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When corporations, special interest groups, and the wealthy use their financial power to alter or weaken laws—or even create laws and policies in their own favor—all people in America suffer.
Corporate lobbying at all levels of legislation
Lobbying is one of the most common and well-known ways money can influence regulations and policies. Special interest groups set a record of 4.2 billion for lobbying federal lawmakers in 2023. Also, due to congressional restrictions at state law levels, lobbyists have started pouring more money into states to get what they want. Since 2015, they have spent nearly 14 billion on state-level lobbying.
But why do lobbyists spend all this money? The answer is simple: they expect something in return for their money. These staggering amounts allow corporate lobbyists and special interests to directly influence lawmakers and regulators. With direct access to decision-makers, lobbyists can provide them with information and draft laws that directly support their clients’ interests.
Flooding Money into Election Campaigns
Winning a seat in the U.S. House of Representatives costs an average of 2 million, and winning a Senate seat costs nearly20 million. In 2020, over 14 billion was spent on federal elections, making it the most expensive election cycle in U.S. history, and it’s predicted that in the 2024 elections, this figure will reach about 16 billion.
Money flows into a candidate’s campaign through direct contributions or PACs, thanks to decisions like Citizens United, where any individual can spend unlimited amounts of cash to support or oppose candidates. This flood of financial resources can directly affect candidates’ and elected officials’ regulatory positions.
If you’re a candidate running for office whose regulatory views align with corporations or special interest groups, you might find yourself with strong financial backing. If your views don’t align, you can bet they’ll fund your opponent.
Hiring Former Representatives in Lobbying Firms
According to a 2023 report, over 460 former members of Congress were employed in high-paying jobs by lobbying firms. A large number of Congress members and their staff have abused government positions by viewing them as a springboard to their next lucrative job. This culture is deeply embedded in Washington and ripe for corruption.
These are people who have insider knowledge of how the system works and contacts with various government officials. Now, they use their insider knowledge to help corporations and special interest groups change laws and policies in their favor.
These former representatives who move between government roles and private sector positions are part of a phenomenon known as the “revolving door,” which can lead to a form of “regulatory capture” where regulations or policies are shaped by those who previously worked or will work in the regulated industries.
Financial Resources, the Most Important Component for Competition
Representatives can spend up to 30 hours a week fundraising. This leaves them less time to meet with voters and actually do their legislative work. On the other hand, regulations and laws are dense, complex, and full of legal cases where no member of Congress is an expert in everything. This is an opportunity for industries that can:
- Fund research projects and provide policymakers with data they want, along with executive summaries.
- Fund think tanks that can design public policies and regulatory frameworks aligned with their interests.
- Provide economic analyses that can highlight potential negative impacts of regulations on businesses or the economy.
- Launch advertising campaigns and gain media coverage to frame issues in a way that supports their interests and sways public opinion.
If all else fails, there’s the court. Industries with significant financial resources can challenge regulations or policies they don’t like in court, which can lead to changes or delays in implementation.
Jeffrey Sachs’ explosive speech in the European Parliament
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