Wall Street makes a lot of investments – not in businesses or stocks, but in the American political process.
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Wall Street makes a lot of investments – not in businesses or stocks, but in the American political process. At nearly $ 3 billion, the financial sector spent record amounts on campaign and lobbying contributions during the 2019-2020 election cycle.
Wall Street has a purpose: to increase profits. By using wealth as leverage, Wall Street has tremendous power in electoral and ethical processes, to the detriment of ordinary people and democracy in America. Part of the answer to this problem is to expect the law to live up to the laws that support our self -governance.
Financial sector policy spending jumped 50% between the 2015-2016 and 2019-2020 election cycles, ending with $ 2.9 billion spent last year, accordingly report from the Americans for Financial Formation. Wall Street’s highest spending spender, Blackstone CEO Steven Schwarzman, spends more than $ 33 million alone among those who contributed to the campaign in the previous election cycle.
With individual donations and contributions to the PAC, corporations and Wall Street donated to gain influence. It is also the industry’s third highest cost of lobbying activities, with nearly $ 1 billion in lobbying in 2019-2020.
Wall Street’s spending policy focuses on the urgency to pass the “For the People Act,” legislation that would reduce Wall Street’s holdings by matching donations up to $ 200 at a 6: 1 rate with funds in public and for party committees to open small dollar donation accounts with few restrictions. It also adds to the restrictions on large PACs, such as those used by tacoons in the financial sector. By empowering small dollar donors and raising billionaires, we can reduce Wall Street’s political influence.
For Wall Street, spending a lot of money on lobbying and campaign contributions is a very calculated decision. Wall Street wants to derail monetary regulation and keep tax rates low. It takes friendly legislators to make it happen, and it has one thing they want: money.
For the past two decades, around 90% in the House election won the career candidate who spent the most money, according to data from the Center for Responsive Politics, which gives candidates more incentives to pander to the wealthy who give.
Wall Street political spending has helped create a crisis for democracy. Most Americans who donate to campaigns can only donate a small amount, meaning they don’t have the same level of influence over their elected representatives as wealthy donors. If representatives feel indebted to the financial sector, the Wall Street agenda has an immediate advantage in the halls of Congress.
The rich have their own priorities, which often conflict with the needs of most Americans. Individuals in the primary fifth of the income distribution have an average more conservative view of the economy, especially in terms of taxation, regulation and benefit spending. A majority of the public, however, believes the government should guarantee access to basic necessities and support raising the minimum wage and funding social security and health care.
As a result, Congress ’comfortable relationship with Wall Street donors has hampered popular economic policies. There is widespread bipartisan support for consumer protections, which is available 91% of Americans who believe it is important to control financial services. More than two thirds of Americans supporting the wealth tax of billionaires, 75% of Americans supported eliminating the distinction between the tax rate for earned and unearned income, and 70% the public wants to increase corporate tax by eliminating deficits.
Lots of caches of IRS information to get to @propublica revealed how billionaires like Jeff Bezos, Elon Musk + Warren Buffett pay little in income tax compared to their vast wealth – sometimes, even none.
– Robert F. Kennedy Jr. (@RobertKennedyJr) June 10, 2021
Yet none of these policies have become law. Instead of prioritizing economic justice, over the past several decades, Congress has passed tax cuts for the rich and bail Wall Street in 2008. Congressional priorities have become Wall Street’s priorities.
The financial sector has returned their investment. Between 2007-2009, six of the eight corporations that spent the most money were seen a 7% decrease in their tax rate compared to the 0.2% decrease received by the company’s median spending. As a result, political scientists Jacob Hacker and Nathan Loewentheil writing that these large corporations saved an “estimated $ 11 billion – which, if entirely due to lobbying, would show an investment return of more than 2,000 percent.” The rich seek policies that make them richer, creating a cycle of political and economic inequality.
Political corporate money incites corruption and detrimental consequences for workers and taxpayers. The titans of the financial sector continue to use their money to influence politicians and ensure that there are smaller limits on their income in the future. The policies they pushed for widening inequality, broke the net of social safety and damaged the welfare of the many. The unequal economy is in part about the logical consequence of a campaign finance system that exploits the wealthy at the expense of the ordinary people and democracy itself in America.
“For the Laws of the People” is not a panacea, but it is an important start towards restoring the balance of our political system.
Originally published on Common Dreams.
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Children’s Health Defense.