I've seen a lot of hand-wringing over yesterday's Supreme Court decision that businesses shouldn't be forbidden from politically-motivated spending. I'm not sure why. As far as I can see, it shouldn't have a drastic impact on politics, and especially not national elections. I'd make several observations, all leading to the conclusion that the decision won't harm democracy and should actually help it.
First, the assertion that corporations will suddenly have broad new power to donate to political goals is perplexing. Corporations have long had the ability to further their political desires. They've been permitted to establish and donate to political action committees (PACs) to this end. I'm sure anyone reading this has seen ads by union or corporate lobbyist PACs about various issues or in favor of various candidates. This ruling would eliminate the need for that middleman, but the result would be essentially the same.
Neither Party Vastly Benefits
Second, this doesn't vastly favor Republicans as most reports indicate. These days, most big businesses hedge their bets and donate to both parties. Or more appropriately, they donate to whoever is in power, or likely to be. That's why the Obama campaign did so well. Not all that money was from individuals -- a large portion was from corporations, or their PACs.
For example, the Democrats' priorities align with plenty of corporate interests. Many businesses, and the U.S. Chamber of Commerce, supported last year's stimulus. The tech industry is dominated by campaign contributions to the left, to further goals like net neutrality. Firms who are heavily involved in green tech initiatives also favor the Democrats. The HMOs love the health care reform bill. And of course, something like 99% of unions' political spending goes to Democrats. While the Republicans will certainly continue to be favored by some parts of business, so will Democrats.
Good For Small Business
Next, while talking to my colleague Chris Good about the ruling, I concluded that it actually could be good for free market competition. Chris noted that, prior to the ruling, big businesses had PACs or gave money to powerful lobbyists who have PACs on their behalf, small ones didn't. So a company like Wal-mart wields a great deal of political power, as do other big companies. But what about the smaller businesses? They often didn't have the resources to establish PACs, or the same political objectives as the big firms' lobbyist PACs champion. As a result, small business had largely been left on the sidelines when it came to politics. Yesterday's ruling changes that.
Imagine if Wal-mart's PAC donated money to a political campaign of a candidate who promised the company he'd fight to build one of their stores in his district. That would likely put smaller, local retailers out of business. Up to now, they couldn't much to compete with the ads for that candidate that Wal-mart would indirectly support through its PAC donations. Now, they can create commercials or donate directly to candidates to fight against that. So really, this ruling could may help small business and hurt big business.
Like It Or Not, It's Free Speech
Finally, if you believe that a capitalist free market society is what the U.S. ought to have, then this ruling is a positive step in that direction. It's a step forward for free speech. Corporations are groups of individuals, and they should be able to voice their political beliefs without significant barriers. This ruling allows for that. The key thing to remember here is that Americans are also free disagree with, dispute or ignore coporate political ads.
For example, if Goldman Sachs ran ads championing giant banker bonuses, that probably wouldn't go over well with average Americans. But if it has legitimate arguments for why certain regulatory proposals would hurt the U.S. economy, shouldn't it be able to voice those concerns in a public forum? If you believe in freedom of speech, then the only answer can be "yes."
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