In 2008, corporate PACs donated heavily to Democrats as the political momentum unmistakably swung their way. In 2010, the momentum has shifted enough for the majority of corporate donations to go to Republicans, even though they do not currently hold the majority in Congress as Democrats did in 2008. They’re betting on a big change in the House, the Washington Post reports:
Corporate America is gambling on the minority in its political giving this year, assuming that Republicans will win big in the November midterm elections, an analysis of campaign finance reports shows.
The pattern represents a distinct change from a year ago, when President Obama was sworn into office. Back then, corporate political action committees made a shift to the Democrats, giving 58 percent of their donations to the party. So far this year, 48 percent of the contributions from big business are going to the Democrats.
The shift in political giving represents a calculated gamble by lobbyists and executives overseeing corporate largesse that the Republican Party may regain control of Congress, sayGOP fundraisers and political consultants.
Many other political winds have shifted behind Republicans in recent months, but the swing in money from corporate PACs is unusual. Corporations often give campaign contributions while seeking access and favor with incumbent lawmakers in position to shape legislation — meaning they gravitate to the party in power.
The last time corporate PACs made such a dramatic shift to the Republicans was in 1995, after the GOP’s rout of the Democrats in the 1994 midterms. This time, corporations have switched sides before the election.
This looks like a lobbyist version of Intrade. Actually, Intrade currently has the opposite indicators, with GOP control of the House only at $40 and Democratic control at $58.10. Otherwise, though, it’s basically a market on political handicapping, where companies put their money according to the risk and reward involved. Right now, corporations clearly see Democratic control as a risk.
Why didn’t they make that decision in 2008? After all, the populist rhetoric that lifted Barack Obama over Hillary Clinton targeted corporations more than anything else, especially after the economic collapse. However, the perceived reward of being on the inside of Democratic Party agenda decisions apparently outweighed the perceived risk of the chance that Democrats would follow through with their damaging, anti-business agenda. In other words, the business world rolled the dice on moderation, and came up snake eyes.
Unlike the Left, I have no problem with corporations or any entity making contributions and publicly defending their interests. The core problem that creates this kind of lobbyist Intrade is the spoils system of a Leviathan federal government. They’re bidding for pork, for regulatory favor, and for political influence precisely because Congress has arrogated so much power to Washington DC. In one sense, it’s a protection racket set up by the entrenched politicians in order to defend their incumbencies and fiefdoms. Corporations have little choice but to play along or get squashed, thanks to the power these politicians have managed to grab.
If we want campaign finance reform, we need smaller government in order to eliminate the incentives that create these bidding markets. It would be nice if these corporations saw that in their long-term interest and supported small-government candidates and policies, rather than aim for the spoils and play defense. Hopefully, we’ll have a happy coincidence of small-government candidates in this cycle who benefit from the shift.