US Supreme Court: No Campaign Finance Limits

Jan. 25, 2010 - PRLog -- 25 January 2010. David Caploe PhD, Chief Political Economist, EconomyWatch.com. On January 21, the US Supreme Court, aka SCOTUS, overturned the most recent attempt to put some kind of limits on political campaign finance activities – the so-called McCain Feingold Act of 2002 – with a far-ranging decision that insures the already broken and corrupt American political system will become even more so almost immediately, barring the unlikely passage of new laws by the current Congress.

While this shocking, if not surprising, decision has already occasioned much commentary, especially in the US, relatively little has been written about the ruling’s equally disastrous likely effects on the US and world economies.

In this context, there are six points important for all observers of the world economy to bear in mind about the significance of this strange and unnecessary judicial intervention into the ongoing deterioration of the American political economic scene.

1)   The first is that, as we have often noted, the US remains at the center of the world political economy, and is likely to remain so for the next decade at least.

Even China is dependent on the US as its key export market, especially if it hopes to avoid the massive property- and asset-bubble there that many observers feel is imminent. While the Beijing leadership has so far navigated the post-Black September 2008 world with impressive skill – recently raising interest rates to cool down those potentially overheating real estate and stock markets – they will need a healthy US economy to continue to be able to absorb their ever-growing manufacturing capacity.

2)   In that context, as we have also noted previously, the biggest economic problem currently confronting the US is its broken and corrupt political system.

Put bluntly, almost every initiative that needs to be taken in order to get the American economy back on its feet is being blocked by the political power of major interest groups – eg, the Too-Big-To-Fail banks and other financial structures like AIG, the ever-dominant “health” insurance companies etc.

This bizarre and unwarranted decision will only increase the ability of these highly organized and very liquid special interests to both buy the loyalty of individual legislators and, perhaps even more important, structure public discourse about these key issues in a direction amenable to their own preferences.

3)   As we have also recently argued, the biggest problem confronting the ENTIRE world economy is the lack of monetary velocity – the speed with which it changes hands – due to the increasing IN-equality of income distribution, a fact that affects not just emerging countries like China and India, but the world’s central economy, the United States.

We need not re-hash that significant point here. But we DO need to stress unequivocally that income IN-equality is already high in the US, and is growing larger all the time – a direct result of the Cheney / Bush policies that, for reasons that remain unclear, the alleged purveyor of “change,” President Obama, has continued almost unabated.

This decision will further strengthen the power and influence of corporations and wealthy individuals over the political process, hence accentuating and aggravating the unequal distribution of resources within America that – aside from being unjust and, potentially, politically de-stabilizing – ALSO weakens the “vital spirits” of entrepreneurialism and consumer demand, whose re-animation will be absolutely necessary for the US to come out of its seriously stagnating economic situation, which in turn is a crucial pre-requisite for sustained recovery on the global level as well.

4)   From a principled point of view, this decision perpetuates the confusion in American public discourse between FREE speech and PAID speech – a misunderstanding that has already created problems for both the US and world economies.

One of the truly great and distinctive features of American life is the First Amendment right to FREE speech – which means, very simply, that no one need fear any sort of government reprisal for their political opinions. That is, you can say whatever you want without fear of being harassed or thrown into jail merely for expressing an opinion unpleasant to those with political and economic power.

This is quite different from PAID speech – that is, the bombardment of the public space with, and the domination of public discourse by, messages coming from centers of economic and political power specifically calculated to advance their own particular interests.

The whole theory of FREE speech is that an open marketplace of ideas provides the best structural opportunity for a free people to be able to inform themselves about the issues of the day and come to a reasoned view of what constitutes the best interest of the public as a whole.

This is quite different from a situation in which those with very narrow interests are able – as a result of their access to huge revenues generated by corporate activity – to drive out competing viewpoints by overwhelming the public space with unreasoning appeals to emotions like fear and greed – both of which may be legitimate as motivations in a private-interest sphere like a stock market, but are much less constructive in the larger arena of society as a whole.

Public discourse in America has been dominated by such forces since the early 1980s, with not just political but also economic results that have created the havoc the global economy has experienced directly since Black September 2008, and in which it remains enmeshed to this day.

This decision will only increase the power of those able to bend public opinion in the direction they want as a result of the massive concentration of PAID speech – with predictably negative results for the US AND world economies.

To read the rest of this article, visit EconomyWatch.com at:

http://www.economywatch.com/economy-business-and-finance-...

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