David Brodwin: The business case for fair elections
This year, the United States Supreme Court reversed years of precedent limiting how corporations may spend money to influence elections. This decision will substantially increase the importance of corporate influence in politics—both in determining who gets elected and how they decide once they are in office.
As executives, owners, investors, and business professionals involved in sustainable and socially responsible business, we must ask ourselves: Are we helped by this greater freedom to spend our companies’ money to influence campaigns? Or has the Supreme Court handed out some poisoned candy? Is this new ability to buy political support good for business—or does it set us back in our efforts to do business responsibly and promote a vibrant, just, and sustainable economy?
Despite appearances, the gutting of campaign finance rules is more likely to hurt than to help. The main issue is not whether businesses can or cannot spend their money on elections. The main issue is which particular businesses and industries will dominate the spending, and whether the ideas they will promote are good for our businesses and good for the nation.
Unfortunately, opening the floodgates to corporate spending on elections will make it harder, not easier, for sustainable and socially responsible businesses to get what they need-and harder for America to get what it needs from these businesses.
That’s because the money that will flood the political system will not represent the views of companies in green America. Instead, the money that will flood the system will come from organizations like the U.S. Chamber of Commerce, which is expected to spend more than $200 million this year on lobbying and direct campaign expenditures. This organization and others like it represent companies that don’t value responsible business. Is this the kind of business thinking that we want to dominate our political discourse?
Ask yourself: Which type of business represents the future? Which type of business should speak most loudly in the political debate? We cannot build an economy of the future based on outmoded ideas and values.
As executives, owners, and investors in socially responsible and sustainable businesses, we believe there is a right way and a wrong way to do business. We do not pursue growth at any cost, nor profit without regard to people and planet. We seek economic policies that make it easier and more profitable to do business the right way, and we know that these policies will make it harder and less profitable to do business the wrong way.
Another important business value is transparency. Corporate donations should be fully disclosed. It’s not healthy to force legislators to collect secret donations, for which they then owe secret favors. This “pay to play” system destroys American’s faith in government and can destroy our democracy.
The ranks of sustainable and socially responsible businesses are growing rapidly–but we are still outnumbered by the “business as usual” crowd. Unless we act, corporate money of the wrong kind will swamp campaigns. This money will not represent enlightened business leadership. It will not enhance U.S. competitiveness in the global economy.
Many important initiatives such as reforms that support Main Street over Wall Street, health care and insurance reforms, product safety standards, better public education, and renewable energy advances will all be in jeopardy if we do not improve the election finance system.
So what’s the solution? Congress has introduced the Fair Elections Now Act to neutralize the corrupting influence of special interest donations and make it possible for legislators to focus on the people’s business rather than on fundraising. This bi-partisan measure has been approved in Committee and now awaits passage by the full House of Representatives.
The proposal has been carefully crafted to survive constitutional challenge at the Supreme Court. It does not bar private funding of campaigns, but it provides the option for candidates to run for Congress using a blend of small private donations and limited public funds, including a four-to-one federal match on donations of $100 or less. Candidates could finance a viable campaign based primarily on contributions from their local grassroots base of supporters. Candidates would not need to depend on special interests who expect to obtain influence in exchange for cash.
We can’t build an economy that works if our democracy is broken. Congress needs to pass this vital reform.
Campaign finance reform is a crucial step toward building an economy that supports and rewards responsible and sustainable business. This is essential if we are to create the economy we want and need today, and be proud of what we’re leaving for the generations to come.
David Brodwin is co-founder of the American Sustainable Business Council, a national coalition of business networks that advocates for a vibrant, just and sustainable economy.
Mark Warner: Every Virginian has a stake in Wall Street reforms
Our nation will take an important step forward today to bring greater accountability to Wall Street and provide greater security to folks on Main Street. Every Virginian has a stake in the comprehensive financial reform legislation that becomes law today.
Eighteen months ago, our nation was on the verge of an economic catastrophe. Many families became over-extended and a lot of businesses got overleveraged, triggering a financial storm that also hurt many Virginians who were playing by the rules: retirement savings and college saving funds were devastated, home values plummeted, and many of our small businesses had to close their doors.
But modern new financial rules of the road that become law today will help create a 21st century financial system that works for all Americans – not just the big banks.
More importantly, we have created a framework for economic recovery and growth.
As a new member of the Senate Banking Committee, I was proud to be asked to help lead a bipartisan effort to address how we could better monitor, and disentangle, complex and interconnected financial companies that get themselves into trouble.
I don’t know about you, but I don’t want to hear the words “too big to fail” ever again.
So we have designed several new tools that should allow regulators to recognize when one of these financial firms is on the verge of failure. They will have the ability to impose tough new capital and leverage requirements that actually make it undesirable for any financial firm to get too big.
The legislation creates an “early warning” council of regulators who will be empowered to compare notes and identify and address systemic risks posed by these companies, their products, or their activities before they can threaten the stability of our overall economy.
These financial companies must periodically submit “funeral plans” with a roadmap for their own rapid and orderly shutdown should the company go under.
These new tripwires will allow us to “unwind” these failing corporations through an orderly bankruptcy process, and all of this will occur at the expense of the financial industry – not the American taxpayers.
That means company executives, members of their board and their investors will pay the price for their company’s financial mistakes. These failing companies will be put out-of-business. They will not be propped-up by the taxpayers, like we saw with AIG and CitiGroup.
In addition, these new reforms put an end to many predatory and deceptive lending practices. Every consumer will be empowered by access to clear and concise information they need to make the financial decisions that are right for them.
The bill creates an independent consumer watchdog at the Federal Reserve, with the authority to ensure that consumers get the information they need to shop for mortgages, credit cards, and other financial products. Never again will Virginians be treated unfairly because of the “fine print” or hidden bank fees.
Virginia’s smaller, community-based banks and credit unions – local financial companies who followed the rules and did nothing to trigger the 2008 financial catastrophe — are exempted from many of these new requirements.
We also provide tough new rules for transparency and accountability for the Wall Street credit rating agencies. That means investors and shareholders who want to see their companies grow and prosper will have greater access to more relevant information they need to make responsible financial decisions
The legislation takes responsible steps to stop the Wall Street practice of shopping around for the weakest possible regulatory oversight.
It also eliminates loopholes that allowed risky and abusive practices to go unnoticed and unregulated, including loopholes for over-the-counter derivatives, asset-backed securities, hedge funds and mortgage brokers.
I recognize that simply passing this legislation is only half of the challenge: now these new requirements must be implemented in a responsible and rational way.
The legislation does not address the problems and abuses at the federally supported home loan agencies Fannie Mae and Freddie Mac. After we see more signs of stability in the housing markets, Congress must address those challenges – hopefully next year.
But two years after a financial meltdown, I believe we have acted appropriately to ensure that a similar crisis does not happen again.
We have provided consistent and rational oversight within the financial markets – new rules that will allow our country to compete globally even as we grow our economy locally.
When the American financial system operates on principles of fairness and openness that promote economic growth and stability, we all win.
Mark Warner represents Virginia in the United States Senate.
Frank Knapp Jr.: Restoring balance between Wall Street and Main Street
Column by Frank Knapp Jr.
Submit guest columns: freepress2@ntelos.net
The South Carolina Small Business Chamber of Commerce, the U.S. Women’s Chamber of Commerce and small business organizations and owners across this country want Wall Street Reform. But you wouldn’t know that from the attention the media gives to the U.S. Chamber of Commerce, which is the mouthpiece for the big financial institutions that oppose reform.
The U.S. Chamber purports to represent small businesses. However, the reality is quite different. The July/August edition of the Washington Monthly features an eye-opening story on Tom Donohue, the CEO of the U.S. Chamber, who has a plaque on his desk that reads, “SHOW ME THE MONEY.” In 2008, a third of the Chamber’s revenues came from just 19 big companies. Read more
David Hills and Michael Lent: Financial reform
Column by David Hills and Michael Lent
Submit guest columns: freepress2@ntelos.net
Millions of America’s small business owners suffer from bad practices on Wall Street – something often given short shrift in debate about creation of a consumer financial protection agency. Read more
President Obama remarks on the economy
Speech by President Barack Obama
www.whitehouse.gov
I’ve just finished a candid and productive meeting with the CEOs of 12 of our nation’s largest financial institutions. I asked them to come to Washington today – at the end of this difficult year for their industry, but also for the economy – to discuss where we’ve been, what we expect of them going forward, and how we can work together to accelerate economic recovery.
Our nation’s banks play, and have always played, a crucial role in our national economy – from providing loans for homes and cars and colleges; to supplying the capital that allows entrepreneurs to turn ideas into products and businesses to grow; to helping people save for a rainy day and a secure retirement. So it’s clear that each of us has a stake in ensuring the strength and the vitality of the financial system. Read more
Remarks from Deputy Treasury Secretary on financial services
Thank you, John, for that kind introduction. Good afternoon, everyone, and thanks for the opportunity to be with you today.
This is, I think, a particularly important time for you to be gathering – and a particularly opportune moment for me to talk with you about some of the reforms that the Administration has proposed to strengthen our financial system. Read more
Holly Sklar: Wall Street has already voted
Posted by afp on October 28, 2010 · Leave a Comment
Inequality had increased so much since the 1980s, Citi strategists noted in 2005, that the richest 1 percent of households and the bottom 60 percent had “similar slices of the income pie!” Even better, they said, “the top 1 percent of households account for 40 percent of financial net worth, more than the bottom 95 percent of households put together.” And the Bush “administration’s attempts to change the estate tax code and make permanent dividend tax cuts, plays directly into the hands of the plutonomy.”
In “Revisiting Plutonomy: The Rich Getting Richer,” Citi strategists considered the risk of backlash. “Whilst the rich are getting a greater share of the wealth … political enfranchisement remains as was – one person, one vote,” they said. “At some point it is likely that labor will fight back against the rising profit share of the rich and there will be a political backlash against the rising wealth of the rich.” This could be felt, for example, “through higher taxation (on the rich or indirectly though higher corporate taxes/regulation).”
Fast forward. Wall Street wrecked the economy and was bailed out by the rest of us. “Pay on Wall Street is on pace to break a record high for a second consecutive year,” the Wall Street Journal reports. Main Street, meanwhile, suffers record high foreclosures speeded by robo-signers.
Big businesses have a record amount of nearly $2 trillion in cash and are borrowing money cheap to buy other companies, buy back stock and pay out more dividends. Small businesses can’t get credit to buy more equipment or hire more workers.
According to the latest IRS data, the 400 richest taxpayers increased their average income by 399 percent, adjusted for inflation, between 1992 and 2007, and lowered their effective income tax rate by 37 percent – from 26.4 percent to 16.6 percent.
This year, the Forbes 400 richest Americans, all billionaires, enjoyed an 8 percent rise in their wealth – while more than one out of eight Americans depends on food stamps.
The backlash is here, but it’s lashing in the wrong direction.
The anti-government Tea Party rage plays directly into the hands of the Kings of Wall Street.
Wall Street has already voted, pouring money into Republican campaigns and anti-Democratic ads by astroturf groups that don’t have to disclose their Big Bank, Big Oil, Big Business donors. “Our target ratio for the 2010 cycle is 80-20 Republican,” American Financial Services Association representative Karen Klugh told Politico.
Wall Street expects a good return on their investment. “Wall Street is preparing for a Republican surge in Congress that could help it block proposed taxes on banks and investments, blunt new financial regulations and regain some of the lobbying firepower it lost during the financial crisis,” Bloomberg reports. “Banks would prefer to have Republicans overseeing the regulators, lobbyists said.”
Wall Street wants freedom to gamble with our money – including the Social Security funds Republicans want to try again to privatize.
“The Republican agenda could also give new life to free-trade agreements with Colombia, Panama and South Korea,” Bloomberg reports. That’s good news for the plutocrats. As Citigroup said in 2005, “Globalization is making it easier for companies to either outsource manufacturing (source from cheap emerging markets like China and India) or ‘offshore’ manufacturing (move production to lower cost countries).”
Average wages are 7 percent lower today, adjusted for inflation, than they were back in 1973. Do you want to go lower?
The richest 1 percent has more wealth than the bottom 95 percent combined, but just 1 percent of the vote.
Wall Street plundered your livelihoods, homes and retirement funds – and now they want you to bail them out, again, with your vote.
They want to sell you bait-and-switch candidates like they sold you bait-and-switch mortgages. And laugh all the way to the bank.
Wall Street has voted. It’s your turn.
Filed under Blogs · Tagged with 2010 elections, wall street