigh options and vote rationally."
One's ability to weigh options is predicated on the fact that people have awareness of the options and their implications in the first place. People don't have perfect knowledge even before millions of advertising dollars flood the market with misinformation about the options themselves, let alone the implications for same.
If you're truly interested in maintaining the integrity of our democracy and our discourse, it's hard to imagine why you'd be in favor of more unrestricted money. The fact is that vanishingly few people are wealthy enough to participate in this flavor of democracy, let alone make any sense of it.
"Isn't this in itself a repudiation of democracy?"
It's a strange sort of democracy you have here, where some voices are obviously more equal than others.
"This isn't going to be rehashing the Glass-Steagall myth, is it? See, e.g., [1]"
Wow. The future more than a little pwned this guy. What about the billions of dollars BoA and JP Morgan took from the gov't? How about WaMu? And in what universe CDOs, et al, not risky investments?
My understanding about Glass-Steagall isn't so much that it directly led to the crisis, although for all I know maybe there's some intricacy there that I'm missing. Rather it allowed banks to use depositors' money to play Wall Street, and during the financial/housing bubble over the last decade or so, this meant you could become fantastically rich. So you make money, you buy up other banks, and you become progressively closer to "too big to fail."
AIUI, more and smaller banks -> more resilience, more diffuse risk rather than big, big chunks of concentrated risk in a few, critical places.
It's a strange sort of democracy you have here, where some voices are obviously more equal than others.
My definition of democracy is that everyone gets an equal vote. I don't see where it relates to who can advocate with how loud a voice.
You haven't addressed my question about where, in the spectrum of single speaker to small groups up through corporations, the right to invest money in political speech ought to be curtailed.
So you make money, you buy up other banks, and you become progressively closer to "too big to fail." ... more and smaller banks -> more resilience, more diffuse risk rather than big, big chunks of concentrated risk
I appreciate your reply here. It's thoughtful, and you're the first one I've encountered that has actually tried to put some meat behind the standard talking point. So in my book, you've got an upvote for engaging in a principled debate, even if I disagree with you.
The thing is, G-S did not prevent banks from becoming too big to fail. It prevented them from diversifying. So if G-S were still in place, there's no reason to believe that the banks would have been any smaller. It just would have ensured that the banks didn't have sufficient diversifying to ride out any problems. If you look at my citation above, you'll see that this is exactly what happened. There were giant non-diversified banks that were failing, while those that did diversify, thanks to Gramm-Leach-Bliley, were able to weather the storm.
> My definition of democracy is that everyone gets an equal vote.
So how does it come about that you interpret support for restrictions on political campaigning as an attack on democracy? You can't have it both ways: either democracy is just about giving everyone one vote, in which case nothing wpietri [EDITED to add: or wonderzombie] said can possibly be taken to be at all opposed to it; or it's concerned more broadly with enabling and/or trusting people to vote rationally in the light of the best available information, in which case it's obviously not undemocratic (though it might turn out to be wrong) to want to regulate possible sources of misinformation.
> You haven't addressed my question about where [...] the right to invest money in political speech ought to be curtailed.
Your implicit argument seems to be this: If you can't point to an obviously correct place to draw the line, then no line should be drawn anywhere. I think this argument is hopelessly wrong; there are thousands of cases where you have a continuum with something obviously reasonable at one end, something obviously unacceptable at another, and no obviously correct place to draw a line.
However, here is one proposal that seems reasonable to me: Individuals and corporations can both invest money in political speech, but the amount any individual or any individual corporation is allowed to put in is limited to (some credible estimate of) the largest amount a not-entirely-crazy person on a roughly-median income would be prepared to put in. (The problem with letting corporations run political advertisements isn't that there's something especially evil about corporations; it's that corporations have a colossal amount of money and a great deal to gain or lose from political outcomes, and that their interests are not obviously well aligned with those of the general public. If IBM or General Motors or ExxonMobil can only spend $5k/year on politics, they can't do much harm.)
I would put the limitations in the other direction; in fact, I would say that one reasonably obvious place to draw the line is that in order to contribute money to a political campaign, you have to be a registered voter. That would immediately shut down corporate contributions completely. If a group of individuals all want to contribute to the same politician's campaign, great! They can each make their individual contributions. But it seems to me that the biggest source of corruption in the whole process is the idea that any entities other than individual voters can be part of the process. Government is supposed to represent actual human beings, not legal fictions.
So how does it come about that you interpret support for restrictions on political campaigning as an attack on democracy?
If you believe that the additional political speech that greater donations would allow, would break the democratic process, then you have little faith in the ability of voters to weigh the facts and cast a rational vote. If you don't think that voters can do this, then it seems to me that you don't believe that democracy can really work.
I'm not saying that the people who want to limit political contributions are opposed to democracy. I'm saying that it reveals that they have little confidence that democracy can work.
Your implicit argument seems to be this: If you can't point to an obviously correct place to draw the line, then no line should be drawn anywhere.
No. I'm saying that for such restrictions to be implementable, there must be a line defined somewhere. If you want to make a rule, you've got to add something to it that still allows me, or me and my buddies, or whatever, to still make political contributions.
Secondarily, I'm hoping that expressing that distinction might reveal more about what these people are trying to accomplish (or not accomplish, as the case might be). Sort of a black box test.
Individuals and corporations can both invest money in political speech, but the amount any individual or any individual corporation is allowed to put in is limited to (some credible estimate of) the largest amount a not-entirely-crazy person
So you're prohibiting me from pooling money with friends in order to send a message of our own. Is that your intent?
(Please note that there are several different people in this discussion. My opinion is not necessarily the same as wpietri's or wonderzombie's.)
I think that how well democracy works depends on all kinds of things. How well informed voters are is certainly one of them. Voters, being human beings, are demonstrably vulnerable to misinformation. Therefore, it is possible that taking measures to reduce misinformation may make democracy work better.
And I am entirely at a loss to see how anyone can seriously regard this sort of position as not believing that democracy can "really work", whatever the hell that's meant to mean.
> for such restrictions to be implementable, there must be a line defined somewhere.
For sure. But how do you get from there to suggesting that anyone who thinks there should be some limits is somehow obliged to have a specific place where they think the line needs to go, still less obliged to tell you where that place is?
> might reveal more about what these people are trying to accomplish (or not accomplish, as the case might be).
Jiminy.
> you're prohibiting me from pooling money with friends in order to send a message of our own.
I'm not prohibiting anything, and the proposal I made would obviously not have the effect you describe -- and this sort of rhetoric is one reason why I don't in the least blame anyone who declines to answer your tell-me-where-the-line-goes demands.
However: my suggestion is that you and your friends are welcome to send your money wherever you want, but that any single legal entity acting as a single entity only gets to play with as much money as a typical person could afford to use for influencing the political process.
The sort of corporate activity that some people worry about is not remotely like you and your friends pooling some money.
> I'm not saying that the people who want to limit political contributions are opposed to democracy. I'm saying that it reveals that they have little confidence that democracy can work.
Nicely put!
Just going to point out that a corporation isn't just a "large group" - it is a government-created entity that enjoys vastly reduced liability for individual members of that group.
I'm sure you don't object to my right to contribute to a
campaign
Why are you sure of this? How do you know wpietri doesn't support publicly-funded campaigns? Your short post sure does contain a lot of assumptions.
And what's with the link to a citation-free Heritage blog post that, not surprisingly, begins with, "It has become an article of faith on the left [...]"? Next time, please link to an informative paper published by an organization like the AEA. Thanks.
Your apparent theory that too-big-to-fail corporations should be allowed to play heads-I-win-tails-you-lose with taxpayer money (and then buy politicians with the winnings) is comical.
Isn't this in itself a repudiation of democracy?
No, it's honoring the practical core and the historical roots of it.
If you're worried about a candidate advertising a lot, that's pretty much a vote of no-confidence in your fellow Americans' ability to weigh options and vote rationally.
If you actually believe that advertisements are about delivering information to inform a rational decision-making process, I can't help you.
tell me where the line should be drawn?
Personally, I'm for public funding of elections based on achieved milestones. With pretty modest amounts of funding. Forcing information on people made sense when information was scarce and difficult to get. Any voter with an internet connection can be as informed as they want to be today. Anybody who has an opinion can publish it with worldwide reach.
why can't my incorporated flying club make a contribution?
Maybe because the end of your slippery slope is oligarchy and/or crony capitalism masquerading as representative government?
Your apparent theory that too-big-to-fail corporations should be allowed to play heads-I-win-tails-you-lose with taxpayer money
I don't recall advocating that those corporations should have been bailed out. Indeed, I believe just the opposite. The market was malfunctioning back in '07, but the way to solve that problem isn't by rewarding those doing it. The correct fix, painful as it might be, is to allow it fail.
Maybe because the end of your slippery slope is oligarchy and/or crony capitalism masquerading as representative government?
Perhaps my previous statement clarifies that I'm not a supporter of corporatism at all. I'm opposed to the government grabbing additional powers. That's it.
Ok, corporate donations are not linked to what everyone inside a corporation decides but rather a small set of people whose interest don't necessarily align with the shareholders or the workers at large. Handing disproportionate power to middlemen breeds corruption without the counterbalance of risking large personal fortunes or publicity.
This same argument also disproves the idea of giving personal tax breaks on large incomes as apposed to corporate tax breaks for small businesses. AKA middle management don't create jobs so tax breaks targeting 'job creators' that include them are misnamed.
Edit: The above is a position piece just like those people at the Heritage Foundation are paid to create. There is nothing wrong with suggesting you find credible sources that are not simply spouting propaganda.
"Consider the source" is a perfectly valid heuristic for credibility, which is necessary when counterarguing major political topics like those surrounding Glass-Steagall/Graham-Leach-Bliley. Is HF the most credible source for GP's argument? If so, then that is part of the story.
I didn't provide anything deeper because this has been rehashed many times, and those claiming that G-S is what allowed the crisis have never offered anything of substance in those previous discussions.
But if you insist on more meat, consider (from the original citation [1]):
the evidence so far shows that Gramm-Leach-Bliley has helped soften the blow to taxpayers by allowing commercial banks to take over trouble investment firms. Just look at which organization’s have failed:
Bear Stearns was an investment bank before it was sold to JP Morgan Chase (which includes a commercial bank).
Fannie Mae were Freddie Mac were government sponsored entities before the government bought them.
Lehman Brothers was an investment bank before it want bankrupt.
Merrill Lynch was an investment bank befor it was sold to Bank of America (which is a commercial bank).
AIG is an insurance company with no commercial banking division.
Remember, Glass-Steagal was passed to protect commercial banks from failure by forbidding them from investment bank practices like trading in securities and underwriting stocks and bonds. As you can see above non of the failed institutions are commercial banks that got in trouble through risky investment banking. Instead, it is the commercial banks that are providing some stability to the system by purchasing troubled investment banks. Without Gramm-Leach-Bliley they would not even be allowed to technically do this.
Or from a respected economist:
Many wise people are now recognizing that the repeal of Glass-Steagall was one of the few saving graces of the current crisis. [2]
Most of all, the Act enabled financial diversification and thus it paved the way for a number of mergers. Citigroup became what it is today, for instance, because of the Act. Add Shearson and Primerica to the list. So far in the crisis times the diversification has done considerably more good than harm. Most importantly, GLB made it possible for JP Morgan to buy Bear Stearns and for Bank of America to buy Merrill Lynch. It’s why Wachovia can consider a bid for Morgan Stanley. Wince all you want, but the reality is that we all owe a big thanks to Phil Gramm and others for pushing this legislation. Brad DeLong recognizes this and hail to him. Megan McArdle also exonerates the repeal of Glass-Steagall. [3]
If you have more money in the bank than you have more freedom than someone else because you may be able to stay on your soap box for days on end while said someone else would have to go to work everyday or do other things in order to earn enough money to survive. Merely having more money will buy you more freedom. What solution to you propose to this people-with-more-money-can-influence-others-more problem? Does it matter whether a corporation's internal marketing designs an ad to support their candidate of choice instead of making a donation to their candidate's campaign?
Or could it be that it's exactly this sort of reflexive government-bashing that makes it easy for the general public to elect fools and charlatans? After all, if government is the problem, why would people bother electing representatives who take governing seriously? Heck of a job, Brownie.
The current form of government allows people to elect charlatans and fools. That's not because the population is stupid. On the contrary, a democratic system required the population to be unusually educated & informed, while always deciding to vote in our long-term interest. In other words, the democratic system requires the impossible.
Our civilization relies on extreme specialization and deep division of labor, not that everyone knows everything.
Regardless, I think your thesis is false. A lot of the powers we've taken away from government lately (regulation of financial services, regulation of financial markets, regulation of campaign contributions) have made us worse off, and specifically have made it easier for RIAA to buy legislation like this.
Regulatory capture means that regulatory framework aren't necessary free of corruption. It just means we ought to be smarter how we devise regulations or lack thereof, as sometime doing nothing is better than corporations gaining control of the law.
If anything, the government are in bed with the bankers.
The current form of government allows people to elect charlatans and fools. That's not because the population is stupid. On the contrary, a democratic system required the population to be unusually educated & informed, while always deciding to vote in our long-term interest. In other words, the democratic system requires the impossible.
So you would rather live under an absolute monarchy? An enlightened dictatorship? Oligarchy? Theocracy? Which form of government, extant or extinct, would you prefer over the western democratic republic?
We were supposed to have one of those, but the Constitutional limitations seem to have atrophied. See, for example, the overuse of the "Interstate Commerce Clause"; the rotting of the 10th Amendment; Kelo, Raich, and so forth...
As long as we're fantasizing, why limit to extant or extinct governments? Do you think a clean slate government design wouldn't be a huge improvement over any government ever present in the world?
Your parent post is absolutely correct about the major flaw in a democracy, and despite your insinuation, this is not, I believe, an unfixable problem.
>Do you think a clean slate government design wouldn't be a huge improvement over any government ever present in the world?
The problem with every "clean slate" redesign I've ever seen is that it runs into bootstrapping issues. If bootstrapping a new form of government was so obvious or easy, it'd have been done by now.
By "bootstrapping issues" you mean that the people in power aren't in a hurry to give it up, right? Obviously they're not and that's why I used the term "fantasizing". :)
The real problem is the government is afraid to police the markets like they police the people. There are all sorts of things that are legal for people to do absent the harm of others. However, when you throw in harm to others in there, you may become criminally liable for your otherwise legal actions - I'm speaking of negligence. This is what's missing. Without this concept, the government will always be several steps behind the market "innovators".
The authority we grant to the government to make laws that regulate financial markets, currencies, and (you wish) campaign contributions gives them the authority to make bullshit laws sponsored by the RIAA. A public that isn't engaged with the political process because our central bureaucracy is to distant to interact with personally: THAT'S why we have this trash happening today.
Glass-Steagal would only be good because it keeps FDIC-insured money from being used for gambling, which is what securities trading is. One could argue we don't need FDIC insurance, and in fact, we shouldn't have regulation and monopoly of currency by the government.
As far as campaign contribution regulation, it's a violation of free speech to tell me how I can spend my money to talk. I can go on if you really care to know how CFR is a bad idea.
I want this country to "not suck" and respect the freedoms of its citizens. Several simple, yet fundamental things need to change:
-Repeal the 17th amendment
-Our voting system for the legislature
-The scope of federal government needs drastically reduced.
Regardless, I think your thesis is false. A lot of the powers we've taken away from government lately (regulation of financial services, regulation of financial markets, regulation of campaign contributions) have made us worse off, and specifically have made it easier for RIAA to buy legislation like this.