Several weeks ago, I posted an article entitled “Corporate Contributions vs. Human Rights.” In that post, I made the argument that corporate influence over the political process in America infringed on our human rights. In this post, I want to revisit this discussion as the crisis in the financial markets makes this argument even more poignant.
As we watch the events unfold on Wall Street and in Washington DC, we have to wonder how this could happen and how our leaders can boldly hand over our tax dollars to investment banks and mortgage lenders in order to bail out their follies. I don’t want to oversimplify this situation but I think it is important to expose one factor in this process that has contributed to and will continue to contribute to the massive bailout of the financial industry.
Politics.
Specifically, I think it is useful to look at the campaign contributions made by corporations through various means to politicians in Washington and the lobbying undertaken by these companies and their surrogates to influence the political process and the outcomes that are playing out in the capital markets today.
At the onset, I am not advocating the banning of corporate lobbying or some sort of criminalization of corporate contributions to politicians. However, I do believe that much greater transparency must be introduced into the system and a greater reduction in the asymmetric system of lobbying and political influence rendered by corporate America to the detriment of all Americans.
The question plaguing many Americans is how this massive financial crisis could have happened. Certainly, the unfettered deregulation inflicted upon us by the Bush Administration and a complacent Congress has contributed to this mess. So too has the short term thinking of corporate executives seeking to maximize shareholder return at any cost. But how was all of this pulled off and why wasn’t anybody speaking out against the obvious risks that we are all experiencing today as a result of these many actions?
I think this can be explained, in part, by the system in Washington in which professional lobbyists in various regulated industries work with Congress to effect change. While the intimate details of how a particular lobbyist influenced a particular congressman or senator is difficult to uncover, there is a trail that is left by the participants and can help to reveal the inner workings of the legislative process. This trail consists of the various disclosures required by the federal election laws.
Over the next few days, I will be posting articles in which I will share with you specifics about the now infamous companies in the financial services industry who have benefitted from influence in Washington. I invite all of your comments as well as suggestions on other companies and industries what we can profile.
It’s also due to a new form of trading – derivatives, and the poor control exerted on this.
Not just politics but also the financial system.