Corporate Money on the Democrats

Do you hate and/or fear the authoritarian, regressive, intolerant, messianic, militarist Republican Party? Would you like to see that terrible political organization swept into the dustbin of history? Do you want to see Republicans resoundingly defeated to clear the way for the passage of decent and progressive policy like a significantly increased minimum wage, universal health care, enhanced union organizing rights, the rollback of George W. Bush’s tax cuts for the wealthy few, improved environmental protections, enhanced (and restored) civil liberties, and the like? 

You have good reason to answer in the affirmative to all of these questions. As Noam Chomsky noted in late October 2004: “The urgent task for those who want to shift policy in a progressive direction—often in close conformity to majority opinion—is to grow and become strong enough so that they can’t be ignored by centers of power. Forces for change that have come from the grassroots and shaken the society to its core include the labor movement, the civil rights movement, the peace movement, the women’s movement, and others, cultivated by steady, dedicated work at all levels, every day, not just every four years. But we can’t ignore the elections. We should recognize that one of the two groups now contending for power happens to be extremist and dangerous and had already caused plenty of trouble and could cause plenty more” (Interventions, 2007). 

Chomsky’s admonition holds up four years later. The Republicans continue to be “extremist and dangerous” at home and abroad. The GOP is running for office on the bases of fear (of false and self-created “national security” threats), chauvinism (towards blacks and immigrants at home and others abroad), and deception. It is continuing the dreadful Reagan tradition of pushing global and domestic panic buttons to justify and cover their embrace of a murderous, imperialist foreign policy. They are fanning the flames of nationalist and xenophobic hostility toward stateless Latino/a migrants and continuing their party’s long record of bashing gays, feminists, and non-whites in general. They are advancing blatant falsehoods about their “opposition party’s” policy agenda, absurdly accusing the Democrats of supporting (the supposed hideous evil of) “socialized medicine.” They are continuing their party’s custom of painting their militantly plutocratic and business-friendly policy goals as the politics of the “little guy” and the middle and working classes. 

If your answers to the queries posed at the beginning of this article are “yes,” then I’ve got some good and bad news for you. The good news first: big business, whose outsized campaign donations and other related forms of political support are essential to electoral success in America’s “dollar democracy,” is investing more in the Democrats than in its usual favorites, the Republicans. As liberal New York Times columnist Paul Krugman noted last October, citing data from the Center for Responsive Politics, “In the current election cycle every one of the top ten industries making political donations is giving more money to the Democrats. Even industries that have in the past been overwhelmingly Republican, like insurance and pharmaceuticals, are now splitting their donations more or less evenly. Oil and gas is the only major industry that the GOP can still call its own” (Krugman, “Death of the Machine,” New York Times, October 19, 2007). 

Democrats are currently receiving more than Republicans from: 

• securities and investment firms (61 percent Democratic to 39 percent Republican in the 2008 election cycle) for only the second time in the last 7 election cycles 
• commercial banks (52 percent Democratic) for the first time in the last 9 cycles 
• insurance companies (51 percent Democratic) for the first time in 9 cycles 
• “defense” (military-industrial) companies (52 percent Democratic) for the first time in 9 cycles 

The Democrats are even with the Republicans in donations from drug companies who have favored Republicans for each of the last eight cycles (Center for Responsive Politics, “Open Secrets,” www.opensecrets.org). 

Now for the bad news: big business, whose outsized campaign donations and related forms of political support are essential to electoral success in America’s “dollar democracy,” is investing more in the Democrats than in its usual favorites the Republicans. 

Since candidates who raise the most money typically win elections under the openly plutocratic United States electoral system (the “best democracy that money can buy”), the Democrats’ new corporate funding advantage seems to strongly increase their chances of taking the White House and broadening their majorities in the House and Senate in 2008. But what types of Democrats and what sort of Democratic policy agenda does the increased corporate backing favor? Wall Street and K Street’s big political donors do not play the money-politics game to advance the interrelated causes of peace, justice, social health, ecological sustainability, and democracy at home and abroad. They don’t fund campaigns, parties, and candidates out of any special attachment to the Democratic Party’s purported mission of representing the working class majority against the nation’s economic elite. 

No, they devote big dollars to the political process with an eye to creating policy outcomes that work to their economic advantage and advance the upward distribution of wealth and power. That is why big business political donors often give money to both sides in key elections. It’s also why incumbent officeholders tend to dramatically out-fundraise challengers: as only current policymakers are in a position to immediately reward capitalist political investors with such benefits as public subsidies, contracts, regulatory changes, tax cuts, and the like. 

A Seat At The Table 

Why has the “health care [business] sector” given $1.7 million more dollars to Democrats than to Republicans in the current election cycle? As the New York Times noted last October, this recent shift in corporate political “giving” (Bush had out-raised his Democratic contenders by $1 million from the “health sector” at the current point in the 2004 cycle) “reflects a growing sense that the Democrats are in a strong position to win the White House next year. It also underscores the industry’s frantic effort to influence the candidates, as Democrats push their proposals to address what many polls show is a top concern among voters” (Raymond Hernandez and Robert Pear, “Health Sector Puts Its Money on the Democrats,” New York Times, October 29, 2007). 

Health care reform is taking on the aura of inevitability and big corporate care players want to exercise as much influence as they can over the probably Democrat-led policy process. As Times reporters Hernandez and Pear observe, the health industry’s contributions to Democrats are (what insurance company strategist Phillip J. Blando calls) “a defensive measure” expressing corporations’ desire for “access, a seat at the table” in shaping “health care reform.”  

As the Times failed to mention, corporate America has already shaped the Democratic health-care policy debate by keeping the popular health insurance solution—single- payer (on the Canadian and U.S. Medicare model)—off “the table.” Except for Dennis Kucinich and Mike Gravel—marginalized under the rules of U.S. market democracy—all of the Democratic presidential candidates propose to leave the leading private insurance companies as parasitic, persistently profitable business. 

That great corporate policy victory notwithstanding, however, the leading insurance and drug companies still think they have much to worry about in the escalated health-care policy “debate” that is certain to emerge. Big Insurance has concerns about Democrats’ proposals to ban pre-existing conditions and to prevent insurance providers from “cherry-picking” only healthy customers. It wants to limit the collective bargaining power that the Democrats’ proposed “Regional Health Care Markets” (which includes a small single-payer option) will allow “health-care consumers” to exercise in setting premiums and other costs. It does not enjoy hearing top Democrats talking about limiting the profits of the insurance industry (broached by Obama) and dislikes the Democratic candidates’ persistent denunciation of insurance companies for denying coverage and charging exorbitant prices to sick people. 

For its part, Big Pharma is concerned about the Democrats’ pledge to permit importation of lower-cost Canadian pharmaceuticals and to let Medicare negotiate directly with pharmaceutical companies to obtain lower drug prices.  

Hillary And Obama Get The Health-Care Money 

Corporate money is naturally not bestowed equally and without ideological selectivity across the field of Democratic candidates. It’s not only because his national polling numbers are below Hillary Clinton’s (who gets 1 in every 4 campaign dollars from the health-care industry) and Barack Obama’s (who gets 1 in 5 of the industry’s donation dollars) that John Edwards (1 in 20 health-care dollars) is less supported by the health-care sector than the two Democratic front-runners. It’s also because Edwards has consistently criticized his “corporate Democratic” rivals for giving giant insurance and drug companies “a seat at the table” and for preparing to “negotiate and promise [their] way to universal health care.” He claims to believe that granting the big corporate players a role in shaping and passing health care reform dooms the process and that the only way to win meaningful change is to “fight and beat the special corporate interests again and again.” (If that’s really his attitude, left progressives might well ask, then why doesn’t he advance the obvious, popular, and social-democratic solution—single-payer?) Along with his “populist” tendency to highlight themes of economic inequality, poverty, and undue corporate influence on what he calls “the broken game” of U.S. policy and politics, such rhetoric makes the former corporation-beating trial lawyer Edwards seem like something of a wild card to big corporate political financiers within and beyond the health-care sector. 

The insurance industry certainly sees Edwards as the most likely of the leading Democratic candidates to move towards single-payer—a policy he has at least once (at an AFL-CIO Health Care summit last spring in Las Vegas) partially praised—if he attained the presidency. “Over time,” Edwards promotional literature in Iowa says, his health care plan “could evolve into a single-payer approach.” The “ultimate [corporate] insider” Hillary Clinton (a former corporate lawyer who represented large corporations against the medical claims of injured workers and consumers) and the business-accommodating Barack Obama strike corporate “election investors” as better bets to follow the usual Democratic practice of tempering populace-pleasing campaign bluster with “proper,” “real- world” deference to existing social and political hierarchies and priorities. 

Expect An Increase In The Use Of Military Force 

Especially troubling (for peace and justice progressives) in light of the Democratic Party’s graphic failure to act on the popular antiwar sentiment they rode to Congressional majorities last November, the Democrats are now receiving more money than the Republicans from the “defense” (military-industrial) complex for only the third time in the last fifteen election cycles. As Michael Klare noted in the liberal journal the Nation last November: “The use of military force to protect the flow of imported petroleum has generally enjoyed broad bipartisan support in Washington…. One might imagine that the current debacle in Iraq would shake this consensus, but there is no evidence that this is so. In fact, the opposite appears to be the case: possibly fearful that the chaos in Iraq will spread to other countries in the Gulf region, senior figures in both parties are calling for a reinvigorated U.S. military role in the protection of foreign energy deliveries... 

“In March, for example, Senator Hillary Clinton told the New York Times that Iraq is ‘right in the heart of the oil region’ and so ‘it is directly in opposition to our interests’ for it to become a failed state or a pawn of Iran. This means, she continued, that it will be necessary to keep some U.S. troops in Iraq indefinitely, to provide logistical and training support to the Iraqi military. Senator Barack Obama has also spoken of the need to maintain a robust U.S. military presence in Iraq and the surrounding area. Thus, while calling for the withdrawal of most U.S. combat brigades from Iraq proper, he has championed an ‘over-the-horizon force that could prevent chaos in the wider region.’ 

“Given this perspective, it is very hard for mainstream Democrats to challenge Bush when he says that an ‘enduring’ U.S. military presence is needed in Iraq or to change the Administration’s current policy, barring a major military setback or some other unforeseen event. By the same token, it will be hard for the Democrats to avert a U.S. attack on Iran if this can be portrayed as a necessary move to prevent Tehran from threatening the long-term safety of Persian Gulf oil supplies. 

“Nor can we anticipate a dramatic change in U.S. policy in the Gulf region from the next administration, whether Democratic or Republican. If anything, we should expect an increase in the use of military force to protect the overseas flow of oil, as the threat level rises along with the need for new investment to avert even further reductions in global supplies” (Michael Klare, “Beyond the Age of Petroleum,” the Nation, November 12, 2007). 

Along with “strategic” oil and related bipartisan doctrinal and geopolitical considerations that predispose the Democrats (Edwards included) to adopt a heavily armed and imperial foreign policy towards the Middle East and the broader world, the increased influx of “defense” (imperial-“offense”) dollars to the Democrats encourages the likelihood that a Democratic White House and Congress would “increase…the use of force to protect”—a better word would be control—“the overseas flow of oil.” For what it’s worth, the “smart money” Democratic presidential favorite—the one that corporate America is betting on most heavily—is receiving the most political money by far from both the “defense” and the “energy” sectors: Hillary Clinton has received $123,000 so far in the 2008 cycle from “defense” and more than half a million dollars ($568,000) from “energy and natural resources.” Obama comes in second with $58,000 from “defense” and $437,000 from “energy.” Edwards (who has been considerably more strident than Clinton and Obama in his criticism of the Iraq occupation and planned U.S. actions against Iran) has gotten $22,000 from “defense” and $62,000 from “energy.” 

Betting On Elections vs. Betting On Policy 

Interestingly enough, the leading presidential recipient of the Democrats’ new corporate fundraising advantages is not the candidate most likely to defeat the Republicans in November 2008. Numerous Iowa Republicans have told me that Edwards is the Democratic presidential candidate they least want their party to face in the general election. 

Their judgment is supported in survey data. Thanks to his rural, small-town, and working-class upbringing, Edwards plays especially well with working families in all parts of the country, including “red states.” (It doesn’t hurt his nationwide electability, sadly, that he’s white, male, and southern.) Polling data consistently show that he is the Democrat with the best chance to beat any Republican candidate in the general election. The weekly match-up polls produced by the highly regarded “Rasmussen Reports” have shown Edwards defeating the most likely Republican opponents—Guliani, Romney, and Thompson—by consistently larger margins that Clinton II or Obama. Edwards is the strongest Democrat against Republicans in key battleground states including Iowa, Wisconsin, and Ohio. He brings new (“red”) states into play in a general election. He taps especially well into the “blue grit” “fair trade populism” and rank-and file rejection of negative (corporate) globalization that joined anti-war-sentiment in underpinning the Democrats’ defeat of the Republicans in the 2006 Congressional elections (see Laura Flanders, Blue Grit: Democrats Take Back Politics From the Politicians, 2007). 

Nonetheless the top Democratic recipient of corporate campaign largesse is Hillary Clinton, whose remarkably high “negatives”—more than 50 percent of Americans polled consistently say they would never vote for her—make her a highly problematic choice for the party’s nomination. The candidate next most favored by big business election investors is her fellow corporate-centrist Obama. Both Clinton and Obama have set new corporate fundraising and campaign spending records while the “populist” Edwards has turned to the federal public election financing system, which will cap his spending.

Corporate campaign finance isn’t a trip to the electoral racetrack; it’s an investment in pursuit of government return. Its managers seek policy victories and outcomes for concentrated economic power centers (leading corporations and investment houses) and are not likely to support a good election bet that might be a bad policy bet. While Dennis Kucinich is the closest thing to a genuinely Left candidate in the Democratic primaries, even Edwards is running “too left” for the U.S. plutocracy. 

Edwards’s “working class hero” campaign has given corporate America reasons to think he would be considerably harder to control than Clinton and Obama —and more likely to encourage popular challenge to corporate rule. As a logical result under the rules of American “market democracy”—wherein “the public participates only indirectly in choosing their leaders, and their choices are restricted to the set approved by the monied elite” (Herman, 2007)—leading “election investors” are ready to overlook or discount indications that Edwards is the most electable of the Democrats’ top presidential hopefuls. If Edwards were somehow able to overcome big money’s preference for the junior Senators from New York and Illinois—an Edwards victory in Iowa is entirely possible thanks in part to the role of that state’s early caucus system in diluting the power of money alone—and move ahead of the Democratic pack, we would certainly expect him to draw an increased share of corporate money seeking among other things to reduce the role of “improper” “populist” ideas by his campaign. Never mind that those ideas are very popular with the working-class majority. 

For these and other reasons, we should be careful about buying the assumptions that plugging into big corporate money is the way to beat Republicans and that the Democrats’ new corporate fundraising advantage guarantees Democratic Party success at the polls in 2008. Corporate America’s primary concern with policy outcomes, not just election results, may well dampen the Democrats’ campaign chances during the current quadrennial, corporate-crafted election extravaganza. We should not be too shocked to witness a depressingly close and business-friendly election—the “smart money” says Hillary v. Rudy—next November. 

Z 

Paul Street is a writer and activist based in Iowa and Illinois. He is author of Empire and Inequality: America and the World Since 9/11 (Paradigm); Racial Oppression in the Global Metropolis (Rowman & Littlefield); and Segregated Schools: Educational Apartheid in Post-Civil Rights America (Routledge).