Archive for November 28th, 2011

This is a post from Public Citizen’s Democracy is For People Campaign, get involved here and follow @RuleByUs for more information.

Another “Black Friday” blitz of sales and shopping, some of it sadly of the violently “competitive” variety, has passed us by. Consumer spending for the “holiday” was at record levels, with online sales by major retailers leading the way and expected to continue with today’s “Cyber Monday” discounts.

Consumers camped out in front of a Best Buy in Bakersfield, CA on Thanksgiving Day 2010. Flickr image from Bill Ward's Brickpile.

This is ostensibly good for the economy, but a number of voices have been questioning the creeping commercialization of Thanksgiving. From employees of “big box” stores forced to give up their family holiday plans in order to open at midnight or earlier, to activists and business leaders who doubt the long-term sustainability of our present consumer culture, some important critiques have been leveled.

In terms of both the broader public good and big-picture economics, however, an important piece has been missing: the fact that an increasing share of some major corporations’ profits from consumer events like “Black Friday” aren’t going toward job creation or investing, but to attempts to influence and distort our democratic politics.

As Charles Kolb, President of the Committee for Economic Development (CED), an esteemed non-partisan organization of business leaders, recently told Dylan Ratigan, this political spending is basically a form of “rent-seeking” that isn’t good for business or for our democracy. Rather than competing in the marketplace or investing in economic growth, corporations seek a narrow advantage by garnering favored access to politicians and obtaining favorable policy outcomes—often at the expense of investing in long-term national priorities like education and infrastructure.

A landmark study of corporate governance released this month by the Investor Responsibility Research Center highlighted deeply problematic trends in this regard. The study, which looked at campaign-related spending and investor transparency among the S&P 500 companies, is fairly long and detailed, but some key findings highlighted at the report release (which I attended) are illuminating.

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With Rep. Barney Frank’s (D-Mass.) announcement that he will not seek re-election in 2012, America will lose one of Congress’ sharpest minds on financial policy.

The former chairman of the House financial services committee proved it is possible to pierce the armor plating of the Wall Street lobby with intelligence, committed effort and an understanding of the banking industry.

History will remember Frank as the co-author and prime champion of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The shortened name of the bill disguises the countless contests with deep-pocketed industry agents in which Frank’s rapier wit and agile tactics proved pivotal.

As the financial industry and its congressional allies continue to attack the 2010 law and weaken its implementation, the Massachusetts lawmaker will be sorely missed.

Bartlett Naylor is Public Citizen’s financial policy advocate.

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