Our Politicians Are Money Launderers in the Trafficking of Power and Policy
Our Politicians Are Money Launderers in the Trafficking of Power and Policy
by: Bill Moyers
Comments Delivered at the Public Citizen 40th Gala, October 20, 2011 Washington, DC
I am honored to share this occasion with you. No one beyond your collegial inner circle appreciates more than I do what you have stood for over these 40 years, or is more aware of the battles you have fought, the victories you have won, and the passion for democracy that still courses through your veins. The great progressive of a century ago, Robert LaFollette of Wisconsin – a Republican, by the way – believed that “Democracy is a life; and involves constant struggle.” Democracy has been your life for four decades now, and would have been even more imperiled today if you had not stayed the course.
I began my public journalism the same year you began your public advocacy, in 1971. Our paths often paralleled and sometimes crossed. Over these 40 years journalism for me has been a continuing course in adult education, and I came early on to consider the work you do as part of the curriculum – an open seminar on how government works – and for whom. Your muckraking investigations – into money and politics, corporate behavior, lobbying, regulatory oversight, public health and safety, openness in government, and consumer protection, among others – are models of accuracy and integrity. They drive home to journalists that while it is important to cover the news, it is more important to uncover the news. As one of my mentors said, “News is what people want to keep hidden; everything else is publicity.” And when a student asked the journalist and historian Richard Reeves for his definition of “real news”, he answered: “The news you and I need to keep our freedoms.” You keep reminding us how crucial that news is to democracy. And when the watchdogs of the press have fallen silent, your vigilant growls have told us something’s up.
So I’m here as both citizen and journalist to thank you for all you have done, to salute you for keeping the faith, and to implore you to fight on during the crisis of hope that now grips our country. The great American experience in creating a different future together – this “voluntary union for the common good” – has been flummoxed by a growing sense of political impotence – what the historian Lawrence Goodwyn has described as a mass resignation of people who believe “the dogma of democracy” on a superficial public level but who no longer believe it privately. There has been, he says, a decline in what people think they have a political right to aspire to – a decline of individual self-respect on the part of millions of Americans.
You can understand why. We hold elections, knowing they are unlikely to produce the policies favored by the majority of Americans. We speak, we write, we advocate – and those in power turn deaf ears and blind eyes to our deepest aspirations. We petition, plead, and even pray – yet the earth that is our commons, which should be passed on in good condition to coming generations, continues to be despoiled. We invoke the strain in our national DNA that attests to “life, liberty, and the pursuit of happiness” as the produce of political equality – yet private wealth multiplies as public goods are beggared. And the property qualifications for federal office that the framers of the Constitution expressly feared as an unseemly “veneration for wealth” are now openly in force; the common denominator of public office, even for our judges, is a common deference to cash.
So if belief in the “the dogma of democracy” seems only skin deep, there are reasons for it. During the prairie revolt that swept the Great Plains a century after the Constitution was ratified, the populist orator Mary Elizabeth Lease exclaimed: “Wall Street owns the country…Our laws are the output of a system which clothes rascals in robes and honesty in rags. The [political] parties lie to us and the political speakers mislead us…Money rules.”
That was 1890. Those agrarian populists boiled over with anger that corporations, banks, and government were ganging up to deprive every day people of their livelihood.
She should see us now.
John Boehner calls on the bankers, holds out his cup, and offers them total obeisance from the House majority if only they fill it.
That’s now the norm, and they get away with it. GOP once again means Guardians of Privilege.
Barack Obama criticizes bankers as “fat cats”, then invites them to dine at a pricey New York restaurant where the tasting menu runs to $195 a person.
That’s now the norm, and they get away with it. The President has raised more money from banks, hedge funds, and private equity managers than any Republican candidate, including Mitt Romney. Inch by inch he has conceded ground to them while espousing populist rhetoric that his very actions betray.
Let’s name this for what it is: hypocrisy made worse, the further perversion of democracy.
Democratic deviancy defined further downward. Our politicians are little more than money launderers in the trafficking of power and policy – fewer than six degrees of separation from the spirit and tactics of Tony Soprano.
Why New York’s Zuccotti Park is filled with people is no mystery. Reporters keep scratching their heads and asking: “Why are you here?” But it’s clear they are occupying Wall Street because Wall Street has occupied the country. And that’s why in public places across the country workaday Americans are standing up in solidarity. Did you see the sign a woman was carrying at a fraternal march in Iowa the other day? It read: “I can’t afford to buy a politician so I bought this sign.”
We know what all this money buys. Americans have learned the hard way that when rich organizations and wealthy individuals shower Washington with millions in campaign contributions, they get what they want. They know that if you don’t contribute to their campaigns or spend generously on lobbying,
…you pick up a disproportionate share of America’s tax bill. You pay higher prices for a broad range of products from peanuts to prescriptions. You pay taxes that others in a similar situation have been excused from paying. You’re compelled to abide by laws while others are granted immunity from them. You must pay debts that you incur while others do not. You’re barred from writing off on your tax returns some of the money spent on necessities while others deduct the cost of their entertainment. You must run your business by one set of rules, while the government creates another set for your competitors… In contrast the fortunate few who contribute to the right politicians and hire the right lobbyists enjoy all the benefits of their special status. Make a bad business deal; the government bails them out. If they want to hire workers at below market wages, the government provides the means to do so. If they want more time to pay their debts, the government gives them an extension. If they want immunity from certain laws, the government gives it. If they want to ignore rules their competition must comply with, the government gives it approval. If they want to kill legislation that is intended for the public, it gets killed.
I didn’t crib that litany from Public Citizen’s muckraking investigations over the years, although I could have. Nor did I lift it from Das Kapital by Karl Marx or Mao Tse-tung’s Little Red Book. No, I was literally quoting Time Magazine, long a tribune of America’s establishment media. From the bosom of mainstream media comes the bald, spare, and damning conclusion: We now have “government for the few at the expense of the many.”
But let me call another witness from the pro-business and capitalist- friendly press. In the middle of the last decade – four years before the Great Collapse of 2008 – the editors of The Economist warned:
A growing body of evidence suggests that the meritocratic ideal is in trouble in America. Income inequality is growing to levels not seen since the (first) Gilded Age. But social mobility is not increasing at anything like the same pace….Everywhere you look in modern America – in the Hollywood Hills or the canyons of Wall Street, in the Nashville recording studios or the clapboard houses of Cambridge, Massachusetts – you see elites mastering the art of perpetuating themselves. America is increasingly looking like imperial Britain, with dynastic ties proliferating, social circles interlocking, mechanisms of social exclusion strengthening, and a gap widening between the people who make decisions and shape the culture and the vast majority of working stiffs.
Hear the editors of The Economist: “The United States is on its way to becoming a European-style class-based society.”
Can you imagine what would happen if I had said that on PBS? Mitch McConnell and John Boehner would put Elmo and Big Bird under house arrest. Come to think of it, I did say it on PBS back when Karl Rove was president, and there was indeed hell to pay. You would have thought Che Guevara had run his motorcycle across the White House lawn. But I wasn’t quoting from a radical or even liberal manifesto. I was quoting – to repeat – one of the business world’s most respected journals. It is the editors of the The Economist who are warning us that “The United States is on its way to becoming a European-style class-based society.”
And that was well before our financiers, drunk with greed and high on the illusions and conceits of laissez faire (“leave us alone”) fundamentalism, and humored by rented politicians who do their bidding, brought America to the edge of the abyss and our middle class to its knees.
How could it be? How could this happen in the country whose framers spoke of “life, liberty, and the pursuit of happiness” in the same breath as political equality? Democracy wasn’t meant to produce a class-ridden society. When that son of French aristocracy Alexander de Tocqueville traveled through the bustling young America of the 1830s, nothing struck him with greater force than “the equality of conditions.” Tocqueville knew first-hand the vast divisions between the wealth and poverty of Europe, where kings and feudal lords took what they wanted and left peasants the crumbs. But Americans, he wrote,
“…seemed to be remarkably equal economically…Some were richer, some were poorer, but within a comparative narrow band. Moreover, individuals had opportunities to better their economic circumstances over the course of a lifetime, and just about everyone [except of course slaves and Indians] seemed to be striving for that goal.”
Tocqueville looked closely, and said: “I easily perceive the enormous influence that this primary fact exercises on the workings of the society.”
And so it does. Evidence abounds that large inequalities undermine community life, reduces trust among citizens, and increases violence. In one major study from data collected over 30 years [by the epidemiologists Richard Wilkinson and Kate Pickett in their book: The Spirit Level: Why Greater Equality Makes Societies Stronger] the most consistent predictor of mental illness, infant mortality, educational achievements, teenage births, homicides, and incarceration, is economic inequality. And as Nobel Laureate Kenneth Arrow has written, “Vast inequalities of income weakens a society’s sense of mutual concern…The sense that we are all members of the social order is vital to the meaning of civilization.”
The historian Gordon Wood won the Pulitzer Prize for his book on The Radicalism of the American Revolution: If you haven’t read it, now’s the time. Wood says that our nation discovered its greatness“ by creating a prosperous free society belonging to obscure people with their workaday concerns and their pecuniary pursuits of happiness.” This democracy, he said, changed the lives “of hitherto neglected and despised masses of common laboring people.”
Those words moved me when I read them. They moved me because Henry and Ruby Moyers were “common laboring people.” My father dropped out of the fourth grade and never returned to school because his family needed him to pick cotton to help make ends meet. Mother managed to finish the eighth grade before she followed him into the fields. They were tenant farmers when the Great Depression knocked them down and almost out. The year I was born my father was making $2 a day working on the highway to Oklahoma City. He never took home more than $100 a week in his working life, and made that only when he joined the union in the last job he held. I was one of the poorest white kids in town, but in many respects I was the equal of my friend who was the daughter of the richest man in town. I went to good public schools, had use of a good public library, played sand-lot baseball in a good public park, and traveled far on good public roads with good public facilities to a good public university. Because these public goods were there for us, I never thought of myself as poor. When I began to piece the story together years later, I came to realize that people like the Moyers had been included in the American deal: “We, the People” included us.
It’s heartbreaking to see what has become of that bargain. These days it’s every man for himself; may be the richest and most ruthless predators win!
How did this happen?
You know the story, because it begins the very same year that you began your public advocacy and I began my public journalism. 1971 was a seminal year.
On March 29 of that year, Ralph Nader bought ads in 13 publications and sent out letters asking people if they would invest their talents, skills, and yes, their lives, in working for the public interest. The seed sprouted swiftly that spring: By the end of May over 60,000 Americans responded, and Public Citizen was born.
But something else was also happening. Five months later, on August 23, 1971, a corporate lawyer named Lewis Powell – a board member of the death-dealing tobacco giant Philip Morris and a future Justice of the United States Supreme Court – sent a confidential memorandum to his friends at the U. S. Chamber of Commerce. We look back on it now as a call to arms for class war waged from the top down.
Let’s recall the context: Big Business was being forced to clean up its act. It was bad enough to corporate interests that Franklin Roosevelt’s New Deal had sustained its momentum through Harry Truman, Dwight Eisenhower, John Kennedy, and Lyndon Johnson. Suddenly this young lawyer named Ralph Nader arrived on the scene, arousing consumers with articles, speeches, and above all, an expose of the automobile industry, Unsafe at Any Speed. Young activists flocked to work with him on health, environmental, and economic concerns. Congress was moved to act. Even Republicans signed on. In l970 President Richard Nixon put his signature on the National Environmental Policy Act and named a White House Council to promote environmental quality. A few months later millions of Americans turned out for Earth Day. Nixon then agreed to the creation of the Environmental Protection Agency. Congress acted swiftly to pass tough new amendments to the Clean Air Act and the EPA announced the first air pollution standards. There were new regulations directed at lead paint and pesticides. Corporations were no longer getting away with murder.
And Lewis Powell was shocked – shocked! – at what he called “an attack on the American free enterprise system.” Not just from a few “extremists of the left,” he said, but also from “perfectly respectable elements of society,” including the media, politicians, and leading intellectuals. Fight back, and fight back hard, he urged his compatriots. Build a movement. Set speakers loose across the country. Take on prominent institutions of public opinion – especially the universities, the media, and the courts. Keep television programs under “constant surveillance.” And above all, recognize that political power must be “assiduously (sic) cultivated; and that when necessary, it must be used aggressively and with determination” and “without embarrassment.”
Powell imagined the U.S. Chamber of Commerce as a council of war. Since business executives had “little stomach for hard-nose contest with their critics” and “little skill in effective intellectual and philosophical debate,” they should create new think tanks, legal foundations, and front groups of every stripe. It would take years, but these groups could, he said, be aligned into a united front (that) would only come about through “careful long-range planning and implementation, in consistency of action over an indefinite period of years, in the scale of financing available only through joint effort, and in the political power available only through united action and united organizations.”
You have to admit it was a brilliant strategy. Although Powell may not have seen it at the time, he was pointing America toward plutocracy, where political power is derived from the wealthy and controlled by the wealthy to protect their wealth. As the only countervailing power to private greed and power, democracy could no longer be tolerated.
While Nader’s recruitment of citizens to champion democracy was open for all to see – depended, in fact, on public participation – Powell’s memo was for certain eyes only, those with the means and will to answer his call to arms. The public wouldn’t learn of the memo until after Nixon appointed Powell to the Supreme Court and the enterprising reporter Jack Anderson obtained a copy, writing that it may have been the reason for Powell’s appointment.
By then his document had circulated widely in corporate suites. Within two years the board of the U.S. Chamber of Commerce formed a task force of 40 business executives – from U.S. Steel, GE, GM, Phillips Petroleum, 3M, Amway, and ABC and CBS (two media companies, we should note). Their assignment was to coordinate the crusade, put Powell’s recommendations into effect, and push the corporate agenda. Powell had set in motion a revolt of the rich. As the historian Kim Phillips-Fein subsequently wrote, “Many who read the memo cited it afterward as inspiration for their political choices.”
Those choices came soon. The National Association of Manufacturers announced it was moving its main offices from New York to Washington. In 1971, only 175 firms had registered lobbyists in the capital; by 1982, nearly twenty-five hundred did. Corporate PACs increased from under 300 in 1976 to over twelve hundred by the middle of the l980s. From Powell’s impetus came the Business Roundtable, the American Legislative Exchange Council (ALEC), the Heritage Foundation, the Cato Institute, the Manhattan Institute, Citizens for a Sound Economy (precursor to what we now know as Americans for Prosperity) and other organizations united in pushing back against political equality and shared prosperity.* They triggered an economic transformation that would in time touch every aspect of our lives.
Powell’s memo was delivered to the U.S. Chamber of Commerce at its headquarters across from the White House on land that was formerly the home of Daniel Webster. That couldn’t have been more appropriate. History was coming full circle at 1615 H Street. Webster is remembered largely as the most eloquent orator in America during his years as Senator from Massachusetts and Secretary of State under three presidents in the years leading up to the Civil War. He was also the leading spokesman for banking and industry nabobs who funded his extravagant tastes in wine, boats, and mistresses. Some of them came to his relief when he couldn’t cover his debts wholly from bribes or the sale of diplomatic posts for personal gain. Webster apparently regarded the merchants and bankers of Boston’s State Street Corporation – one of the country’s first financial holding companies – very much as George W. Bush regarded the high rollers he called “my base.” The great orator even sent a famous letter to financiers requesting retainers from them that he might better serve them. The historian Arthur Schlesinger Jr. wondered how the American people could follow Webster “through hell or high water when he would not lead unless someone made up a purse for him.”
No wonder the U.S. Chamber of Commerce feels right as home with the landmark designation of its headquarters. 1615 H Street now masterminds the laundering of multi-millions of dollars raised from captains of industry and private wealth to finance – secretly – the political mercenaries who fight the class war in their behalf.
Even as the Chamber was doubling its membership and tripling its budget in response to Lewis Powell’s manifesto, the coalition got another powerful jolt of adrenalin from the wealthy right-winger who had served as Nixon’s secretary of the treasury, William Simon. His polemic entitled A Time for Truth argued that “funds generated by business” must “rush by multimillions” into conservative causes to uproot the institutions and “the heretical strategy” [his term] of the New Deal. He called on “men of action in the capitalist world” to mount “a veritable crusade” against progressive America. Business Week magazine somberly explained that “…it will be a bitter pill for many Americans to swallow the idea of doing with less so that big business can have more.”
I’m not making this up.
And so it came to pass; came to pass despite your heroic efforts and those of other kindred citizens; came to pass because those “men of action in the capitalist world” were not content with their wealth just to buy more homes, more cars, more planes, more vacations and more gizmos than anyone else. They were determined to buy more democracy than anyone else. And they succeeded beyond their own expectations. After their 40-year “veritable crusade” against our institutions, laws and regulations – against the ideas, norms and beliefs that helped to create America’s iconic middle class – the Gilded Age is back with a vengeance.
You know these things, of course, because you’ve been up against that “veritable crusade” all these years. But if you want to see the story pulled together in one compelling narrative, read this – perhaps the best book on politics of the last two years: Winner Take All Politics: How Washington Made the Rich Richer and Turned Its Back on the Middle Class. Two accomplished political scientists wrote it: Jacob Hacker and Paul Pierson – the Sherlock Holmes and Dr. Watson of political science, who wanted to know how America had turned into a society starkly divided into winners and losers.
Mystified by what happened to the notion of “shared prosperity” that marked the years after World War II;
puzzled that over the last generation more and more wealth has gone to the rich and superrich, while middle-class and working people are left barely hanging on;
vexed that hedge-fund managers pulling down billions can pay a lower tax rate than their pedicurists, manicurists, cleaning ladies and chauffeurs;
curious as to why politicians keep slashing taxes on the very rich even as they grow richer, and how corporations keep being handed huge tax breaks and subsidies even as they fire hundreds of thousands of workers;
troubled that the heart of the American Dream – upward mobility – seems to have stopped beating;
astounded that the United States now leads in the competition for the gold medal for inequality;
and dumbfounded that all this could happen in a democracy whose politicians are supposed to serve the greatest good for the greatest number, and must regularly face the judgment of citizens at the polls if they haven’t done so;
Jacob Hacker and Paul Pierson wanted to find out “how our economy stopped working to provide prosperity and security for the broad middle class.” They wanted to know: “Who dunnit?”
They found the culprit: “It’s the politics, stupid!” Tracing the clues back to that “unseen revolution” of the 1970s – the revolt triggered by Lewis Powell, fired up by William Simon, and fueled by rich corporations and wealthy individuals – they found that ‘Step by step and debate by debate America’s public officials have rewritten the rules of American politics and the American economy in ways that have benefitted the few at the expense of the many.”
There you have it: they bought off the gatekeepers, got inside, and gamed the system. And when the fix was in, they let loose the animal spirits. turning our economy into a feast for predators. And they won – as the rich and powerful got richer and more powerful – they not only bought the government, they “saddled Americans with greater debt, tore new holes in the safety net, and imposed broad financial risks on workers, investors, and taxpayers.” Until – write Hacker and Pierson – “The United States is looking more and more like the capitalist oligarchies of Brazil, Mexico, and Russia where most of the wealth is concentrated at the top while the bottom grows larger and larger with everyone in between just barely getting by.”
The revolt of the plutocrats has now been ratified by the Supreme Court in its notorious Citizens United decision last year. Rarely have so few imposed such damage on so many. When five pro-corporate conservative justices gave “artificial entities” the same rights of “free speech” as living, breathing human beings, they told our corporate sovereigns “the sky’s the limit” when it comes to their pouring money into political campaigns. The Roberts Court embodies the legacy of pro-corporate bias in justices determined to prevent democracy from acting as a brake on excessive greed and power in the private sector. Wealth acquired under capitalism is in and of itself no enemy of democracy, but wealth armed with political power – power to shake off opportunities for others to rise – is a proven danger. Thomas Jefferson had hoped that “we shall crush in its birth the aristocracy of our moneyed corporations which dare already to challenge our government to a trial of strength and [to] bid defiance to the laws of our country.” James Madison feared that the “spirit of speculation” would lead to “a government operating by corrupt influence, substituting the motive of private interest in place of public duty.”
Jefferson and Madison didn’t live to see reactionary justices fulfill their worst fears. In 1886 a conservative court conferred the divine gift of life on the Southern Pacific Railroad. Never mind that the Fourteenth Amendment declaring that no person should be deprived of “life, liberty or property without due process of law” was enacted to protect the rights of freed slaves. The Court decided to give the same rights of “personhood” to corporations that possessed neither a body to be kicked nor a soul to be damned. For over half a century the Court acted to protect the privileged. It gutted the Sherman Antitrust Act by finding a loophole for a sugar trust. It killed a New York state law limiting working hours. Likewise, a ban against child labor. It wiped out a law that set minimum wages for women. And so on: one decision after another aimed at laws promoting the general welfare.” The Roberts Court has picked up the mantle: Moneyed interests first, the public interest second, if at all.
The ink was hardly dry on the Citizens United decision when the U.S. Chamber of Commerce organized a covertly funded front and rained drones packed with cash into the 2010 campaigns. According to the Sunlight Foundation, corporate front groups spent $126 million in the fall of 2010 while hiding the identities of the donors. Another corporate cover group – the American Action Network – spent over $26 million of undisclosed corporate money in just six Senate races and 26 House elections. And Karl Rove’s groups – American Crossroads/Crossroads GPS – seized on Citizens United to raise and spend at least $38 million that NBC News said came from “a small circle of extremely wealthy Wall Street hedge fund and private equity moguls”– all determined to water down financial reforms designed to prevent another collapse of the financial system. Jim Hightower has said it well: Today’s proponents of corporate plutocracy “have simply elevated money itself above votes, establishing cold, hard cash as the real coin of political power.”
No wonder so many Americans have felt that sense of political impotence that the historian Lawrence Goodwyn described as “the mass resignation” of people who believe in the “dogma of democracy” on a superficial public level but whose hearts no longer burn with the conviction that they are part of the deal. Against such odds, discouragement comes easily.
But if the generations before us had given up, slaves would still be waiting on these tables, on Election Day women would still be turned away from the voting booths, and workers would still be committing a crime if they organized.
So once again: Take heart from the past and don’t ever count the people out. During the last quarter of the 19th century, the industrial revolution created extraordinary wealth at the top and excruciating misery at the bottom. Embattled citizens rose up. Into their hearts, wrote the progressive Kansas journalist William Allen White, “had come a sense that their civilization needed recasting, that their government had fallen into the hands of self-seekers, that a new relation should be established between the haves and have-nots.” Not content to wring their hands and cry “Woe is us” everyday citizens researched the issues, organized to educate their neighbors, held rallies, made speeches, petitioned and canvassed, marched and marched again. They ploughed the fields and planted the seeds – sometimes in bloody soil – that twentieth century leaders used to restore “the general welfare” as a pillar of American democracy. They laid down the now-endangered markers of a civilized society: legally ordained minimum wages, child labor laws, workmen’s safety and compensation laws, pure foods and safe drugs, Social Security, Medicare, and rules that promote competitive markets over monopolies and cartels. Remember: Democracy doesn’t begin at the top; it begins at the bottom, when flesh-and-blood human beings fight to rekindle the patriot’s dream.
The Patriot’s Dream? Arlo Guthrie, remember? He wrote could be the unofficial anthem of Zuccotti Park. Listen up:
Living now here but for fortune
Placed by fate`s mysterious schemes
Who`d believe that we`re the ones asked
To try to rekindle the patriot`s dreams
Arise sweet destiny, time runs short
All of your patience has heard their retort
Hear us now for alone we can`t seem
To try to rekindle the patriot`s dreams
Can you hear the words being whispered
All along the American stream
Tyrants freed the just are imprisoned
Try to rekindle the patriot`s dreams
Ah but perhaps too much is being asked of too few
You and your children with nothing to do
Hear us now for alone we can`t seem
To try to rekindle the patriot`s dreams
Who, in these cynical times, when democracy is on the ropes and the blows of great wealth pound and pound and pound again against America’s body politic – who would dream such a radical thing?
Look around.
*Thanks to Charlie Cray for a succinct analysis of the Powell memo and to Jim Hoggan for calling attention to it more recently.
Bill Moyers is a special friend of Christian Ethics Today, a “lifetime subscriber,” contributor, and supporter. He is well known as for his work on Public Television and other venues. His new hour long weekly show, called “Moyers & Company,” will focus on one-on-one interviews with people not often heard on television, “thinkers who can help us understand the chaos of this time.” This address is published here with his permission.
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