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ECONOMIC SCENE: US is slipping toward plutocracy

A look at the influence of money on US politics.

By David R. FrancisStaff Writer / August 25, 2009

Then-Republican presidential hopeful John McCain's chartered jet landed in San Diego, Calif., in August of 2008 as the candidate was en route to a campaign fundraiser. Both Sen. McCain and President Barack Obama raised more than $1 billion during their campaigns – which could be a sign that money is playing an increasing role in politics.

Zuma / Newscom

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For $23.95 you can buy a T-shirt for your favorite youngster with the words “Future Lobbyist” printed on the chest. It’s cute, perhaps. It also serves as a rueful commentary on the state of American democracy.

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Is the “Land of the Free” becoming the Land of the Moneyed, a plutocracy where the rich and powerful have disproportionate political influence? Consider:

•Last year a record $3.3 billion was spent on lobbyists, roughly twice the 2001 amount. This year, despite the worst recession since the ’30s, the total is on track to reach a new high.

•The 2008 presidential candidates raised more than $1 billion for the first time.

•In a 2007 global survey of anticorruption measures, the US ranked high in almost all categories except reining in the influence of money on politics. There it rated a special negative mention along with Canada, Bulgaria, and Latvia. (The index, by Global Integrity, measures the safeguards in place, not how often or effectively they’re used.)

“There is certainly an overwhelming influence of money and corporate power” in the US, says Gar Alperovitz, a professor of political economy at the University of Maryland in College Park.

The latest example is healthcare reform. In the second quarter of 2009, the health industry (pharmaceuticals, health products, doctors, insurance, hospitals, and nursing homes) spent $133 million on lobbyists, reckons the Center for Responsive Politics in Washington.

That doesn’t count lobbying by numerous associations. The US Chamber of Commerce alone spent $26 million on lobbying in the first half of this year, “a good chunk” on the health issue, says Dave Levinthal, spokesman for the center. Earlier this month, the Campaign Media Analysis Group reported $52 million has been spent this year on broadcast ads, pro and con, related to reform.

Polls indicate the public wants healthcare reform and a public-insurance option. So the health-insurance industry is pretending to be in favor of reform while trying to kill it through campaign contributions, ads, and lobbying, says Wendell Potter, who until recently headed corporate communications at CIGNA, a major health-insurance company.

Some 350 health-industry lobbyists, many of them former members of Congress or their staff, are swarming Capitol Hill, he says. The industry uses “deception, disinformation, outright lies, and fear mongering” to peel away reform’s supporters.

The industry’s “mission No. 1” is to block any public-insurance option that would compete with private insurance. After a decade of mergers and acquisitions, the health-insurance industry is now “a very large cartel,” he says.

Many nations don’t want to shed light on the hidden influence of wealth. “No other governance reform seems to create greater problems for the vast majority of countries,” Global Integrity said in its 2008 survey of 92 nations.

Is the influence of money on US politics outsized? In other industrial nations, political campaigns tend to be shorter, and usually their financing is regulated in various ways.

Moreover, says Mr. Alperovitz, trade unions provide some balance of power to the might of business and wealth. In Sweden, 85 percent of the labor force is organized; in other major nations 35-40 percent. That compares with 7.4 percent of workers in the private sector in the US.

The US is slipping toward plutocracy because of rising inequality of income and wealth, warns Greg Palast, author of “The Best Democracy Money Can Buy.” Business buys Republicans and rents Democrats on each major issue, he adds.