Analysis: U.S. Supreme Court Campaign Finance Decision

Is it not remarkable, dear Reader, that mere days after Republican Scott Brown upsets the U.S. Senate special election (and Obama Administration referendum), that the U.S. Supreme Court made a landmark ruling, rolling back campaign finance and anti-corruption efforts? The case was two-fold, as far as we can tell, in its implications: first, it holds time-based bans upon corporate political advertising and politicking (namely, preventing those interests from advertising too near an election day); second, it frees corporations and other such interests to make direct contributions to political candidates, rather than filtered through special interest groups. The decision was leveraged upon the First Amendment of the U.S. Constitution, suggesting that restricting corporations from doing the aforementioned activities was impinging upon freedom of speech.

This actually does have coherence, as we understand it: corporations are considered an individual under corporate law, legally on par with an actual living human being, such as yourself. So, in essence, yes, a corporation does have just as much of a right to contribute and politick for its candidate of choice as you; that they have vastly more money to throw around than you is really trivial. At least, it's trivial to the Supreme Court. The full implication of the decision perhaps did not sink into justices' thoughts as cast their votes. Let us explain:

Consider the organisation known as Goldman Sachs, everyone's favourite vampire squid. As a financial institution, Goldman can borrow an effectively unlimited amount of money from the Federal Reserve, and then turn around and invest that money into something which pays a guaranteed return. At present, much of that would seem to be Treasury Bills; in essence, Goldman Sachs permits the Federal Government to borrow from itself, but make it look otherwise, and make a profit at the same time. This cozy little arrangement, along with all the other cozy little arrangements Goldman has, seems to make a lot of people very angry. Now, let's say that a vociferous group of contenders for Congress run on a "let's shut down all the big banks" platform, and experience massive support from across the U.S.

The Lord's work would seem to be in jeopardy, no? At that point, is it not a good investment to borrow, say, $25 billion from the U.S. Treasury, and invest that in supporting the candidates who are on the "let's keep Wall Street bonuses flowing" platform? The 'return' off of that 'investment' is not necessarily quantifiable, but it is indeed qualifiable: Goldman Sachs continues to survive. That, perhaps, is the best investment that Goldman could have made with someone else's money.

We point out there is no longer any reason whatsoever that Goldman cannot do this exact manoeuvre during the 2010 Congressional elections. Nor, indeed, does anything prevent JPMorgan Chase from doing the same thing, or Citigroup, or Wells Fargo, and the rest of the too-big-to-fail crowd. Heck, the Federal Reserve System itself could start running advertising if it wanted to! Call us alarmist? Please feel free. But remember that there is nothing which will prevent this from happening.

If anyone notices how momentous this decision was, we have no doubt there will be efforts of dressing it up as a good thing; consider this hatchet piece from the Atlantic. However, in our opinion the Court has simply handed over near-total political control of the U.S. Government to large corporate interests on a silver platter. That situation is perhaps nothing new per se - consider Goldman Sachs' apparent ownership of the U.S. Treasury - but it is much, much more of the status quo, and additionally set in concrete. Going forward, we fear there will forever be a shrinking ability of small interests (e.g. individuals, small entrepreneurs, et cetera) in getting their message to their supposed representatives in Government. That could change, as an aside, if the apportionment lawsuit in Mississippi is actually successful, but the outcome of that case is far from certain.

What is certain is that the large corporations which will exploit this Supreme Court ruling will do so to the hilt, because the Depression puts their very survival at stake. Without even the most ineffective of legal restraint on their politicking, we would not be the least bit surprised if more and more high-level officials in the Government come from super-huge banks and large corporate interests, like the defence industry and healthcare, et cetera. Put simply, the sovereignty of the United States has been transferred, de jure, from the American Citizenry, to the largest and most powerful corporations. The Government must and will respond accordingly.

What this will mean for American Citizens trying to scrape their way through the Depression is fairly easy to predict. The average American will feel the pain, because he or she will be forcibly squeezed of their wealth, for the benefit of these corporate interests. The U.S. Government will continue to everything it can in order to reinforce the existence of those institutions which ethically should be left to die. The cost of these corporatist heroics will come in the forms of more bailouts, more Government largesse, higher taxes, higher inflation, and more destruction of the non-corporatised economy.