By F. William Engdahl
July 13, 2015
New Eastern Outlook
What few people inside or outside the United States grasp is the fundamental transformation of US politics, especially since the 1970’s, from political parties with stable mass-based constituencies to two parties bought lock, stock and barrel by a handful of American oligarchs with one agenda—the advancement of the interests of those same oligarchs regardless of the social consequences. Next year, 2016 is a Presidential election year. Already so-called front-runners are being proclaimed by mainstream media. It has nothing to do with genuine voter support but rather with the money behind Democrat Hillary Clinton and Republican Jeb Bush.
To understand this transformation makes clearer why the United States and their Washington politicians have become some of the most despised and ridiculed in the world today and why recent presidents from Ronald Reagan through to Barack Obama have been so morally rotten.
A key part of the transformation of America has come from extraordinary Supreme Court rulings. The country has gone from a country and political system where bipartisan consensus and cooperation on legislation in Washington was the hallmark of Washington politics, to the present undemocratic state. Today ultimately there is not a dime’s difference between major candidates—Democrat or Republican. This is because there has been a series of Supreme Court rulings and laws that virtually eliminate what used to be strict limits on how much money individuals and special interest groups could give to get their candidate elected.
Creation of the American Oligarchy
Because of changes introduced in the 1980’s from the Bush-Reagan presidencies the amount of tax exemptions enjoyed by the highest income group has soared while burdens on what was once the stable middle class in income has been squeezed severely over the past three decades. As of 2010 the richest 400 Americans–people like Bill Gates, George Soros, Ted Turner, Warren Buffett, David Rockefeller—had more assets than half of all Americans.
While the average incomes of the top 20 percent in the United States grew by 43 percent in inflation-adjusted terms between 1979 and 2012, the average incomes of those in the middle 60 percent grew by only 10 percent, and the incomes of the bottom 20 percent actually fell by 3 percent. The top rapidly pulled away from the middle, while the bottom simultaneously fell further behind.
The financial crisis that exploded in 2007 with the bursting of the housing bubble devastated the middle class while tax laws enacted after 2008 helped the top 10%. The period since the first Ronald Reagan presidency in 1981 has seen the phenomenal rise of a genuine American oligarchy. The Greek word oligarchy means a form of power structure in which power effectively rests with a few. It can be an oligarchy of royalty. In America today it is an oligarchy of wealth. This is the background to the dangerous developments in US election campaign financing.
Since 1979 the US Supreme Court has handed down decisions that have literally opened the floodgates to the oligarchs’ takeover of elections.
After the Nixon Watergate campaign scandal in 1974 Congress passed amendments to the Federal Election Campaign Act. The amendments created a bipartisan Federal Election Commission (FEC), to oversee and enforce the law that initially set limits to total costs of federal campaigns. The act set up disclosure requirements for federal candidates, political parties, and political action committees of donations. On the surface all looked well and good. Political elections would be monitored strictly to prevent big money interests from buying elections.
Then in 1979 Congress made amendments to the FECA law that opened a giant financing loophole in the once strict FECA. A loophole allowed individuals, unions, and corporations to give unlimited sums to parties and national party committees for “party-building” purposes. These donations are known as “soft money.”
That was not enough for some special interests. They wanted to be certain they could push the “little man” out of politics with their money, along the motto “Who pays the piper calls the tune.”
In 2007 during the George W. Bush administration the Supreme Court took up the Bipartisan Campaign Reform Act in Federal Election Commission v. Wisconsin Right to Life. The Court ruled, 5—4, that bans on ads paid for by corporations or unions in the weeks leading up to an election are an unconstitutional restriction on the right to advocate on an issue. “Discussion of issues cannot be suppressed simply because the issues may also be pertinent in an election,” Chief Justice John Roberts wrote.
Then, in 2010 during the Obama first term, the Supreme Court ruled, 5–4, in Citizens United v. Federal Election Commission, that the government cannot restrict the spending of corporations, unions, and other groups for political campaigns, maintaining that it’s their First Amendment right to support candidates as they choose. The US Constitution’s First Amendment in the Bill of Rights prohibits Congress from restricting the press or the rights of individuals to speak freely.
In the majority decision, Justice Anthony Kennedy wrote the astonishing conclusion, “We now conclude that independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption.” The decision gave rise to a proliferation of “super PACs” or Political Action Committees that opened the floodgates for unlimited amounts of money to be poured into political campaigns.
The consequences of these successive rulings has been the soaring costs of all public elections, meaning that only candidates who can woo the big money from Wall Street, the pharmaceutical industry, Monsanto and the agribusiness lobby and private billionaires have a chance to win. No chance for a maverick like Ron Paul or son Rand Paul or Bernie Sanders.
‘Dark money’ now has free speech right
Now the Republicans in the US Congress have just passed a new law that insures that so-called “dark money” will remain dark. Dark money refers to money that passes through supposedly non-political social welfare non-profit organizations, such as the Koch Brothers’ Crossroads GPS or the League of Conservation Voters, and is therefore free from disclosure.
On June 17, the House Appropriations Committee passed the 2016 Financial Services and General Government Appropriations bill. It included provisions that ensure that the so-called “dark money” of elections remains very dark. Section 129 of the bill prevents the IRS from making any investigation whether these social welfare groups are acting exclusively for social welfare; Section 625 prevents the SEC from requiring disclosure of political donations for publicly traded companies; Section 735 prevents a rule that requires government contractors disclose their contributions to political groups, nonprofits, and trade unions.
A closer look at the various candidates for the 2016 Presidential nominations in both Republican and Democratic parties reveals the shocking reality that almost every single one has backing of one or more American billionaires—not millionaires, but billionaires.
The billionaire brothers Charles and David Koch, behind the controversial Keystone oil pipeline from Canada to Texas, neo-conservatives who sit on the board of the American Enterprise Institute think tank, have publicly vowed to spend nearly $900 million to influence election races in 2016. Billionaires George Soros and Alice Walton, a Walmart heiress, back the ‘Ready for Hillary’ PAC, backing Hillary Clinton. Mitt Romney’s 2012 Presidential campaign was backed by billionaire casino mogul Sheldon Adelson, also a financier of Israel’s Netanyahu. Republican “golden boy,” Jeb Bush, is backed by numerous billionaires, many from Wall Street like Henry Kravis.
With the latest dark money law, most Americans will have no clue who is buying which candidate but we can be sure both candidates, Democrat and Republican, will be backed by the financial networks of this American money oligarchy. Little wonder that recent American politics—domestic and foreign have been so rotten. These days we get what they pay for…
F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook”.