Corporations are buying our politics -- and hurting capitalism
The United States is getting more corrupt. So says Transparency International, which ranks the country the 16th least-corrupt in the world in 2001. By last year, the United States fell back to 24th place.
Why is corruption spreading? A recent New York Times story fingers everything from globalization to rising income inequality, as well as the growing role of corporate money in political campaigns. Yet, while corporations are spending more than ever on political campaigns, we’ve also recently seen a noticeable uptick in corporate corruption scandals.
Have corporations lost whatever ethical compass they once had? Are Americans even remotely surprised by the misconduct of the financial industry?
That’s what the New York Times asks, in light of the recent Libor-Barclays scandal. What does it mean when one of the world’s leading banks attempts to manipulate an incredibly important interest rate — and we barely blink?
Corporations had been loosely regulated by the Glass-Steagall Act, which was shattered in 2000, as well as limits set by laws like the Foreign Corrupt Practices Act, which corporations today furiously lobby against. They use their profits to weaken regulation. Porter writes:
Company executives are paid to maximize profits, not to behave ethically. Evidence suggests that they behave as corruptly as they can, within whatever constraints are imposed by law and reputation… the furious rush of corporate cash into the political process — which differs from bribery in that companies pay politicians to change laws rather than bureaucrats to ignore them — is unlikely to foment ethical behavior.
In this way, money’s corruption of politics makes fraud and corruption easier and more likely for corporations. Need another example? Take the reverential treatment availed to Jamie Dimon by the Senate Banking Committee, even after his JP Morgan lost $6 billion.
No wonder Americans don’t trust banks (or politicians):
Sixty-two percent of Americans believe corruption is widespread across corporate America. According to Transparency International, an anti-corruption watchdog, nearly three in four Americans believe that corruption has increased over the last three years… In 2001, Transparency International’s Corruption Perceptions Index ranked the United States as the 16th least-corrupt country. By last year, the nation had fallen to 24th place.
What is at stake here isn’t only billions dollars in fraudulent behavior, it’s the entire American political-financial system:
It’s hard to fathom the broader social implications of corporate wrongdoing. But its most long-lasting impact may be on Americans’ trust in the institutions that underpin the nation’s liberal market democracy.
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