Glenn Reynolds asks whether employees in the financial industry, always a big donor to political campaigns, will contribute to other candidates or curtail their giving. He cites the AIG bonus flap, and Congress’ reaction to it (including the outrage of members and the House passing a bill that would tax 90 percent of those bonuses away) as evidence of the fickleness of Congressional favor. Reynolds writes,
In light of this behavior, Wall Street–if it survives long enough–will likely conclude that subsidizing these pols was a bad idea.
If so, maybe it’s time to shut off the funding. Politicians are already gearing up for the 2010 election season. That means many of the same members of Congress who are currently running with the lynch mob will be back in search of more contributions soon enough.
Perhaps folks in the financial industry should tell them no and consider donating to candidates who believe in free markets–and who possess a bit of backbone–instead.
Remember that AIG’s largesse — $9,342,839 in individual, PAC, soft money and 527 contributions since the 1989 election cycle — is dwarfed by the $170 billion in support the firm has gotten. That’s $18,195 for every dollar contributed. It certainly seems like subsidizing the pols led to quite a good return, as it did for Citigroup, Goldman Sachs, J.P. Morgan, General Motors and others. Contrast the treatment financial companies got from the Emergency Economic Stabilization Act, which lavished billions on bank holding companies, financial firms and other big donors, with the misleadingly named Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which shifted the burden of irresponsible lending practices by credit card companies and irresponsible borrowing and buying by credit card holders entirely onto the latter. It is perhaps needless to say that employees, their immediate family members, and PACs of credit card companies are far more generous supporters of political campaigns than people struggling to make ends meet and thinking of defaulting on their debts.
Overwhelming majorities of politicians in the Senate and the House proved themselves to be perfectly willing to sacrifice the protections that bankruptcy laws afforded to ordinary citizens. Similarly, politicians of both parties–including free market conservatives opposed to government interventions in markets and anti-big-business liberals who’d railed against the excesses of Wall Street–were only too happy to make American taxpayers bail out their big donors.
Financial firms get it: It’s not what politicians say, it’s what they do. And what they do, ultimately, is take care of their contributors. If a few AIG employees have to be hung out to dry once in a while to make it appear something else is going on, so be it.