Getting the Money Out of Politics: Two Essays

Hi all:

On July 8, I had two different essays published which address the role of money in politics.  One essay takes us along the history of how our campaign finance laws broke down, the other describes four fixes the president can take to act.  I have reprinted both essays in this blog.


“The Supreme Court, Public Opinion, and Money and Politics,” DEMOS Policy Shop, July 8, 2015
http://www.demos.org/blog/7/8/15/supreme-court-public-opinion-and-money-and-politics\

“A Federal Court Just Threatened Citizens United,” Talking Points Memorandum, July 8, 2015
http://talkingpointsmemo.com/cafe/federal-court-citizens-united


The Supreme Court, Public Opinion, and Money and Politics, DEMOS Policy Shop, July 8, 2015

Is it a problem when the Supreme Court is out of step with public opinion? While in many cases
the answer is no, when it comes to the question of money and politics and the financing of
campaigns and elections, its counter-majoritarianism is a threat to democracy.

Contrary to the belief of many, American politics is not simply a majority rule, winner-takes-all
system. As designed by the Framers in 1787 and modified by the Bill of Rights, America’s
constitutional democracy is one of majority rule tempered by minority rights. James Madison’s
famous Federalist Paper number 10 discusses the dangers of majority faction, describing how
the complex machinery of checks and balances and separation of powers is meant to restrain
majority faction. Majorities generally get their way on most issues, but when it comes to the
right to free speech for example, no majority gets the right to tell a minority what they get to
say or think.

The American constitutional system contains numerous anti-majoritarian institutions to protect
minority rights. The Supreme Court serves an important role in protecting minority rights,
often at the expense of being counter-majoritarian. But that counter-majoritarianism facilitates
America’s constitutional democracy, protecting minority rights and preventing a majority from
using its numbers to entrench its power.

Yet the Supreme Court’s counter-majoritarianism does not always enable democracy—
sometimes it can inhibit it. Consider the issue of the role of money in politics. A June 2, 2015
New York Times survey found that 84% of the American public believes money has too much
of a role in American politics and that majorities (or near majority with Republicans) do not
believe that money given to candidates is a form of protected speech. The Supreme Court,
especially under Chief Justice Roberts, in giving increased First Amendment protection to the
use of money for political purposes in cases such as Citizens United v. F.E.C. and McCutcheon v. F.E.C., is out of step with public opinion.

Yes, critics may argue that polls such as this are meaningless or that the Court is doing no
more than protecting unpopular speech. But what is going on here is not about regulating
content or viewpoint expression or suppressing unpopular groups or oppressing discrete and
insular minorities. What we see here instead is the public describing how they think the
American politics process should operate, and such views do deserve significant deference.
Once I had the pleasure of meeting with former Watergate special prosecutor Archibald Cox
who stated that election laws were the “rules that determined the rules of game.” By that he
meant that the rules of election law, including how money could be spent for political purposes,
determined how the game of politics and democracy would be played. Decide these prior rules
and they determine the latter. His point is simple—there are important values that a democracy
must articulate and enable. Our Constitution sets the ground rules for ordinary politics,
including how campaigns and elections are to be run and funded.

What the public is saying is something simple—the First Amendment has not enshrined money
as a constitutional value defining how political power should be allocated. In his famous 1905
dissent in Lochner v New York, Justice Holmes was famous for declaring the Constitution does
not “embody a particular economic theory.” There he rejected the idea that laissez faire
capitalism was a constitutional theory. Here, the public is making a similar point that neither the
Supreme Court nor critics of campaign finance reform understand. There is an important
difference between the use of money as a constitutional value and its use as a market tool.
Money may be an appropriate medium for financial exchange to buy consumer goods, but it is
not an appropriate constitutional value to distribute political power, influence, and authority.
American politics is “one person, one vote,” not “one dollar, one vote.”

There is a profound difference between politics and markets. Each has their own logic and
values, and operates by different mechanisms. American politics is about equality, respect for
minority rights, public accountability, and transparency. The ability to expend unlimited
amounts of money is not one of the constitutional values that define how American politics
should operate. But even if it is, it must be viewed and balanced in context of all the other
competing values.

This is what the American public is saying in the New York Times survey. They better
understand than the Supreme Court right now that money is not a legitimate tool that should
be the final word driving how decisions are made in American politics. Money cannot be both a
political means and end or value in politics. Campaign finance laws not only protect money
from drowning out minority voices, but also prevent the entrenched few from using their
resources to thwart majority rule. Viewing money and campaign finance laws this way shows
how out of touch the Supreme Court is here in terms of both public opinion and in facilitating
democracy.


“A Federal Court Just Threatened Citizens United,” Talking Points Memorandum, July 8, 2015

Yesterday, the U.S. Court of Appeals in Washington ruled 11-0 that a ban on federal campaign contributions by individuals who contract with the government is constitutional. After a wave of controversial decisions by Supreme Court that have unleashed a flood of big money into politics, this appeals court decision sends a clear message: Sometimes, more money in politics can be a very bad thing.

Americans agree. According to a poll from the New York Times, some 85 percent of the American people believe that the way political campaigns are funded needs either "fundamental changes" (39 percent) or "a complete rebuild" (46 percent).

Money has become central to American politics. Spending in the 2016 presidential election alone could top $4 billion, with the winning candidate having to raise $1.5 billion.

How did we get into this mess? In 1974, after the Watergate scandal brought down Nixon, Congress established limits on how much people could give and how much politicians could spend on their campaigns, and mandated disclosure to ensure that regular citizens could “follow the money.”

Unfortunately the Supreme Court blew a hole in the 1974 law right away. In Buckley v. Valeo, the Court eliminated campaign spending limits. With no limits, a fundraising arms race began which continues to this day.

Building on Buckley, John Roberts’ Supreme Court has largely gutted most of the post-Watergate reforms. In Citizens United v. FEC the Court not only struck down a law regulating independent expenditures but it also freed up corporations to spend unlimited money directly to influence elections. In McCutcheon v. FEC it voided aggregate contribution limits to federal candidates, ruling that the $123,000 cap on how much one individual could contribute violated the First Amendment. Both decisions were done under the belief that the use of money for political purposes is protected speech.

The Supreme Court has not acted alone. Candidates and special interest groups have exploited legal ambiguities and used tax-exempt non-profit legal shells for political purposes to escape contribution limits and disclosure rules. Groups are challenging other laws, anticipating that the Roberts Court will eventually strike them down, too.

The result is twofold. First, groups and candidates are flouting any remaining regulations, leading to a dramatic growth in unregulated and undisclosed spending, especially since Citizens United.

Second, special interest money has pushed the Democrats to the left and Republicans to the right, preventing bipartisan problem-solving on issues across the board.

So can anything be done?

Actually, yes. All hope is not lost. And yesterday’s court decision is a step in the right direction. America need not wait for Congress or the Supreme Court to come around. The president and various federal agencies have the power to make several small but important reforms. Here are four:

1) The president could issue an executive order to require federal contractors to disclose all political contributions they make and to bar contractors from bidding on federal contracts for two years if they spend too much to influence a federal race or a member of Congress.Yesterday’s ruling upholds a ban on individual “pay to play” contributions to prevent conflicts of interest or undue influence. A new order could build on that ruling.

2) The Securities and Exchange Commission could make a rule requiring publicly traded companies to disclose all expenditures of money for political purposes and to obtain shareholder assent to use money for these purposes.

3) To reduce candidates’ need for costly commercials, the Federal Communications Commission could issue require that broadcasters to provide reasonable free air time to all House, Senate, and Presidential candidates. The public owns the airwaves, so there is nothing to stop the FCC from doing this.

4) The IRS could require that non-profits whose major purpose is political advocacy register with the FEC and disclose their donors and expenditures.

These reforms are not enough, but they show that something can be done now—and they would give us the tools we need to better understand the money flooding our political system. That knowledge is a critical first step that will build the case for overturning Buckley and Citizens, and, ultimately, healing our democracy.

Postscript:  Two additional points.  The first is that if I had to make one change in the TPM essay it would be to say that big money has less so moved Democrats to the left than either to the right or simply the money has entrenched their positions and made it impossible for the party to respond to the left.  Second, back in 2010 Senator Al Franken's  legal counsel had contacted after Citizens United was decided.  I was asked to offer suggestions on what could be done.  I related a variation of the above four ideas to counsel.  A few weeks later I called back to ask what happened.  I was told that the Senator liked my suggestions and communicated them to President Obama, who simply decided not to do anything.

Amend the Constitution to restore the democracy the Roberts court killed

Please note:  This essay originally appeared in The Hill on August 29, 2013.


Money is not speech. Corporations are not persons. Most of us intuitively understand that. The Supreme Court clearly does not. In Citizens United v. FEC, it ruled that corporations have a First Amendment right to expend unlimited amounts of money to influence elections. More recently, in McCutcheon v. FEC they struck down the overall caps on how much money wealthy individuals can contribute directly to campaigns and to party committees. The Supreme Court’s decisions are wrong and they deserve to be overruled with a constitutional amendment to restore the First Amendment to its rightful place protecting American democracy, instead of as a tool to suppress speech rather than enhance it.          

Some will object that we should not amend the First Amendment, that it is fine the way it is. However, the Supreme Court's recent decisions have twisted the meaning of that Amendment from supporting democracy to privileging it for the few.  The Supreme Court has been wrong in the past and they have been corrected with constitutional amendments and laws. This is called checks and balances.


A century ago reformers such as Teddy Roosevelt rued the rise of wealthy corporations and individuals corrupting American politics. Supreme Court Justice Louis Brandeis stated:  "We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both."  Thus was launched a battle against the undue influence of wealthy special interests that included anti-trust laws, bans on corporate political activities, progressive taxation, and campaign finance reform legislation. The Richard Nixon Watergate abuses produced more reforms, including public financing of elections, disclosure laws, and political contribution and expenditure limits.          

But beginning with the 1976 Supreme Court decision Buckley v. Valeo, wealth fought back.  The Court ruled that limits on how much money candidates, groups, and wealthy persons could spend were unconstitutional.  The Supreme Court under Chief Justice Roberts continued to hack away at efforts such as McCain-Feingold to limit the power of money in politics. Citizens United and McCutcheon are only the most recent examples of how the Court is letting money and privilege entrench itself, preventing the political system from functioning. The gridlock in Congress and rising inequalities across America are the result.          

The First Amendment under the Roberts Court has become a tool to suppress speech rather than enhance it.  The First Amendment free speech clause is not meant to be a right for one or the few but for all. It is recognition that in a society all of us have a right to speak, and to do that, as in any social situation, there are rules of communication that make a conversation possible. There is no way that a rule that says all of us have an unlimited right to shout is viable; at some point, one has to understand that the First Amendment rights of some have to be read or understood in light of the rights of others. The right to free speech cannot be interpreted in such a way that the rights of a few can suppress the free speech rights of others. As philosopher John Rawls once declared:  “[E]ach person is to have an equal right to the most extensive basic liberty compatible with a similar liberty for others.” Rights to free speech must be read within a social context of like liberty for all.  Citizens United, McCutcheon, and its defenders fail to recognize this principle.          

Money should not be a factor determining who holds political power, what bills are passed, and how elections are run. The issue is not only whether money buys influence or corrupts. It should be whether money should at all be the criteria by which political power or influence is allocated, and whether the First Amendment should shield such privilege.          

Justice Rehnquist, dissenting in First National Bank of Boston v. Bellotti, recognized the illegitimate drive of corporations to want to convert their economic resources into political power.  He declared: “It might reasonably be concluded that those properties, so beneficial in the economic sphere, pose special dangers in the political sphere.” And in Federal Election Commission v. National Right to Work Committee, the Court quoted the federal government’s brief in that case that the purpose of limiting money in politics was “to ensure that substantial aggregations of wealth amassed by the special advantages which go with the corporate form of organization should not be converted into political ‘war chests’ which could be used to incur political debts from legislators who are aided by the contributions.”           

What these comments from the Supreme Court suggest is a recognition by it at one time that money used for political purposes needs to be limited. Politics in general, and campaigns and elections in particular, may be expensive and money may be necessary to run campaigns and elections, but their costs or funding sources should not undermine democratic values. The problem with Citizens United and McCutcheon is that five Justices radically departed from past precedent and failed to understand how a democratic system derives its legitimacy from political equality. Money and wealth should not rule in American democracy; it should be real people, all the people. Previous Supreme Courts understood this, but not the Roberts Court.  This is why we need a constitutional amendment — to restore democracy to America.

The Lessons of McCutcheon: The First Amendment as Thuggery

Since when did the First Amendment become a tool of thuggery to suppress speech rather than enhance it?  This is essentially what the Roberts Supreme Court did in the recent McCutcheon v F.E.C.  decision striking down aggregate political contribution limits.
    At the core of the McCutcheon  is the argument that all individuals have a right to expend unlimited money for political purposes.  Because of that right, federal laws that overall limit individuals to contributing approximately $123,000 per year to candidates and political parties violated  their right to free speech.  Who knew that such a cap was so suppressive and chilling of  free speech? At least this is what the Roberts Court wants us to believe.  We should all rejoice in our new found freedom to spend as much as we want to affect the political process.  Yes, now the rich  and poor equally have the right to spend more than $123,000 per year for political purposes much in the same way that writer Anatole France once said that the rich and poor were equally free to sleep under the bridge.
    That is false sense of equal rights is one of several points that the Roberts Court misses in McCutcheon.  The rich and poor may equally have the same right to spend unlimited amounts of money, but the reality is that only the rich shall be able to use this right.  For the other 99.9% of the population, McCutcheon has nothing to do with rights.  It does not mean that your tired, your poor, your huddled masses yearning to breathe free, will spend more.  No, it only means a few will do so because they will be able to.   This is what defenders of  McCutcheon either fail to see, or which they see clearly and embrace the decision because of its implications to favor their views.
    The shallowness of the McCutcheon argument lies in a misguided notion of what the First Amendment free speech clause is supposed to be about.  While of course John Stuart Mill wrote long after the Founding Fathers penned the First Amendment, his On Liberty remains perhaps the single best defense of free speech.  Free speech is necessary not simply to express ourselves, but to gather and circulate the information necessary to make informed political choices and to make democracy and the search for truth possible. Free speech is not a silencing tool but an invitation to dialogue, a declaration that were only one side to speak then it would shield dogma and invite censorship. As Mill stated: ”There can be no fair discussion of the question of the usefulness (of an idea) when an argument so vital may be employed on one side, but not on the other.”  It takes at least two to have a conversation; one person shouting at another  is not free speech it is intimidation.
    The First Amendment free speech clause is not meant to be a right for one or the few but for all.  It is recognition that in a society all of us have a right to speak, and to do that, as in any social situation, there are rules of communication that make a conversation possible.  There is no way that a rule that says all of us have an unlimited right to speak is viable; at some point one has to understand that the First Amendment rights of some have to be read or understood in light of the First Amendment rights of others. The right to free speech cannot be interpreted in such a way that  the rights of a few can suppress the free speech rights of others.  As philosopher John Rawls once declared:  “[E]ach person is to have an equal right to the most extensive basic liberty compatible with a similar liberty for others.” Rights to free speech must be read within a social context of like liberty for all.  McCutcheon and its defenders fail to recognize this principle.
    At one time the Supreme Court recognized it.  In cases such as  Burson v Freeman the Court was confronted with conflicting First Amendment rights when it ruled that states could impose a ban on political advertising within one hundred feet of a polling place.  Here there were contending  free speech rights–to vote and to engage in political advertising–and it was impossible to allow for  both in absolutist fashion.  To allow an absolutist position for both rights probably would have meant neither were possible.  Contending rights of differing individuals have to read or understand in ways that respect the rights of both.  Similar tradeoffs or balancing of rights were made in Red Lion Broadcasting v. Federal Communication Commission where the fairness doctrine was upheld, ruling that the free speech rights of broadcasters must be balanced against the first Amendment rights of the public.  The same was true in Smith v. Alwright, where the Court ruled that the First Amendment associational rights of parties had to be balanced against the rights of individuals to participate in politics.
    McCutcheon, along with the 2010 Citizens United v. Federal Election Commission decision allowing corporations to expend unlimited money for political purposes, ignores the social context for free speech rights.  These decisions privilege the rights of the few at the expense of others.  Even worse, they assume that everyone has an unlimited right to speak and that this speech includes the expenditure of money.  It forgets an old adage many of us learned when we were growing up–My right to extend my arm goes no further that your face. 
    McCutcheon crabbed absolutism seems to assume that everyone has a right to spend unlimited amounts of money, even if that means that some have a right to drown out of suppress the free speech rights of others.  That is what McCutcheon will do.  Its impact will be to give some a  megaphone to speak, serving a a sledgehammer to silence others.  The First Amendment free speech clause was never meant to be a bullying tool or an instrument of thuggery but that is what the Roberts Court did in deciding that the rich and poor equally have the right to spend unlimited amounts of money for political purposes.

Beyond Citizens United: Fixing the American elections system

Note:  Today's blog originally appeared in Minnpost on November13, 2012.

In post-election statements, both Sen. Amy Klobuchar and Rep.-elect Rick Nolan called for campaign finance reform. They singled out the role of big money and negative ads in campaigns, demanding among other things, an overturning of the Supreme Court's 2010 Citizens United v. Federal Election Commission. Campaign-finance reform is needed, but the American election system is broken, demanding even broader changes beyond reversing Citizens United. These changes extend to the role of money in politics, voting, and the quality of political debate and information.

Money and politics

Citizens United is one of many Supreme Court decisions that try to define the role of money and speech in American elections. Concern that money corrupts the political process goes back to the 19th century. Beginning in 1907 with the Tillman Act, federal law made it illegal for corporations to make direct political contributions to candidates for federal office. In 1947 the Taft-Hartley Act did the same for labor unions.

Many states have similar laws. The concern, especially with corporations, as Chief Justice Rehnquist once stated in First National Bank of Boston v. Bellotti (1978) is that the government might reasonably fear that a  "corporation would use its economic power to obtain further benefits beyond those already bestowed."  The task is now to prevent the conversion of resources amassed in the economic marketplace from corrupting the political marketplace.

What Citizens United actually did was to say that corporations (and unions) have a First Amendment right to make direct expenditures from their treasuries to make independent expenditures to advocate for the election or defeat of a candidate for office. The decision did not overturn the ban on direct contributions to candidates, but it overturned laws  that made it illegal for corporations to spend money independently to support a candidate for office.

Is Citizens United responsible for the $6-8 billion election cycle spending that just concluded? Yes and no. Prior to Citizens United, corporations already had lots of ways of getting around the law. They could do issue ads that attacked candidates but did not expressly urge their election or defeat. They could set up political action committees. They could fund get-out-the-vote, voter-registration, and voter-education programs. Individual corporate officers could give money. There were many ways around the law.

Citizens United did not necessarily mean that more money would go into elections; instead it meant that money would enter in different ways and with less transparency. Given that it was illegal for corporations to make express advocacy independent expenditures before Citizens United, when the Supreme Court declared that ban unconstitutional there were no laws in place to force corporate disclosure.  The intensity and closeness of the 2012 elections probably explains how much money was spent; Citizens United tells us about why, in part, we do not know who spent it.

In addition the Citizens United decision was built upon in a 2010 Court of Appeals decision, SpeechNow.org v. Federal Election Commission, that allowed for the creation of Super PACS that could accept unlimited political donations from corporations, unions and individuals to engage in independent expenditure express advocacy. With limited disclosure and often innocuous sounding names, these groups provided another outlet for money.

Finally, the transparency problem with money was exacerbated in 2012  by the misuse and hijacking of nonprofits. Basically, there are two types of nonprofits under the federal tax code. Entities classified as 501(c)(3)s are prohibited from engaging in partisan politics as a condition of donations to them being tax deductible. But contributions to nonprofits classified as 501(c)(4)s are not tax deductible, and they may engage in partisan politics  and endorse candidates for office so long as that political activity is not a major purpose of their activity.

There is extremely limited disclosure required on nonprofits in terms of donors, and there are no contribution limits to them. Corporations and wealthy donors used them as laundering mechanisms to escape disclosure requirements.

So what could be done on campaign finance? More disclosure is needed and efforts to pass the Disclose Act to force that is a first step. But partisan opposition to it in Congress has prevented that. Overturn Citizens United? That requires a constitutional amendment and that means two-thirds vote of both the House and Senate and ratification of three-fourths of the states. Little chance there. The Supreme Court could reverse itself, but unless President Obama can replace a conservative Supreme Court Justice, that option, too, looks unlikely.

Yet President Obama could act on his own to mitigate some of the problem. He could issue a procurement rule barring corporations from making express advocacy independent expenditures  above a certain dollar amount as a condition of bidding on federal contracts.  Here the issue is about conflict of interest.

Additionally, he could direct the Securities and Exchange Commission to engage in rule-making to require shareholder assent before expending money for political purposes. The issue here is protecting the First Amendment rights of shareholders not to have their money spent for political causes they do not support.  This rule would parallel those already found with unions and their members.

Third, Congress could change the tax code to require more disclosure for nonprofits that use money for political purposes. The president alone might also be able to direct the IRS to do that.

Voting

The defeat of the voter ID amendment is a rare victory in the battle to fight the second great wave of disenfranchisement in American history. The first wave was after the Civil War and when  Reconstruction ended. It ushered in the Jim Crow era and a 100-year effort to prevent African-Americans from voting.

Voter ID, based on the erroneous claim of widespread voter fraud, is one part of this disenfranchisement. Across the United States in the last few years many states have enacted voter ID and other laws such as cutting back on early voting and restricting voter registration  drives. Pre-election voting-rights litigation was significant in 2012. The United States effectively has 50 different state laws regarding voting. Were it not that Obama won the 2012 presidential race so decisively, problems this year in Florida would be holding up the election results yet again.

One solution is to use federal voting rules and procedures. The Constitution gives Congress the authority to regulate federal elections. Congress could construct rules regarding voter eligibility, ban voter ID, allow for early voting, or whatever else it wants to do. Uniformity and fairness across states in elections too.

Political speech and rhetoric

The final critique is that political campaigns have become too negative and nasty. Maybe. They are tame by comparison to the 19th century. But there are limits regarding what can be done to regulate political speech.  The Supreme Court correctly in its 1964 New York Times v. Sullivan gave broad First Amendment protection to speech that criticizes public officials and candidates. A free society should encourage robust political debate, and it should be the people and  not judges or government officials who decide what is true. Moreover, attack ads will continue to be used so long as they are effective and voters respond to them.

The bigger problem now is that voters have developed partisan choices when it comes to the consumption of news. The world is increasingly divided between FOX and MSNBC. It seems all of us want our own truth now. The rise of the new and social media has done little to encourage voters to seek out alternative information.

One solution to this would be to reinstate the fairness doctrine and vigorously enforce the equal time doctrine, requiring television and radio to offer opposing viewpoints. The public has a First Amendment right to a diversity of viewpoints and broadcasters, as a condition of holding a license, should be required to honor this.

Overall, Klobuchar and Nolan are correct that the American elections system is a mess.  But the causes are varied and the fixes more complex than they realize.

Progressive Politics in the Age of Conservatism

Face it–progressive politics in America looks dead.

No, not socialism, that’s been dead almost from the beginning in the United States. Although during the height of the recent recession a Rasmussen poll found only 53% of the population lacked preferred capitalism to socialism. Yet there generally seems little support for workplace democracy and significant public ownership of state owned enterprises that are profitable and run for the benefit of the public. America’s version of government ownership is to take over ailing and unprofitable enterprises such as the auto industry or banks, pump billions if not trillions of public dollars into them, and then return them to private control just as they become profitable again. This is not socialism–it is corporate welfare.

The progressive politics that looks dead is good old-fashioned economic liberalism. This is not Bill Clinton liberalism that supported NAFTA and welfare reform and which Mitt Romney recently warmly embraced as the kind of Democratic Party politics he liked. Instead, the progressive politics that appears dead is that of Lyndon Johnson, John Kennedy, Franklin Roosevelt, and even Teddy Roosevelt. It is about the Great Society and the New Deal. It is about redistributive politics that sought to raise those at the economic bottom, narrow the gap between the rich and poor, and wrestle control of political power in the United States from corporations and plutocrats. It was a commitment to believing that the government had an important role in make sure we had a nation that was not one-third ill-fed, ill-clothed, and ill-housed, that kids should not go off to school hungry, and that corporations should not have the same rights as people.

But if Bill Clinton’s presidency did not kill off this type of progressive politics, surely Barack Obama has.  If Obama did not do it directly, he did so indirectly with the 2010 backlash against him that has done more to kill progressive politics than can be imagined.

Look at where American politics is today. A 2009 Gallup poll pegged 40% of the population as describing themselves as conservative, nearly twice the 21% labeling themselves as liberal.  In 2010 the numbers were 42%-20% conservative and liberal, and one can only speculate what they are today after the November, 2010 electoral rout of Obama and the Democrats. Since then Republicans have  taken effective control both in Washington, St. Paul, and across the country. Obama is practically immobilized by the TEA Party, Mark Dayton gets nothing his first year in office then supports corporate welfare for the billionaire Vikings owner.  Across the country in places such as Wisconsin Governor Walker stomps on union rights and may well be the first governor in history to survive a recall election. Yes unions did win some victories in Indiana and elsewhere, but they are on the defense.

Progressives are on the run everywhere. It is not just on matters of public policy such as with taxes, government regulation, and health care, but also in the rhetorical battle for the hearts and minds of the people. You can’t even call yourself a liberal anymore without being red baited. Thus the reason for switching to the term progressive. Conservatives have successfully labeled as left or socialist anyone who does not agree with them. During the Republican primaries Bachmann called fellow party members “frugal socialists.”

Watch cable news (not just FOX) or surf the web, crack pop conservative ideas dominate. Ron Paul pleads for a return to the gold standard, Michelle Bachmann blames Obamacare and Wall street reforms for the crash in the economy (even though neither have really taken effect for the most part). The recession of 2008 is the fault of the government and not greedy bankers and speculators, Keynesian economics to stimulate the economy is wasteful, consumer protection is bad for business, and the Supreme Court’s Citizens United expanding corporate free speech rights to dump unlimited money into the buying of elections is good.  Oh, and vaccines cause mental retardation and global warming does not exist. Main stream media seems afraid to put real progressives on the air and what passes as progressive on MSNBC is watered-down and defensive.

How did it happen?  There is no one cause but there are several reasons. First, what Obama and progressives have failed to do is craft a narrative supporting their views. Tea Party activists and conservatives have the narrative of individual freedom–markets are good and government is bad. Government suppresses personal freedom and markets promote it.  Never mind that corporations tell more people what to do with more of their life at work than the government ever does or could. That’s corporate freedom. Conservatives have made free choice their buzz word and equality a dirty one.  Progressives have no overarching rhetoric and narrative to support their world view. “Hope” and “change” may be great election slogans but they do nothing for governance. The closest one has to a progressive narrative out there is from Occupy Wall Street about the “other 99%.” Yet OWS is so fragmented it lacks a central policy message upon which one could govern. Progressives need a winning narrative that appeals to Americans and which dictates a governing philosophy.

Second, Obama was not really a liberal but his rhetoric looked it. He ran promising change. The reason why so many are disappointed in him is not that he was too far left but that instead he failed to deliver on his lofty promises. At inauguration Obama had a window to change America but he flinched. Carpe diem was not his motto.

Third, progressives lack guts to fight. Look at Obama last year during the debt deal stand off or Dayton and the government shutdown. Both finally caved in. Why? Democrats (and one should not confuse the party with progressivism) believe that they are the caretakers for government. They believe that they need to be responsible and not run the risk of shutting the government down for fear of how it would ruin the economy or hurt people. But conservatives know this and take advantage of the Democrats willingness to blink. But by blinking the Democrats are screwing over poor people and the economy slowly by giving ground one inch at a time and they seem unable to recapture it. Until Democrats fight and show conservatives they are willing to shut the government down and hold conservatives responsible they will never win. Missing is the courage of their convictions.

Fourth, conservatives understand how to make structural reforms and policy changes that both benefit their supporters and enhance their power. Tax cuts and cuts in regulation are simple ways to benefit supporters, but there is more. Voter ID disempowers their opposition, attacking union rights undercuts labor support for Democrats and opposition to business in the workplace, and gutting regulations on money in politics strengthens corporations and rich individuals. Obama’s biggest mistake in his first two years was his failure to act accordingly. Instead of health care reform he should have used his sizable majorities in Congress to support the Employee Free Choice Act to strengthen unions, adopt national legislation banning voter ID and permitting day of election registration in federal elections, and adopting real Wall Street and bank reforms that would have limited their power, including reauthorizing Glass-Steagall.

Moreover, Obama should have first done something to help homeowners and workers get their houses and jobs back. Reward supporters up front and they are with you for life. Furthermore, when the Supreme Court issued Citizens United Obama could have issued an executive order barring corporations from bidding on federal contracts if they make political expenditures.   Or he could have ordered the Securities and Exchange Commission to issue rules requiring shareholder assent before companies make political expenditures. Finally, to break the back of conservative news he could have embraced a reinstitution of the Fairness Doctrine to require the media to offer diverse view points. But he did not do any of this? Why?

This is the last problem. Democrats now feed at the same trough as Republicans. Obama took more money in 2008 from Wall Street than any other presidential candidate in history. Democrats are increasingly as dependent on big corporate and individual donors as Republicans and just as bought and paid for.

Progressive politics is dead so long as it is married to the current Democrat Party. Progressives need their own Tea Party revolution on the left–one that engineers a new rhetoric and takeover of the party. One that is not willing to play it safe and worry that if a few Democrats lose  that means the Republicans win. It means a willingness to fight for what you believe in. This is what progressive politics needs to be in the age of conservatism. Dead men don’t fight or win.

America Beyond the 2012 Elections: What the candidates should be discussing

Groucho Marx declared that any club that would have him as a member he would not want to join. His sentiment perhaps captures my attitude toward presidential candidates–anyone who wants to be president I would not want to support! The reason is that with America’s problems so pressing, anyone who wants the job or thinks they have easy solutions to the difficult problems is probably a fool and should not be president.

The same is true this year. While the presidential primary and now general election seem again mired in social issues, the tough issues facing America are left untouched or inadequately discussed.  Yes, there are concerns about the solvency of Social Security and other entitlement programs, and the economy and gas prices loom large, yet there is little serious debate about how to solve these issues, whether the president even has the power to do anything, and also little discussion about a range of other pressing concerns that need to be addressed. Regardless of who wins in November, consider some of the pressing issues that need to be confronted but which are being ignored.

Obama faces an economy where the best projection is of high unemployment and low economic growth. But there is more. Home values remain about 25% or more below what they were in 2008, consumer and now student debt is high, and many people have already blown through their unemployment benefits and face an uncertain future. Consumer confidence remains near historic lows, suggesting little chance that retail sales and spending for the coming holidays and into next year will revive the economy. The public just does not believe the country is headed in the right direction (61% say in the wrong direction) and few think we are better off now than four years ago.

However, in recent months the American economy appears to be recovering. The unemployment rate is steadily decreasing, the stock market is at pre-2008 levels, and the housing market appears to be stabilizing This has brought a shift to three other domestic issues—gas prices, debt, and social issues. In 1980 rising energy prices due to two embargoes by oil producing countries had an impact on President Jimmy Carter’s election loss to Ronald Reagan. In 2012 projections are that gas prices may increase from approximately $3.00 per gallon to perhaps $5 by July. These rising prices are already causing a potential worry in terms of their impact on the US economy, and they are the subject of political criticism by Republican presidential candidates who are blaming Barack Obama for the increases.

American Decline?
A second domestic issue is the American budget deficit. The current budget deficit for fiscal year 2013 is projected to be nearly $980 billion with overall nation debt estimated at $15.6 trillion. This debt is a concern for many reasons, some of which is over worry that the United States cannot continue to finance it budget deficits by borrowing. Continued long term US debt affects its credit rating and ability to borrow money from sources, some of which are international. Efforts to reduce the debt and budget deficit potentially have an impact on defense spending and there are some discussions regarding how this might affect US military might. Paul Kennedy describes how one threat to the United States may be that its declining economic strength may compromise its ability to maintain its international military supremacy or standing in the world as it loses it capacity to maintain both hard (military) and soft (economic) hegemony.

Former national security advisor Zbigniew Brzezinski writes in his new book America and the Crisis of Global Power that the budget deficit, an unstable financial system, decaying infrastructure, growing economic equalities, and partisan politics threaten America’s national security and international standing. In many ways his arguments echo what Paul Kennedy had asserted 25 years ago in his influential 1987 "The Rise and Fall of the Great Powers" that the declining economic stature of the United States could have a significant impact upon its geo-global standing. Both books powerfully connect domestic politics to national security and assert that the country must confront certain realities. Yet unlike when Kennedy wrote it appeared America had bipartisan capacity to act, Brzezinski sees the very polarization of our political system as a strategic liability, standing as impediment to solving the other problems that exist.

This polarization affects the capacity to govern. Samuel Huntington and others were roundly criticized over a generation ago for asserting that America faced a governability crisis. Yet now he seems prescient. The list of problems confronting the American political system is endless. There is the growing polarization of the political parties that makes compromise near impossible. Add to that the personalization of political attacks that render compromise after election difficult. But there is also the growing disaffection of the public from the two major parties, the inability of the Democrats and Republicans to escape capture by special interests, the impossibility of the an opportunity for minor parties to emerge. Polls increasingly point to large majorities of the American public expressing dissatisfaction or distrust with Congress and the government overall, and while money in politics has always been a problem, the Supreme Court’s decision in Citizens’ United v Federal Election Commission has exacerbated the impact that wealthy donors and corporations have on the political process. Political scientist E.E. Schattschneider wrote more than 50 years ago that America was in danger of becoming the largest aristocracy in world where political power was stratified by wealth, race, and gender, and that has largely come to be.

But the political divisions are a consequence of another real problem America must confront—the growing gap between the have and have-nots. Mounting evidence demonstrates that the United States has the largest gap between the rich and poor this country has experienced since the 1920s. Since the 1970s repeated studies document declining social mobility for the poor and middle class and a nation where the rich have done will and the rest have not. The United States fares poorly in comparative statistics on equality and mobility compared to other developed countries. The reality is that there is a significant class divide in this country, affecting political engagement, life prospects, health, and a host of other issues.

Domestic Policy: Infrastructure, Health Care, and Gas Prices
Another issue is America’s crumbling infrastructure. It now seems a distant memory that in 2007 a bridge collapsed in Minneapolis. For a few days infrastructure was the word of the day. “Infrastructure” is not a sexy word. Nor is it the type of word that most of us use in everyday conversation, until the Minnesota bridge collapsed. Yet infrastructure—a short hand way of referring to America’s bridges, roads, highways and sewer and water pipes—is important to our everyday lives. Without the basic infrastructure of roads we would never get to work, to school, or go shopping. Without it we could not cross rivers, drink water, or flush our toilets. In 2007 the American Civil Engineering Society estimated a need of at least $2.2 trillion to revitalize America’s aging infrastructure. While no additional bridges have fallen, the aging American infrastructure costs the economy billions in lost competitiveness.

The American health care system is a mess. The United States currently spends nearly 18% of its GDP on health care, far greater than the 10-12% spent by other developed countries. Spending will only grow as the Baby Boomers age. The United States does not have universal coverage and 44 million plus lack basic coverage. Health indices such as infant mortality, life expectancy, and obesity rates compare unfavorably to other nations. Obama’s health care act may not have been an ideal solution, but it tried to do something.  Republican Party repeal or Supreme Court invalidation of the health care act and return to a free market solution will fail to address the problem.

Short term rising gas prices are a problem but the longer term issue is that this country remains wedded to a low cost hydrocarbon economy that is not sustainable. Demands to frack or drill more will do little to depress long term energy prices as worldwide demand increases. In fact, statistical evidence demonstrates that America’s increased production over the years has had little impact on decreasing energy prices. Unlike Germany which is moving rapidly into alternative energy sources, or Europe in general which has adjusted to higher prices, the American economy is not prepared for a new energy future.

Finally, there are significant educational and demographic changes that America needs to face. Educationally, America’s students underperform compared to those in most other developed countries. It is not that teachers are not teaching but that our school system represents a horse and buggy era far too slack on math, science, and other standards. Americans still think that second languages are unnecessary, and ignore the ways that poverty and racism affect learning and outcomes. Demographically, we face a more diverse yet aging society. Future workers will have to support an aging population and these new employees confront a high-tech world where they may not have the skills to compete on a global scale.

All of the above described problems are dire and require money to fix them. This list does not even include the environment and global warming, but the last problem America faces—its budget deficit, as noted—may make that impossible. Continued long term US debt affects its credit rating and ability to borrow money from sources, some of which are international. Efforts to reduce the debt and budget deficit potentially have an impact on defense spending and there are some discussions regarding how this might affect US military might. Both Paul Kennedy and Brzezinski, as noted, describe how one threat to the United States may be that its declining economic strength may compromise its ability to maintain its international military supremacy or standing in the world as it loses it capacity to maintain both hard (military) and soft (economic) hegemony. Together they and others see a need to address the long term fiscal health of the country but alas, the growing political polarization of the United States places a solution beyond immediate grasp.

Foreign Policy
So far in 2012 foreign policy issues have been secondary concerns this year. The United States formally withdrew from Iraq in 2011, leaving this issue as a minor concern for most. However, the United States still has troops in Afghanistan and there are some who criticize President Obama’s intention to phase out the military commitment there.

The Middle East in general is perhaps the primary foreign policy concern for the United States. There is concern over Iran’s nuclear ambitions, defense of Israel, and the latter’s potential bombing of Iran to prevent its access to nuclear weapons. The Obama administration does not presently support military action against Iran but some of the Republican presidential candidates do. The notable exception is Ron Paul who does not see Iran as a security threat to the United States. The United States supports the opposition in Syria but so far official US policy has not endorsement arming them or taking more aggressive military action. Again, some of the Republicans endorse this action.

In addition to the Middle East, North Korea’s stability and nuclear ambitions are of concern. Recently the United States secured some agreements regarding the North Korean nuclear program. Regardless of who is elected president, steps will continue to be taken to address this issue. It is unlikely that the US will return to the rhetoric of George Bush who labeled North Korea one of the “axes of evil.”

Finally, Europe does not seem to factor large in terms of issues dominating the 2012 American elections. This is perplexing given the historical close alliances with Europe and how financial instability across the continent could impact the American economy. Furthermore, Russia does not factor very high in the 2012 presidential debates, although Mitt Romney, the likely Republican Party presidential nominee, has described that country as one of the main competitors and security threats to the United States. China is perceived as more of a rival or threat to US interests than is Russia. Barack Obama shortly after assuming the presidency canceled the missile shield proposal in Europe that his predecessor George Bush was advocating. Were a Republican elected as president it is possible that the missile defense shield proposal might again be resurrected.

Overall, these are the difficult issues confronting America’s future and it does not look like either any of the candidates or political parties are confronting them in a realistic fashion. Nor does it appear that either the media or the public is either.

The Last Word
There is an interesting article in the New York Times discussing how Obama is having a difficulty attracting big donors this election. It notes how over 58% are small donors this time. Big money is going to the GOP.  It seems that after wealthy America threw a party and had to pay the bill, they turned in 2008 to Obama to bail them out. Now that they are bailed out and partying again they have turned their bake on him. There is a message here for Obama and corporate Democrats. The silver lining here is that if Obama gets reelected it will be with small donors and perhaps they will mean a change in politics. But the worry for Obama and the Democrats is that big money is again voting ideological and that is usually a good sign for Republicans.

Protecting Shareholder Rights: The case for the Minnesota Shareholder Freedom of Choice Amendment

 

Minnesota voters might see their November 6, 2012 ballot crowded with constitutional amendments. Among their choices could be the Minnesota Freedom of Employment ("Right to Work") Amendment. As presently worded, the Amendment would ask Minnesotans:

     Shall the Minnesota Constitution be amended to guarantee all citizens the individual freedom to decide to join or not join a labor union; to remain with or leave a labor union; or to pay or not pay dues, fees, assessments, or other charges of any kind to a labor union or any affiliated third party or charity, without having it affect their employment status?

Proponents of the amendment contend that its purpose is no more than to give individual workers the right to decide whether they wish to join or support a union. As a backup supporters also argue, as did Governor Scott Walker in Wisconsin or Mitch Daniels in Indiana, that such an amendment or legislation will facilitate a business-friendly environment that will help the economy and produce jobs.

Conversely, opponents contend–and some proponents secretly or not so secretly concede–that the real purpose of the amendment is partisan. It is an effort by Republicans to break the financial back and political power of the unions which have historically supported Democrats in elections or in lobbying for specific types of legislation such as minimum wage laws and workplace safety regulation.

But the power of labor unions politically is dwarfed in comparison to corporations and their treasuries. The 2010 Supreme Court decision Citizens United v. Federal Election Commission has unleashed corporations to spend tens if not hundreds of millions of new dollars in politics, with its impact already well documented in this and the last election cycle. This money, plus the millions if not billions of shareholder dollars spent by corporations for lobbying, gives them a significant advantage in the political process. As former chief Justice Rehnquist once stated in First National Bank of Boston v. Bellotti: “A State grants to a business corporation the blessings of potentially perpetual life and limited liability to enhance its efficiency as an economic entity. It might reasonably be concluded that those properties, so beneficial in the economic sphere, pose special dangers in the political sphere. . . Indeed, the States might reasonably fear that the corporation would use its economic power to obtain further benefits beyond those already bestowed.”

The corporate form gives some business unique advantages economically. But as Rehnquist aptly observed, these advantages need to be regulated to prevent corporations from using the resources they acquired in the economic marketplace to benefit themselves unfairly in the political marketplace.

So what is to be done? If an amendment is going to be offered to the Minnesota Constitution to give workers freedom of choice and to reign in the power of unions, fairness only suggests a similar measure be introduced to apply to corporations. Thus, Republicans and Democrats should join together and support the Minnesota Shareholder Freedom of Choice (“The Right to Personal Profit”) Amendment. The amendment would ask Minnesota voters:

     Shall the Minnesota Constitution be amended to guarantee all shareholders in publicly-traded       corporations incorporated or registered to do business in the state, the individual freedom on an annual basis to decide if any of money of the corporation shall be expended, given, donated, or otherwise used for any political purposes directly or through a third party, without having it affect their dividends or rights to profits in that corporation?

Freedom of choice is a beautiful concept. It is the essence of the American ethos and a powerful moving force in politics. Shareholders should be given the same rights within corporations that workers enjoy if the Right to Work amendment is adopted. If we are so worried about the political clout of unions, one should similarly fear corporate clout.

Pawlenty, Palin, Podcasts, and Presidential Politics

Pawlenty
There is a great old line from the television show Hee Haw that went: “If it were not for bad luck I’d have no luck at all.” This describes the last two weeks Tim Pawlenty has had.

Last week just as he was ready to start his book tour (aka presidential campaign) Michele Bachmann declares her interest in running for the presidency. Pawlenty becomes the other Minnesotan running for president and he is displaced in the news cycle by her.

Now this week he is eclipsed by the events in Tucson. Yes, he did a National Press Club appearance but in reality, who will remember. He was the third, fourth, or perhaps the fifth story of the week, well behind the events and collateral damage and stories that unfolded around him. Moreover, when he did get a chance to talk, the questions were about his views on Tucson, not on his narrative and agenda. In short, Pawlenty had little time to message, tell his narrative, and make his case for being a presidential candidate.

However, even without these two events, his chances were slim. Consistently I have stated that he has little chance of being a serious candidate for the presidency. I also said that two years ago when I said he had no prayer as McCain’s VP. Why? Simply, Pawlenty has no buzz and no originality. Pawlenty is a “me too’ candidate. Others talk about tax cuts, social conservatism, or what have you, and Pawlenty does the same. Palin does a book, Pawlenty does a book. Romney touts his skills as a pro-business governor, Pawlenty touts his skills as a pro-business governor. Pawlenty is always behind others, never able to find a message or theme that lets him stand out from others. Instead, he seems to a candidate in search of a message, a voice, an appeal. He stands below undecideds among GOPers.

Pawlenty’s time is running out. Think of this. The Iowa caucuses are in February, 2012–barely 13 months away. If Pawlenty is to be a viable presidential candidate he needs to be a serious candidate by the fall, 2011. This means that by the beginning of the summer he needs to catch fire. That is barely six months. His book tour is a fizzle. He is no longer governor and cannot milk that for media time. He is competing against others for money and attention. It will probably be weeks before Tucson and other major news items fade before he has a window to get attention. But it will be under the shadow of “Will she or won’t she” for both Bachmann and Palin.

Pawlenty also faces one final problem. He cannot criticize other GOP without burning bridges. With that, the events of Tucson have changed the political dialogue–everyone but Palin understands this. Pawlenty cannot go on the attack without risking backlash.

No, in the end, Pawlenty has had bad luck, but that only ices the dismal chances he has in running for president. He exited the state with it in worse debt that when he arrived. Maybe he did not raise taxes directly, but at what cost? A state in debt, a K-12 system recently ranked by Education Weekly as mediocre, and a crumbling infrastructure. Pawlenty has no real accomplishment to stand on.

Palin
Palin may be correct that blaming her for Tucson is wrong. But it does not matter that she did not pull the trigger herself. No one really believes her crosshairs over Giffords and others were not gun scopes. Her Facebook speech denouncing critics with invective and inflammatory language only reinforced impressions that she has the subtlety of a machine gun. She demonstrated not one iota of reflection that her style of rhetoric was inappropriate, at least this week, and that a vast spectrum of moderate and swing voters do think the caustic dialogue in America created the atmosphere for Tucson. It does not matter whether this is true–this is what the people think. Palin may have endeared herself to her hardcore supporters, but to the voters she needs to woo if she runs in 2012, she failed to reach them and reinforced the image of her as unqualified to be president.

Boehner and Obama
Unlike Palin, both John Boehner and Barack Obama understood the political climate of the day and responded without looking political. Boehner rallied Congress together for a few days and delayed the GOP until next week. Obama gave a masterful speech that caught the sign of the times and the feelings of a nation. He exploited a memorial service in ways that did not look political, contrasting to the Wellstone service back in 2002 that hurt the MN DFL that year, leading to the election of Senator Norm Coleman and Governor Pawlenty. A new rhetoric, at least for now, is what is politically smart. Obama won the respect of many, but especially moderates this week, helping him in his rehabilitation.

How long will the new political environment last? Free speech cannot be held hostage to nuts with guns, but maybe disagreement can stick to heated debate of policy and issues and not personalty. We need not personally attack others to win a battle. Sticks, stones, and names do hurt.

Podcasting about Corporations and American Politics
Last Saturday, I spoke to the Stonearch Discussion Group in Minneapolis about Citizens United and corporate influence in American politics. Here is a podcast of my talk.

The Impact of Citizens United
On Thursday, January 20, from 7 PM – 8:30 PM at Hamline University, East Hall, Room 4, I will be one of several speakers discussing the impact of the Supreme Court decision Citizens United v FEC one year after it was decided.

Please join the Hamline University School of Business, Common Cause Minnesota, the League of Women Voters, and Minnesota MoveOn.org for a discussion on the impact of the Citizens United decision and ways that we can attempt to mitigate its impact on our democracy.

Speakers include:
Professor David Schultz (Me)
Rep. Ryan Winkler, the chief author of the disclosure legislation that passed in 2010
Mike Dean, Executive Director of Common Cause Minnesota
Allie Moen, League of Women Voters

There will be plenty of free parking and good conservation.

Citizens United, Politics, and the Lessons of Target Corporation

The backlash against Target Corporation’s political contributions offers important lessons about the brave new world of politics ushered in by the Supreme Court decision Citizens United v. Federal Election Commission. The lessons range from corporate marketing and governance to accountability.

Citizens United was a triumph for conservatives who believed that there was not enough money in American politics and that corporations lacked an effective voice in it. The 5-4 majority in Citizens United ruled that the free speech rights of corporations were violated in banning them from making express advocacy independent expenditures.

The decision freed corporations to make direct expenditures from their treasuries to endorse or oppose candidates of their choosing. That is exactly what Target Corporation did in Minnesota.

Tom Emmer is the Republican gubernatorial anti-tax and anti-gay rights candidate. Minnesota Forward was a PAC formed in Minnesota after Citizens United and it collected corporate donations to run ads endorsing Emmer. Target contributed $150,000 to the PAC, ads for Emmer ran, and then the sky fell in for Target. Immediately employees, gay rights organizations, and Moveon.org criticized the contribution, asking how the company’s donation squared with Target’s commitment to gay rights and its policy on same sex couple benefits. Target CEO Gregg Steinhafel tried to massage the protest, stating the company only endorsed the candidate’s views on taxes, not gay rights issues. But the rationalization was too late, and Target has been unable to contain the damage. Why?

Unlike other Minnesota companies such as Polaris and Best Buy which also donated to Minnesota Forward, Target occupies a unique place. Originally the Dayton and then Dayton-Hudson Corporation, this company is locally incorporated and was family owned for years. The Daytons had a record of community support and philanthropy, still expressed in terms of the company donating 5% of its profits to schools. Self-consciously, Target has curried this socially responsible, good corporate citizen brand in juxtaposition to its rival Walmart. For many, Walmart is the evil empire and Target’s progressive image made it a favored retailer for many. Steinhafel forgot all of this when he made the political contribution.

The donation supported a candidate who stood contrary to the image Target has sought to cultivate for years. Steinhafel violated the number one rule of business–know your customers.

The deterrent to corporate political contributions after Citizens United was that retail businesses would be loath to act, for fear they would alienate half of their customers. Target should have remembered that. It should have remembered how it had consciously built its image and thought about how this political contribution impacted it. Clearly Target failed to do that.

The half-hearted apology that the contribution did not mean it supported Emmer’s views on gay rights demonstrated a naivete about marketing. When companies employ celebrity spokespersons, they hire the entire package and it is impossible to separate off one part of their life or views from the rest. Think of Tiger Woods. Corporations cannot insulate themselves from criticism by saying they endorse only part of a candidate–they are stuck with the entire package.

What Citizens United and the Target donation revealed is that corporate political activity merges politics and marketing. Support of political candidates and causes are marketing and imaging statements, and companies in the future now must think about how their political activity affects their brand. Steinhafel and Target should have known that. In Target’s case, the contribution was bad branding but for other companies–such as a gun company supporting a pro Second Amendment candidate–such an expenditure might be a smart move.

Steinhafel thus violated a second rule of business–confusing his own self-interest or views with that of the interest of the company. This tells us something about corporate governance. The real power of corporations rest not with shareholders but management, and most of the major misdeeds in corporations occur when management comes to substitute their interests for that of the shareholders and stakeholders they serve. Steinhafel’s choice raises questions about how decisions are made in companies, who speaks for corporations, and whose First Amendment rights were furthered by Citizens United–the shareholder or the management?

Finally, what Target and the supporters of Citizens United forgot was that over the last 25 years corporations are increasingly being held socially accountable for the choices they make. Target understood that with its branding, but seems unable to grasp that point now that it has entered partisan politics. The brave new world of Citizens United does mean that corporations can speak, but they will be held accountable by their customers and shareholders for the choices they make.