Who Really Controls the US?

Introduction

Trump has single handedly taken the US in many new directions. But beyond the publicity glare of cable news and social media, the DC power brokers continue to work steadily. This table provides a breakdown of the $3.4 trillion paid to US lobbyists in 2018.

Lobbying Outlays by Sector, 2018

Source: Open Secrets

A question: What do these items have in common?

  • US Health Care;
  • US Wars;
  • US Guns;
  • The Boeing 737 Max, and
  • US Middle East Policies.

In all cases, a vast majority of American citizens are not getting what they want. That is because special interests are in control and nobody is representing the national interest. Below, each of these is considered in turn.

a. Health Care

The US knows how to deliver goods and services cheaply. So what is wrong with service delivery in the health sector? The US spends far more than any other developed nation on health care, and its health outcomes are the worst of any developed nation. Why should this be? As I have reported, findings on how to reduce US health costs and improve performance were set forth in the Obama Health Care Bill. The bill called for the elimination of over $700 billion of unnecessary payments. Unfortunately, that is not all the 1,017 page bill included. Before any cost-cutting steps could be taken, the Bill required “stakeholder” approval. You can guess who the stakeholders are: drug companies, hospitals, nursing homes, health professionals, health service delivery companies, and health insurance firms. It is hardly surprising that nothing happened.

Open Secrets reports that together, the stakeholders spent $561 million lobbying in 2018 and have 2,806 lobbyists walking the halls of Congress. Health care is a very large business and stakeholders pay to protect their interests.

And where was the FDA pressing the drug companies to take seriously addiction problems associated with opioids? But there is some good news: it now appears some actions are being taken. According to NPR:

Federal prosecutors are charging 60 doctors, pharmacists, medical professionals and others in connection with alleged Opioid pushing and health care fraud, the Justice Department said Wednesday. The charges came less than four months after the Justice Department dispatched experienced fraud prosecutors across hard-hit regions in Appalachia. The cases involve more than 350,000 prescriptions for controlled substances and more than 32 million pills — the equivalent of a dose of opioids for “every man, woman and child,” across Ohio, Kentucky, Tennessee, Alabama and West Virginia, said Assistant Attorney General Brian Benczkowski.

This is definitely an improvement over what happened when banks collapsed in 2008 causing a global recession. There, no banker went to jail.

b. Wars

In the 20th and 21st Centuries, the US has been at war far more than any other nation. Was Eisenhower right to warn us about the Military/Industrial Complex? Consider the following wars:

  • Vietnam – China had been invading Vietnam since the beginning of time. To avoid another invasion, Ho Chi Minh asked the US to recognize him as the legitimate leader of Vietnam. John Foster Dulles said no because Vietnam was a Communist country. The result? 55,000 Americans and 1,000,000 Vietnamese killed. And the US lost the war and was forced out in 1975 when Ho Chi Minh, leading North Vietnam, captured Saigon. Nothing accomplished.
  • Iraq – The US invaded Iraq because of the false claim that Saddam had weapons of mass destruction. Bush proclaimed victory and removed Saddam Hussein. That action destabilized a good part of the Middle East. And with the US now pulling out, Iran is in a position to take over. The situation there is far more dangerous than it was before the US invasion.
  • Afghanistan – The US went in to get Bin Laden. It got Bin Laden but remains engaged in a ground war that will accomplish nothing.

Why all of this? Eisenhower was right – the Military-Industrial Complex needs feeding and with the Afghanistan war winding down, it is looking for other opportunities to start wars.

According to Open Secrets, the Complex spent $128 million last year on 400 DC lobbyists.

c. Guns

American citizens do not want 40,000 shot to death every year. In 2012, Bill Moyers reminded us: “in my lifetime alone, far more Americans have been casualties of domestic gunfire than have died in all our wars combined”. No other developed country allows citizens to possess assault guns. But the US has the National Rifle Association, and no President will take them on. The NRA goes to great lengths (and spends huge sums of money) to defend the right to bear arms. It is opposed to virtually every form of gun control, including restrictions on owning assault weapons, background checks for gun owners, and registration of firearms. NRA’s influence is felt not only through campaign contributions, but through millions of dollars in off-the-books spending on issue ads and the like.

The NRA spent $5.1 million lobbying in 2018 and another $9.4 million on campaign contributions.

The 2nd Amendment to the US Constitution states: “A well regulated militia being necessary to the security of a free State, the right of the People to keep and bear arms shall not be infringed.”

If our forefathers knew how this amendment was being interpreted today and its effects, they would turn over in their graves.

My suggestion: why not treat guns and their owners like we treat autos and their drivers?

d. The Boeing 737 Max

Boeing has a well-oiled lobbying operation ongoing in DC. Open Secrets reports that it spent $15.1 million lobbying in 2018 with 87 of its 117 lobbyists having previously held government jobs. The result? Lax enforcement by the Federal Aviation Administration (FAA).

The 737 Max is not just a minor upgrade of the 737. The Max has larger engines than previous 737s. And this required Boeing to move them both forward and higher up on the wings. These changes should have required the MAX to have been certified as a new plane. But Boeing and the FAA, working together, allowed the MAX to be approved as a relatively minor upgrade under the existing 737 certification. Upgrade approvals can be accomplished quickly and are far less costly than new certifications.

One can legitimately wonder whether the 339 that lost their lives in the two crashes would be alive today had the Max been required to undergo a new certification. It is also of note how long it took the FAA to require the plane to be taken out of service by American carriers.

e. Middle East Policies

Most Americans want the US to support Israel. Most Americans do not want Arab nations to hate us. The hatred came from the US arming Israel to be its US policeman in the Middle East. And what did Israel do? It used its power to occupy and seize lands from its neighbors. Of course there were provocations. But Israel has been condemned by the UN Security Council for aggressive acts 29 times, far more than any other country in the history of the UN.

The first US veto favoring Israel was in January 1976 when Syria, Egypt and Jordan brought a resolution to the Security Council calling for a two-state Jewish/Palestinian settlement on the international border. The resolution incorporated the wording U.N. Security Council Resolution 242 that passed unanimously in 1967. UN 242 said Israel would give back the lands it seized during the six-day war and that the resulting borders would be the basis for the Palestinian state.

The Jewish lobby is very powerful. For documentation on this and how it has worked against US security interest, see Mearsheimer and Walt.

Conclusion

The Achilles Heel of Democracy: Special Interest Groups pay large sums to get what they want. There are no advocates for what the majority of Americans want.

What Can Be Done?

The power of the military industrial complex could be in part muted if the draft was brought back. Parents and potential draftee children would start paying serious attention to what wars the US was fighting and why.

But thinking more broadly, the question is: how can the interests of citizens be better represented? And here, the New York Campaign Finance Program is worthy of note.

The city’s system matches at a six-to-one ratio the first $175 a city resident contributes

to candidates participating in the voluntary program.

To receive public funds, candidates must meet a two-part fundraising threshold:

  • Collect a minimum number of contributions (of $10 or more) from the area they seek to represent. (For instance: candidates for City Council must have 75 contributors from their district; candidates for borough president must have 100 contributors from their borough.)
  • Raise a minimum amount of qualifying contributions from NYC residents (only the matchable portion of the contributions counts towards this threshold).

Also, there is a cap on how much public funding each candidate can receive.

The NYC program has been reviewed by the Brennan Center for Justice Review. They found that candidates said that by pumping up the value of small contributions, the New York City system gives them an incentive to reach out to their own constituents rather than focusing all their attention on wealthy out-of-district donors, leading them to attract more diverse donors into the political process. The Brennan Center concluded: Small donors to 2009 City Council candidates came from a much broader array of city neighborhoods than did the city’s small donors to 2010 State Assembly candidates.

These results are quite promising. It is hoped that more experimentation will lead to better ways to insure that politicians represent the views of their constituents.

The content above was saved on the old Morss Global Finance website, just in case anyone was looking for it (with the help of archive.org):
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