Fair Elections

One of my previous posts, The Power of Money, focused on Congressional term limits and how they could offer some relief from the political influence of lobbyist groups. An even larger impact could be made by turning to a publically funded election process, banning large political contributions entirely.

If politicians continue to be forced to pursue lobbyist and corporate dollars in order to fund their re-election, then we’ll never have elected officials that are truly beholden to the people. Like the rest of us, they answer to who pays the bills. As representatives of the public, it stands to reason that the public should be our officials’ sole financiers instead of these special interest groups.

That is not to say that citizens shouldn’t be allowed to donate money to the candidate(s) of their choosing. They should. However those donations should be limited and they must truly be individual.

The Fair Elections Now Act was reintroduced this year in both the House and the Senate. While it doesn’t go to the extreme of mandatory public-only funding for federal elections that I am suggesting, it is an excellent step in that direction. It currently has 78 co-sponsors in the House and 13 in the Senate. All but two of those supporters are Democrats. It’s time we pressured both political parties to adopt this bill and get it pushed though in order to start driving the power back into the hands of the public and away from the lobbyists that currently compromise our elected officials via their financial clout.

You can learn more about this bill at http://fairelectionsnow.org/about-bill. You can also learn how to offer your own support via the Take Action tab on that site.

If you’re not yet convinced, here’s a pair of examples for you from the great state of Texas.

John Cornyn is a Republican Senator that holds several committee assignments and has been in office since 2002. Who are the top five industries that have combined to donate over $4M to his campaigns since 2007 including his top contributor, Exxon Mobile?

Law Firms, Oil & Gas, Retired, Health Professionals, and Real Estate

What is his voting record on energy related bills?

Voted YES on barring EPA from regulating greenhouse gases. (Apr 2011)

Open the Outer Continental Shelf for oil & gas leasing. (Jun 2008)

Voted NO on removing oil & gas exploration subsidies. (Jun 2007)

Voted NO on including oil & gas smokestacks in mercury regulations. (Sep 2005)

Voted NO on reducing oil usage by 40% by 2025 (instead of 5%). (Jun 2005)

Voted NO on banning drilling in the Arctic National Wildlife Refuge. (Mar 2005)

Voted YES on Bush Administration Energy Policy. (Jul 2003)

Voted NO on targeting 100,000 hydrogen-powered vehicles by 2010. (Jun 2003)

Drill in Alaska; oppose global warming treaties. (Jun 2002) 

Randy Neugebauer is a Republican House Representative that sits on the Financial Services Committee and has been in office since 2003. Who are the top five industries that have combined to contribute almost $250K to his current campaign war chest?

Insurance, Commercial Banks, Finance/Credit Companies, Securities & Investments, and Real Estate

Guess which member of Congress has more money invested in Goldman Sachs than any other?

Randy Neugebauer with $550K.

What is his voting record on banking and corporate related bills?

Voted YES on terminating the Home Affordable mortgage Program. (Mar 2011)

Voted NO on letting shareholders vote on executive compensation. (Jul 2009)

Voted NO on modifying bankruptcy rules to avoid mortgage foreclosures. (Mar 2009)

Voted NO on regulating the subprime mortgage industry. (Nov 2007)

Voted NO on allowing stockholder voting on executive compensation. (Apr 2007)

Voted NO on protecting whistleblowers from employer recrimination. (Mar 2007)

Voted YES on restricting bankruptcy rules. (Jan 2004)

Would these two politicians have voted differently if they hadn’t received those financial contributions? We have no way of knowing for sure. But I’ll bet I’m not the only one that wonders.

Change the Game

How many House Representatives from your state can you name and what major bills have they played a significant role in proposing or pushing through?

That’s what I thought.

The House of Representatives has become a bloated organization of self-serving bureaucrats that have gerrymandered themselves into near permanent positions of power at $174,000 a year with little to nothing holding them accountable for performance. Bipartisan bickering and indecision have left them virtually incapable of fulfilling their duty to serve the American public. Last night, we received our most recent example. The House failed to pass the balanced budget amendment. We’re a country that’s 15 trillion dollars in debt, partially owned by a foreign power bent on stealing our technology and overcoming our position as the most powerful country in the world, and yet we can’t agree to stop spending more than we earn. Politicians will tell you the reason for this is a desire to save programs that serve the people such as Social Security and Medicaid, but the real reason is much simpler. A balanced budget reduces the power of Congress by limiting what they can spend. The last thing any politician is going to voluntarily vote for is a reduction in their own power.

Our country is much like a corporation, an industry leader suddenly laden with debt and facing competing firms eager to gobble up its market share. What is one of the first things a company in that position must do? It cuts the fat. It reduces overhead, it increases efficiency, and it removes the roadblocks that have caused its stagnation. How does the United States do that? We abolish the House of Representatives. Removing the 435 members of the House would result in a leaner government that is better equipped and more easily held accountable for making the decisions we need to turn our country around.

Our government was built on a system of checks and balances with three branches - Executive, Legislative, and Judicial - each tasked with ensuring the other doesn’t hold too much power. That wouldn’t change. The Senate would remain as our Legislative branch. The House was built to ensure the population is properly served by giving those areas with a larger number of citizens, a larger share of the 435 spots. That wouldn’t need to change either.

Our leaner Congress would include only a Senate, with each state receiving at least two and sometimes three representatives, based on population. Our country has a population of over 312 million. For the sake of easy math, let’s call it 300 million. With 50 states, that means each state would have 6 million people if the population were evenly spread across the country. Since it’s not and we want citizens to be fairly represented, we make a simple rule. Any state with less than the average gets two senators, any state with more than the average gets three senators. As of 2010, that would mean 17 states would have three senators and the remaining 33 would have two, giving us a total Senate of 117. Every decade, we’d adjust accordingly based on the new census, adding new or removing old positions in the next upcoming election cycle.

A Legislative branch consisting of one chamber made up of 117 members could get things done.  It would only take one majority vote of 59 to pass a bill rather than a majority vote of 218 in the House followed by another majority vote of 51 in the current Senate. It would also be easier for voters to track the performance of their elected officials. You’d only have two or three of them. If they don’t have a record of voting for the bills you like… toss them out.

This idea probably sounds extreme to some, but take a few minutes to question why. Does the House truly serve your needs as a citizen of this country or are your taxes serving the whims of those 435 politicians?

The Power of Money

In 1951, the 22^nd Amendment to the Constitution was ratified, setting a two-term limit on the office of President of the United States. Despite widespread public support of similar term limits for Congress, dating all the way back to the American Revolution, Congress remains unlimited. Many members essentially serve in lifetime positions.

While many of those members were and are no doubt dedicated to serving the citizens of this country, it cannot be argued that money doesn’t influence decision making. If a particular interest group, company, or individual provides a substantial portion of the funds that drive a politician’s campaign, that politician is going to face certain pressures to vote in favor of laws that benefit that group, company, or individual. Allowing members of Congress to serve decades only further supports the influence of those contributions. Congressmen serve more years, making those campaign contributions good long-term investments for the parties that want to influence that congressman.

While one cannot draw a one-to-one correlation of time spent in office to the amount of campaign contributions received, there is definitely a noticeable trend. I’ve listed 10 members of Congress that have been in office at least 19 years and the amount of money they’ve received from just their top two interest groups between 2009 and 2011. You’ll recognize a trend in those groups too – Investment Banking, Real Estate, Law Firms, and Insurance – the very same groups that seem to hold sway over how our economy is run.

On August 10, Matt Caldwell, a Florida State House Representative, filed HM 83 calling for a Constitutional Amendment for Congressional term limits. On October 25, Joe Negron, a Florida State Senator, filed SM 672 calling for the same. I urge every reader to write to their Congressman and ask them to support similar efforts. You can find out how at http://www.senate.gov/ by using the Find Your Senators drop-down menu in the upper right-hand corner or http://www.house.gov/ and using the Find Your Representative search in the upper right-hand corner.

Congress is not going to vote to limit their own time in office unless we, their constituents, demand it.

Here is my list of 10:

John McCain (in office since 1986) – Republican Senator from Arizona

Top two contributing interest groups are Law Firms and Real Estate, accounting for over $19M in contributions in the past two years.

Harry Reid (in office since 1986) – Democrat Senator from Nevada

Top two contributing interest groups are Law Firms and Securities/Investment, accounting for almost $5M in contributions in the past two years.

Barbara Boxer (in office since 1992) –Democrat Senator from California

Top two contributing interest groups are Law Firms and Women’s Issues, accounting for almost $3.2M in contributions in the past two years.

Joe Lieberman (in office since 1988) – Independent Senator from Connecticut

Top two contributing interest groups are Securities/Investment and Real Estate, accounting for over $3M in contributions in the past two years.

Mitch McConnell (in office since 1984) – Republican Senator from Kentucky

Top two contributing interest groups are Securities/Investment and Law Firms, accounting for over $2.2M in contributions in the past two years.

John Boehner (in office since 1990) – Current Republican Speaker of the House, 8^th District of Ohio House Representative

Top two contributing interest groups are Securities/Investment and Insurance, accounting for over $1.2M in contributions in the past two years.

Max Baucus (in office since 1977) – Democrat Senator from Montana

Top two contributing interest groups are Securities/Investment and Law Firms, accounting for over $1.2M in contributions in the past two years.

Orrin Hatch (in office since 1976) – Republican Senator from Utah

Top two contributing interest groups are Pharmaceuticals and Law Firms, accounting for almost $1.2M in contributions in the past two years.

Dianne Feinstein (in office since 1991) – Democrat Senator from California

Top two contributing interest groups are Law Firms and Real Estate, accounting for over $1M in contributions in the past two years.

John Jay Rockefeller (in office since 1984) – Democrat Senator from West Virginia

Top two contributing interest groups are Law Firms and Securities/Investment, accounting for almost $1M in contributions in the past two years.

The Bonus Culture

One of the most egregious Wall Street practices that should have been stopped during the bailout was that of the bonus culture. Investment bankers made ridiculously large bonuses regardless of whether they or their firm actually made their clients any money. I’m not suggesting this practice should be illegal for any business that lives or dies by its own bottom line. America is the home of free enterprise. If a company’s board of directors wants to throw good money away on poor performance, one can only hope it spells that company’s eventual doom. What I am suggesting is that any company that accepted taxpayer dollars to bail it out from its own greed and stupidity should be barred from giving out these types of bonuses. Taxpayers can barely pay their own bills while the government is handing over their income to these white collar thieves to ensure they remain comfortably coddled in their Manhattan mansions and country clubs.

I’ve already written about John Thain and the $4 billion he gave away to his cronies at Merrill Lynch in bonuses just before his firm was sold to Bank of America in 2009 and led to that bank’s near collapse and subsequent $45 billion bailout. That’s hardly the only example.

In 2010, BOA paid out over $4.4 billion in bonuses to investment banking employees for that 2009 performance that required the bailout loan from taxpayers. While seven top executives at Goldman Sachs refused 2008 bonuses based on receiving $10 billion in TARP bailout funds, it still paid almost that same amount in bonuses to its remaining bankers. Citigroup paid $5.3 billion in bonuses in 2008 and nearly the same amount in 2009 despite receiving $45 billion in TARP money over that same period. Similar stories can be told about the other TARP beneficiaries including AIG, JPMorgan Chase, Wells Fargo, Morgan Stanley, and more.

So why go on about offenses that are now two and three years old?

Earlier this week it was learned that Fannie Mae and Freddie Mac, the giant mortgage companies that have already received over $141 billion in taxpayer aid, gave out over $13 million in 2010 bonuses to ten executives. At the same time, Freddie is reporting a third quarter loss of $4.4 billion and asking for an additional $6 billion loan from the Treasury.

Clearly our government still isn’t listening. We cannot continue to support this greed and ineptitude. If a company performs poorly, it and its executives must suffer the financial consequences.

Just like the rest of us.

That’s how free enterprise works.