Our Polarized and Money-Driven Congress: Created Over 25 Years By Republicans (and Quickly Imitated by Democrats)

Political scientist Tom Ferguson prepared a short but important paper for the INET conference last weekend on how Congress got to be as polarized as it is today. His answer: it was redesigned quite deliberately by conservative Republican followers of Newt Gingrich starting in the mid 1980s and their methods were copied by the Democrats. Their changes resulted in firmer control by leadership (ie, less autonomy of individual Congressmen) and much greater importance of fundraising (which increased the power of corporate interests).

The extent of corruption may surprise even jaundiced readers. Both houses have price lists for committees and sub-committees. Ferguson delineates some of the many mechanisms for influencing political outcomes; they extend well beyond campaign donations and formal lobbying. Even though many are by nature hard to quantify in any hard or fast way, he does categorize them and has developed some estimates (see “The Spectrum of Political Money”, starting on p. 23, and see also his summary on p. 42). Finally, Ferguson goes through conventional explanations of why politics has become so polarized (such as changing cultural attitudes) and shows why they don’t stand up.

I strongly urge you to read the entire paper. Some key extracts:

Before a series of political reverses and another corruption investigation forced him from the scene, Gingrich and his leadership team, which included Dick Armey and Tom (“the Hammer”) DeLay, institutionalized sweeping rules changes in the House and the Republican caucus that vastly increased the leadership’s influence over House legislation. They also implemented a formal “pay to play” system that had both inside and outside components. On the outside, DeLay and other GOP leaders, including Grover Norquist, who headed Americans for Tax Reform, mounted a vast campaign (the so called “K Street Project”) to defund the Democrats directly by pressuring businesses to cut off donations and avoid retaining Democrats as lobbyists. Inside the House, Gingrich made fundraising for the party a requirement for choice committee assignments.9 The implications of auctioning off key positions within Congress mostly escaped attention, as did the subsequent evolution of the system into one of what amounted to posted prices….

By contrast, the changes in House procedures and rules that the Republicans instituted proved durable: Democrats rapidly emulated the formal “pay to play” system for House committee assignments, leading to a sharp rise in campaign contributions from members of Congress of both parties to their colleagues and the national fundraising committees. Soon leaders of the Democrats, too, were posting prices for plum committee assignments and chairmanships. They also centralized power in the leadership, which had wide discretion in how it treated bills and more leverage over individual members:

Under the new rules for the 2008 election cycle, the DCCC [Democratic Congressional Campaign Committee] asked rank and file members to contribute $125,000 in dues and to raise an additional $75,000 for the party. Subcommittee chairpersons must contribute $150,000 in dues and raise an additional $100,000. Members who sit on the most powerful committees….must contribute $200,000 and raise an additional $250,000. Subcommittee chairs on power committees and committee chairs of non-power committees must contribute $250, 000 and raise $250,000. The five chairs of the power committees must contribute $500,000 and
raise an additional $1 million. House Majority Leader Steny Hoyer, Majority Whip James Clyburn, and Democratic Caucus Chair Rahm Emmanuel must contribute $800,000 and raise $2.5 million. The four Democrats who serve as part of the extended leadership must contribute $450,000 and raise $500,000, and the nine Chief Deputy Whips must contribute $300,000 and raise $500,000. House Speaker Nancy Pelosi must contribute a staggering $800,000 and raise an additional $25 million.12…..

Under Gramm and like minded Senate Republicans, partisanship in the upper chamber grew at close to the same rate as in the House, if less flamboyantly (Figure 2). A radically different tone began to envelope a body long celebrated for comity: Constant threats of filibusters by defiant minorities meant that working control came to require not 51, but a 60 vote “super-majority,” while confirmations of presidential nominees slowed to a snail’s pace when different parties controlled the White House and the Senate (“divided government”).

The show of more political jousting helped in branding efforts by both sides, in that more frequent votes could be used to argue for fealty on certain pet issues. The media increasingly amplified themes used in Congressional debates, which increasingly led to a feedback loop, as messages that played well with readers and listeners were reiterated by Congressmen.

More from Ferguson:

Gingrich and his allies were painfully aware that transforming the GOP’s gains at the presidential level into a true “critical realignment” of the political system as a whole required breaking the Democratic lock on Congress. So they shattered all records for Congressional fundraising in their drive to get control of the House. Their success in this is what polarized the system. The tidal wave of political money they conjured allowed Gingrich, Gramm, Barbour and their allies to brush aside the older, less combative center-right Republican leadership and then persist in their efforts to roll back the New Deal and remake American society in the image of free market fundamentalism.

In power, the Republicans restructured their national political committees and the Congress into giant ATMs capable of financing broad national campaigns to protect and extend their newly won position in Congress. The Republican success left the Democrats facing the same dilemma they had in the late seventies, as the Golden Horde first formed up behind Ronald Reagan: they could respond by mobilizing their older mass constituencies or emulate the Republicans. That battle had been settled in favor of so called “New Democrats” (Ferguson and Rogers, 1986). Dependent for many years on campaign money from leading sectors of big business where regulation kept recreating divisions – notably finance and telecommunications (Ferguson, 1995b) – the Democrats reconfirmed their earlier decision to go for the gold. They followed the Republicans and transformed both the national party committees and their Congressional delegations into cash machines, with the leaders in each chamber, but especially the House, wielding substantially more power than at any time since the famous revolt that overthrew Speaker Cannon in 1910-11. As the Republicans moved further and further to the right, the Democrats did, too, constrained only by the need to preserve something of their mass base.

If you want to understand elite dysfunction in America, this paper provides an illuminating, if depressing, view. Having made money so central to how our political process works, it isn’t clear how to put that genie back in the bottle. And that in turn looks likely to perpetuate government catering to the needs and wishes of the very rich.

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  1. Phil Perspective

    There is one problem about auctioning off committee chairs and the like. Blue Dogs Democrats are just like their states. They always get more than they give. Blue Dogs always lags in their “dues” paying. Often times, substantially late, if they pay at all.

  2. MyLessThanPrimeBeef

    We went from

    a government of the angry people,
    for the angry people,
    by the angry people


    a government of the rich people,
    for the rich people,
    by the rich people.

    1. Chauncey Gardiner

      Thank you for a very insightful observation, My Less Than Prime Beef. … for besides monetary corruption and intimidation of the pols, your first stanza was employed as a tool to achieve the latter at the polls. The old Roman strategy of “Divide & Conquer” based on so-called “Values issues”is still being used by the power elite today. Think about the intentionally divisive political tactics and character attacks that were employed by Karl Rove; or, as moderate Republican David Brooks has pointed out, the hyperconfrontational current governor of Wisconsin, Scott Walker. Alternatively consider the underlying reason behind the recently proposed highly visible budget cuts to NPR, which has a miniscule effect on the overall federal budget. Perhaps there is a positive to all this, though. It has enabled the corporate-statist elite to avoid shedding blood, or alternatively sharing prison cells with Bubba as punishment for their ongoing looting of the American people.

    2. chris

      Nicely done!

      Once Revolutionaries now elitest. I can’t believe we have turned out as we have after starting out with such a strong committment to liberty and freedom.

  3. Slade Smith

    It never bothered me so much that the Republicans ran their party like this– they were always beholden to big money interests anyway. That the Democrats raise so much money from big money interests and then run their party the same way is very disturbing to me, because the Democrats not that long ago stood for something else, I thought.

      1. dave

        Yeah, people look at the good ol days of democrats with way too rose colored glasses, and its not just that may used to come from the south. Both sides did pay for play, even in the 60s, it was just a matter of which source.

    1. Francois T

      We tend to forget that the Republicans stood up for Civil Rights way before the Democrats. As a matter of historical fact, the conversion of the Republican Party to the Party of the Money class is quite shocking.

      The truth is the Democrats could have reversed the House Rules in 2008 and deconstruct what Newt The Puke did in 1994. Alas, the corruption at the top echelons of both parties is beyond staggering: ask Steve Israel of the DCCC where does his most recent 2 million dollars in personal wealth come from?

      People had better wake up and fast because this country will be going down the drain sooner than later at this rate. Just observe how fast and and furious the destruction of civil rights has occurred and ponder this: Is it even conceivable to have an economy based on innovation and human capital without robust civil rights and a fair justice system?

      The answer should be obvious.

  4. James

    As a Republican, and a young one uninvolved with the Gingrich revolution, it is insightful to see how that power change in 1994 is still influencing elections.

    Something missing in the analysis is the size and longevity of the entrenched power the Democrats had in the house. Democrats had controlled the House for 60 of the previous 62 years, including 46 straight years. They controlled every lever of power in Washington and throughout the many congressional districts they had controlled for decades. Democrats were not powerless against the money the Republicans organized. And luckily for them they found a new money supply as tech firms in silicon valley became the countries new Billionaires and the loyal contributors to the Democratic party. Pelosi was able to organize this money and use it (along with other sources) to regain control of the house.

    As it stands currently, Democrats have much more consistent big money contributions than Republicans do. Tech firms, trial lawyers, and most big businesses support Dems, while Repubs. are largely funded by small business (although the definition of small does not mean 10 people, think Chamber of Commerce).

    On the “Polarizing of Congress”, I just think that is a reflection of a cultural shift that had been happening in the country for 30 years and continues to this day. There truly is a large divide between the ruling doctrine of individuals on the right and left in this country. in the 90’s, Republicans put into place congress people that reflected this ideological difference. Democrats had done this long ago and they were successful in creating the modern welfare state.

    1. Yves Smith Post author


      Your statement on who is funding the Republicans is utterly counterfactual, both when you look at campaign donations and more importantly, all the other ways of “donating” to politics outside the narrow category of campaign contributions.

      Ferguson has been meticulously documenting campaign donations for over 20 years. He is THE expert on this topic and has the goods. The idea that small businesses are the most important Republican donors is urban legend.

      He also debunks your cultural shift argument. Polling data of all sorts shows it to be untrue.

      1. James


        Thank you for the reply. I’ll response in points because it is easier for me to organize my thoughts that way.

        1.) I won’t argue with Ferguson on who donates because I am not an expert on campaign donations. I defer to other sources such as OpenSecrets that track campaign donations.

        I will say that I believe and agree with you that tracking campaign donations is difficult because first, as you say, there are ways to donate other than directly to the campaign, and many if not most donors will flow to whom they think is the winner and not necessarily whom they agree with. (I’m talking about business interest) The later can skew numbers with regards to whom somebody would prefer to support.

        I have been involved in campaigns and it is from my experiences there that I have seen how donations work. Like I say, I’m not an expert, but I’m not ignorant.

        2. Responding to your point about the small business myth. I want to point out that I did not use the language of most important. I said consistent. The most important donors in almost any campaign are the bundlers that host events and get their friends to donate.

        I used the work “consistent” specifically to imply those that can be counted on give money. No candidate can expect to win on only the money they receive from the NRA, NEA, Chamber of Commerce, NARAL, National Right to Life, or American’s for Prosperity.

        I wanted to say consistent because the Trial Lawyers never give more money to Republicans than Democrats. Unions are the same. Most tech firms as well. Oil & Gas and Tobacco give to Republicans and rarely the other way around. My point was that each side has a built in source of funds that has be cultivated and can be counted on. You can look at this link to see contributions from 1989-2010 (and yes, I know it doesn’t include everything):

        3. I don’t want to get into an argument about cultural shift. There was clearly cultural shift that has occurred in the country undeniably over the last century and quite dramatically since the 1960’s. Many of the shifts have been beneficial, such as, the widespread acceptance of Blacks and other minorities in mainstream society and woman taking up a more public and contributory position in society.

        Many have not been, degradation of the family, drug culture, and movement into a culture of consumption being a few examples.

        Add to these cultural things the adoption of different economic philosophies by each side (with the Republicans adopting a more lassie faire tradition from sources such as Hayek during the 1950-60’s, decades after Democratic adoption of Keynesian economics)

        The modern Democratic Party formed in the 1930’s and reformed in the 1960’s/70’s. The modern Republican Party formed in the 1980’s and is arguably going through a reformation now.

        4. I want to throw a bone to Gingrich & Co. They are charged with creating a polarizing Congress, and that is probably true. But one of the ways they did so was meant to correct what the considered abuse by the previous leadership in Congress. They implemented a number of Fairness Rules that empowered the minority party leadership to force open debate on bills (among other things). Gingrich in effect gave more power to the new Democratic minority than he and his predecessors had.

        These rules made passing legislation more difficult and were done away with by Pelosi in 2009 (http://www.washingtontimes.com/news/2009/jan/07/house-faces-early-partisan-fight-over-rules/?page=1)

        I appreciate your comments and time Yves

        1. Art Eclectic

          “Many have not been, degradation of the family, drug culture…”

          I actually had some respect for what you had to say until you got to that part and turned into homophobe and crusader against people having freedom to enjoy whatever substances they choose. Just like every other Republican, what you really want is control over people’s private lives so you can make sure they’re living according to your preferred choices instead of their own.

          1. DownSouth


            These partisan apologists like James always try to make it sound like it is they who are with the angels. The reality, however, is something very different.

            What I picked up on was his touting of laissez faire. But anarchy-for-all is not what the Republicans are all about. What they’re really about is anarchy for the rich and powerful, and tyranny for everyone else.

            The Republicans have claimed the mantle of anti-government and laissez faire, and they celebrate the demise of the welfare state. But what their historical revisionism always omits is that in the place of the welfare state came the secuity state.

            The size of government has continued to grow just as fast, if not faster, under recent Republican administrations as it has under Democratic administrations. And granted, the old welfare state was riddled with problems. But given my druthers, I’ll take the old welfare state over the new security state any day.

            Most lamentably, the Democrats have now emulated the Republicans in their abandoment of the welfare state in favor of the security state.

          2. James

            @Art Eclectic,

            I appreciate the previous support, but I’m honestly confused by your comment. What did I say that was homophobic?

            I have to assume you are referencing my comment about degradation of the family. I was not even thinking about homosexuality when I wrote that. I was just thinking about it from a pure numbers standpoint. The number of children born out of wedlock, the number of divorces, waiting until later in life to marry, and having fewer children. Things like that. It is a problem. You can look at education and crime statistics and clearly see that people that are born in single parent homes or homes where the biological father/mother is absent generally perform worse in school and commit more crimes. I don’t know if this is happening because of the rise of urbanization, the free love culture to arose after the 60’s, greater careerism from women, or a combination of these factors or none of them, but it is a problem.

            Granted we don’t have the problem W. Europe does (people just don’t get married and have kids), but we have a problem.

        2. PQS

          Per DS: “The Republicans have claimed the mantle of anti-government and laissez faire, and they celebrate the demise of the welfare state. But what their historical revisionism always omits is that in the place of the welfare state came the security state.”

          Let’s see….War on Drugs, War on Women, War on the Poor, War on the “Illegals”, War on the Middle Class…it would seems, James, that the GOP is very good at waging war. And turning “cultural shifts” into major campaign issues, playing upon the fears of their base. Does anybody doubt that the fundamentalists in this country wield far, far more influence and fellow travelers within the GOP than their numbers actually should allow? (Witness the fact that this Congress’ FIRST actions involve….wait for it….restricting abortion. Really??!? In the worst economy since the GD, and our “leadership” wants to focus on women’s bodies?!)

          Are the “Dems just as bad?” From this article, apparently so. However, the legacy of the GOP using cultural issues to divide and conquer is long and storied, and their use of dogwhistles is practically prior art.

          1. Pixy Dust

            Re DownSouth

            “The Republicans have claimed the mantle of anti-government and laissez faire, and they celebrate the demise of the welfare state.”

            Of course they do. The Welfare State has exploded with American citizens’ well-being and civil rights as collateral damage. With deregulation, corporations – including non-American – are recipients to the kind of welfare that once kept a minority of American citizens from complete destitution. But the costs have mushroomed. We just call them tax-breaks and subsidies.

            In my opinion, the so-called Security State intends to make sure the well-being of American citizens never again interferes with the success of unfettered capitalism that benefits a very very small minority.

        3. JTFaraday

          “I don’t know if this is happening because of the rise of urbanization, the free love culture to arose after the 60’s, greater careerism from women, or a combination of these factors or none of them, but it is a problem.”

          Well, if you don’t know *why* something “is a problem,” how ever in the world do you know how to vote based on it?

          Also, if that’s why you’re working for the Republicans, I think you got played.

    2. Jim Haygood

      ‘There truly is a large divide between the ruling doctrine of individuals on the right and left in this country.’

      Oh, please! Not on the key issues. Such as the global military empire and the endless wars — that’s a thoroughly bipartisan project. So is the utterly failed, corrupt war on drugs, which has done so much to destroy civil liberties — another bipartisan project. TSA goons at the airport — bipartisan. The Bush/Obama corporate Looterfest — same. And on and on.

      The alleged left-right ideological battle is like the fierce Chevy vs. Ford battles that used to occupy adolescent schoolboys. When you grow up, you learn that functionally, they’re all just cars.

      Media-publicized partisan ideological battles are a diversion, to deflect attention from an unconstitutional, corrupt political duopoly which has governed the U.S. for 150 uninterrupted years, and in the process has decisively run it into the ground, rendering it insolvent.

      Both of these malicious, illegitimate parties should be RICO’d into nonexistence, and their leadership prosecuted on all of the phony, trumped-up derivative federal crimes they’ve legislated into misbegotten existence: mail fraud, wire fraud, conspiracy, money laundering, lying to federal officials, etc. etc.

  5. Frago

    Industrial Legislative Complex,everything you need in one convenient location. We offer sock puppets, botnets, daily talking points, lobbying and prepacked legislation targeted to any industry or special interest groups. Sign up today.

  6. Valissa

    Thanks Yves for posting this really useful information!

    I also enjoyed the self-identified Republican attempting to excuse his leadership for this particular method of exercising of power. He makes some excellent points too. But let’s face it, the rank and file members of both parties are pretty clueless about the depth of money and power aspects of politics and waste an inordinate amount of time arguing and carping on ideology and “principles”.

    If people want to focus on ethics and principles perhaps studying religion or philosophy, or putting energy into a non-profit that helps people, would be a more satisfying use of their energy. Politics is a dirty business and ALWAYS HAS BEEN, including before the Republicans came up with their brilliant money scheme.

    1. Rabid Cranky Troll

      I don’t think anything the Republican wrote is unequivocably an “excuse [of the Republican] leadership.” Rather, it seems to me he is suggesting the Democratic leadership was playing plenty dirty themselves, prior to Gingrich & co, given their long-standing success and stranglehold on the Congress.

      1. Valissa

        You are a cranky one! Trolls love to cherry pick sentences to quibble about, so I understand your pointlet. Perhaps you need to reread my last sentence to see that we may actually be in agreement. Jeez, I know trolls hate that ;)

        1. Rabid Cranky Troll

          Haha. No I’m not cranky today. I reuse the handle so others may recognize me from troll-fests past. And yes, you and I are largely in agreement when it comes to other points raised in your post. Which is why I ignored them and picked out the only troll-able one I could find! :P

  7. john

    The contest of ideas that is supposed to be the core justification for democratic process has been turned into a market place. A bazar rather than a forum. Gingrich proved that politics could function like an investment, not an investment like Levy or Kalecki meant, but none the less a play where money up front could yield a lot more down the road.

    What we are seeing is a new and more aggressive integration of politics, now functioning as a market, into the larger markets.

    1. Rabid Cranky Troll

      Democracy was always a false narrative. The State was created by the rich, for the rich. At first, the excuse was “God wants us to rule you!” Now it’s “You elected us, therefore we rule you!”

  8. Rabid Cranky Troll

    For people who aren’t familiar with it, Tom Ferguson is the author of a book called “Golden Rule: the Investment Theory of Party politics.”


    I took his thesis in this book to be that the American political system was always (at least out to the late 19th century) dominated by “investors” – business interests that financially backed the two parties.

    Here’s another book that makes largely the same case:

    I wonder how he squares that thesis with this idea that rule changes by Gingrich & co. were critical in corrupting the Congress?

    1. Valissa

      Excellent point Monsieur Cranky Troll! I’d love to hear his snawer to that one. I personally do not blame the Republicans for corrupting congress. Corruption is a poilitical Universal. But then I am an ornery independent and not a member of any political party… I think both blaming and excusing are a waste of time.

    2. Yves Smith Post author

      The paper is very clear, and I suggest you read it. The implementation of rule changes and a “pay to play” system, with committee appointments being based on how much money you Congressmen kicked in to the party rather than on seniority, were biggies, but Ferguson sets forth other mechanisms too and the impact they had.

      The article is about polarization, the worsening of corruption is a secondary effect. My emphasis on corruption may have given an distorted impression of what the paper is about.

    3. CS

      Fascinating – I’d read Kolko as an undergraduate in the course at Reed College “American Intellectual History” taught by the great John Tomsich. I hadn’t forgotten Tomsich, who really challenged his self-branded radical students to think about history, but until this reminder, Kolko had dropped off my radar. Thanks for the refresher. Of course, I never forget the two basic capitalist tenets; secure resources and guarantee markets (stability) which characterize their wars and politics.

    4. Foppe

      “I wonder how he squares that thesis with this idea that rule changes by Gingrich & co. were critical in corrupting the Congress?”
      Assuming for the moment that the broad thesis is correct — and it is hard to dispute it, as there is no public funding — it seems to me that the more important question is how the fact that the public was able to organize itself to set up alternative sources of funding (unions) for the political parties. The ascent of Gingrich et al (and Clinton especially) coincides with the destruction of those same unions, and the dems turning to other sources of funding [again].
      Basically, money gives you ‘voice’ (and loyalty), and the fact that the public had enough money to sponsor their own candidates was the historical exception, and now that wages for those median citizens are dropping like a rock, while unionization is in many cases actually outlawed, politicians start to listen only to the narrow interests of their donors of old again.

      1. nonclassical


        “American Dynasty”, by Kevin Phillips=historical documentation of the Bush family-from munitions, war supplies, to energy-oil, “devolved” (if such is possible) to “financial services”..private equity, etc…

  9. Salviati

    We live in a one party corporate state, where on the essential issues: defense spending, healthcare, regulation, taxation, and foreign policy, you would struggle to find any difference between the two parties. The supposed “polarization” is just theatrics to create an image that there are competing interests in Washington.

    Practically every piece of right wing legislation that Obama signed was completely predictable, even the theatrics around it are now predictable. Trust me when I say this, every 4 years Americans vote to select their dictator. The first couple years of their reign they are enormously popular. If they wanted to enact change it would be very easy. All they would have to do is to issue the command to the masses, and you would see K Street in flames. That is the power of a popular dictator. They don’t because they are all the same.

    1. Igor Slobidovich

      In soviet Russia, we also had election. Although there was only one party, we had more choices than in America.

      1. Salviati

        Soviet Russia also had an outstanding education system, primarily in math and science. As a math teacher in an urban district several of my colleagues were Russian, and had been educated in the former Soviet Union. Their knowledge of mathematics was light years ahead of the American educated teachers, yet because of the racist, provincial and nepotistic nature of our education system, they are stuck in these academic hellholes. One of the most shameful things I have ever witnessed was these teachers being beaten down into submission by the math illiterate charlatans from the School of Education who rule American public education. They had some of the most prescient observations about the coming collapse of the American empire.

  10. Igor Slobidovich

    In post-Soviet Russia, oligarchs invested in Yeltsin. They said Yeltsin is only man in politics with 10,000,000% return.

    In modern America, oligarchs also invest in politician. It is better than running real business.

  11. larster

    Politics has always been dirty, however, the size of the pot breeds more corruption. There is so much money floating around that there is bound to be major scandals ocurring or being found out. Does anyone thaink that Clarence Thomas’ wife received a $500M donation to her Tea Party because she is such a beautiful, intelligent, captivating individual? The only question is what was the quid quo pro. Before the R’s jump up, this is also ocurring on the other side. It’d called human nature.

    The other issue is tha running or appearing to run for pres should not be a business enterprise. However, that is precisely what the Fox News is doing with the Palin, Huckabee, Trump circus. nremember when they had to have gigantic fundraisers to pay off campaign debt? I do. Now they just figure out how to use it for personal gain.

    1. Mark

      $500 million is quite alot and I think it exaggerates the actual donation by about 1,000 times. $550,000 is quite a bit less. I do believe in two types of political money: love money and tribute money. Tribute money changes quite dramatically according to the party in power (or perceived to be coming into power). Love money does not change according to out or in-power status (unions give 95% or more to Dems regardless, just as the energy industry donates lopsidedly to REpublicans). The donors to Mrs Thomas were anonymous, but I would guess that any donor to her group is in the love-money category — a hard-core Republican donor not likely to have donated much to Democrats.

      It is fashionable to be a cynic about money and politics, but many donors do believe in the rightness of this or that policy, on both sides, I might add.

  12. Jim

    One of my gripes with Thomas Ferguson (who has, over the vears, done some excellent research–especially his Investment Theory of Party Politics), most of the MMT crowd (who have, indeed, given us valuable insights into how our current fiat monetary system actually operates)and many of the New Deal 2.0 commetariat, is their tendency to end up supporting a Market vs State narrative (i.e. an “enlightened” New Deal(as the most we can hope for in any political/cultural/financial transformation) vs the polarizing “evil” market fundamentalism (as represented in this paper primarily by the maneuverings of Gingrich, Phil Gramm and Halely Barbour).

    Such a narrative usually ends up endorsing a traditional left (more powerful state) vs right political solution which I believe is clearly inadequate.

    For all of those individuals who see the solution to our problems in a more sophisticated New Deal(there would be a different set of questions if I was adressing primarily the right) I have the following questions:

    Is there a process of social disintegration taking place in the U.S. which is independent of the workings of capitalism?

    Is it conceivable that the very process of nation-building also gradually subverted the original communtarian concerns of many of our founders?

    Was the traditional left cure for capitalism (the endorsement of a powerful state to counterbalance the capitalist class) as bad as the disease? (i.e. the eventual creation of a modern public bureucratic class as perverse as the capitalist class it sought to replace and with whom they now work in tandem).

    1. readerOfTeaLeaves

      Off the cuff remark, as I’ve not read Ferguson’s paper, so really shouldn’t be commenting on this thread. But here goes:

      Market fundamentalism, which seems to be the core OS, or intellectual DNA of the changes we see exhibited in US politics over the last 30 years, is a form of capitalism that came along right at the historical moment when ‘scarcity’ (clean water, clean air, abundant groundwater, timber, fisheries…) became a catchword: late 1970s-, early 1980s.

      One response to that series of developments was the environmental movement; an attempt to come to grips with the economic problems posed by limited resources, growing pressures on public (and collective) goods, and increasingly complex social and political systems.

      The alternate response was the GOP-market fundamentalist mania. Perpetuating that economic system required rewiring the political systems to support that economic ideology (which in turn justified that mania). This system was extended to include regulatory agencies, which became subject to intellectual capture.

      A system focusing on public goods – which is the business of government – doesn’t tend to give good campaign contributions. Consequently, proposals like public campaign financing threaten to put a dagger in the heart of crony capitalism and the political system it requires. There is no end of pandemonium when serious people talk soberly about the need for campaign finance reform.

      But the only way to ensure public goods is to have the *public* paying for the political campaigns that feed the system.

      That would be anathema to those who prefer their Congresscritters bought and paid for at bargain, tax-deductible (via PACs) prices.

    2. Valissa

      Have been mulling over what you said and trying to find a succinct way to respond to your most excellent points. Agreed that the dualistic narrative is limited and extremely oversimplified (a classic symptom of propaganda), and ultimately unsatisfying if you are any kind of student of history… or, uh… REALITY. However I noticed that you didn’t put a parenthetical after “right political solution”.

      Do you really think the right is any less “statist” than the left? If I recall correctly, one of the big criticisms of Bush from within the Republican party (particularly from paleocons and libertarians) was that Bush was a Statist. Show me a recent Republican president who wasn’t a Statist (in reality if not in speech )? After all, the President is the Head of State, a VERY POWERFUL position… how could this not drive their perspective? Despite whatever political ideology their “side” might espouse. I think that the two parties are statists in different ways, which is played out in the heavily propagandized battle of Market vs. State (amazing battle of reifications!) to enthrall the marks of both parties into thinking there is some kind of real choice (much like pro-wrestling).

    3. JTFaraday

      “Was the traditional left cure for capitalism (the endorsement of a powerful state to counterbalance the capitalist class) as bad as the disease? (i.e. the eventual creation of a modern public bureucratic class as perverse as the capitalist class it sought to replace and with whom they now work in tandem).”

      I kind of get what you’re trying to say about the state and I’ve wondered this myself without really having a firm answer.

      But with regard to that “public bureaucratic class,” it sort of seems to me that currently we *don’t* have a “public bureaucratic class,” that views itself as such.

      Instead, we have free agents who operate, in politics, in much the way that any other careerist operates in the pursuit of their personal, individual career objectives, which includes the pursuit of financial remuneration. You see this perhaps most clearly in the SEC style revolving door position, where taking a regulator job is effectively just another position in the financial sector.

      If anything, maybe there once was a “public bureaucratic class” but working in government ostensibly in the public interest has long since been transformed into just another career option for individual careerists.

      Private industry has taken advantage of that mentality.

      Also, just look at someone like Scott Walker. By any measure, right now this guy should be unemployed with the other college dropouts. Scott Brown, who took over Ted Kennedy’s political sinecure, he’s another one with limited prospects who is in politics in order to have a career–now that his modeling days are over. These are the people who are ringing up the Koch Brothers for funding (or taking their fake calls).

      Even if our elected officials wanted to function like a “public bureaucratic class”–and I’m not saying they do– they wouldn’t survive because they *aren’t* such a class and they don’t have public sinecures. They are exposed to “the political market” in every way. It’s just that the political market is really slanted toward the same oligarchical result that many of them also happen to want.

  13. Sherparick

    I enjoyed reading “Rubicon,” Tom Holland’s book on the last decades of the Roman Republic and its transition to Imperial deposition. http://www.amazon.com/Rubicon-Last-Years-Roman-Republic/dp/1400078970 The reviews don’t touch on what I thought was a main theme, the growing wealth and concentration of that wealth with a few in the late Roman Republic. Further, as they became ever more wealthy, their arrogance and greed for more wealth became unquenchable. It created a dynamic that ultimately destroyed the Republic.

    Nothing human lasts forever. I hope we can solve our problems, but it seems to me that we have gone very far down the wrong path and I don’t think we can go back, or at least our leaders don’t want to go back.

    1. cro


      Interestingly, while I would no doubt agree that concentration of wealth and the sheer power that new wealth provided the rich helped bring about the end of the Roman Republic, Peter Brown makes a great case for how the same helped end the empire. (Peter Brown, ‘The World of Late Antiquity AD 150-AD 750’) Along with cultural shifts, Brown shows how the shift to focusing on the Eastern Empire (then as we say Byzantium) with it’s much greater wealth if less defensible frontiers, brought about the end of the Western Empire. The concentration of wealth into roughly ten great families led to distortions of society that made the continuation of government nigh on impossible. At least, any continuation of classical culture as it had been known. That is not the only factor. It was as much a symptom of larger forces as it was a cause, but instructive nonetheless. Nations, States, Empires, etc do not do well when they lose control/governance of their territories. They do not seem to fare well for long with declining populations. Armies that become perennial king-makers eventually look more to their own member’s interests than to their borders. Matching outside forces armies of increasing ability with troops of declining quality does not make a more secure state.

      But those rich families survived the empire.

      1. cro

        (And sorry, I should have said ‘ten great families in the WESTERN empire. He goes on to compare the situation in the East where there may have been ten families of similar wealth in any great city)

  14. Malagodi

    I want to suggest that the behavior of both the Republicans and Democrats in this restructuring is not a matter of moral human failure or turpitude, but a rational behavior considering their role in the overall environment.

    My view is that the government is, and always has been, everywhere, a ‘branch’ or ‘division’ if you like of the larger economic system. It is the division that manages the social economic infrastructure, ie. it manages regulations and social order ~for the benefit of the larger enterprise.

    In the U.S., we appear to have a coalition government of two (private) parties that contend with each other for increased revenue flow through their particular channels. When one party is dominant, more funds flow through their channels, but the non-dominant party suffers only a reduction in flow, not a cut-off. It is this dynamic that makes the system work and prevents imbalances like fascism or communism.

    The revenue flowing through the political channels of both parties consists of funds necessary for maintaining the actual infrastructure, like roads and prisons and military and social stability (like Medicare) and the ‘administrative’ funds collected by the parties for their services.

    With this perspective, it is easy(or easier) to see why we have a such an inequitable distribution of [the] wealth [of the nation.] Any policies enacted that benefit economic activity, which by its nature flows capital into concentrations, can be seen as the ‘revenue’ side. Any policies that require expenditures for infrastructure or stability can be seen as the ‘expense’ side, the cost of doing business. Like any division of any enterprise, the goal of the division is to produce as much profit for the larger enterprise as possible.

    To me, continuing to make our analysis based on human behavior and morality is unhelpful. To suppose that the government is ‘of, by and for the people’ is to believe in the tooth fairy. People used to think that the Earth was the center of the universe. People now, in our arrogance, seem to think that our government is the center of power, out of which the entire social and economic universe unfolds, and that somehow ‘we’ are in control. Some say the problem is a tiny ‘elite’ somehow controls this vast system. That ‘they’ have somehow ‘stolen’ our government.

    The economy is autonomous.

  15. Dan Duncan

    Our sorry state of affairs does not come from either “Republican” or “Democrat”. It comes from one group and one group only: BABY BOOMERS.

  16. Jade Jaundice

    extent of corruption may surprise even jaundiced readers. Both houses

    If it moves, tax it. If it keeps moving, regulate it. When it stops moving, keep your foot on the brakes until you get donation from its lobbyists.
    ~~I can’t believe we are on the fnikcug moon~

  17. Paul Tioxon

    I read Mr Ferguson, I am not surprised by the way money is raised and through what means, channels and who has to go out and get it and what they get in return for it. It is hard to know whether I should just insult him for providing the specifics of the obvious, as if there was some news worthy item here or belaboring what my grandfather knew when he went on strike during the Red Summer of 1919. But we have to contend with the here and now. First things first. Does anyone really think that any formal organization can accomplish anything without the money commensurate to the task to be done? Does the good will of the people at the ballot box mean that power will be shared without the almost certain counter punches of reactionary, conservative business interests, who used the Klan in the South, Pinkerton men and hired thugs?

    Now that the middle class has been bloodied by the republican policies, will there be a reckoning. For a long time, student radicals knew what I heard Ralph Nader say in June of 1979, on the campus of the University of Texas in Austin. The White House may have a Democrat in it with a solar collector on the roof, but it is surrounded by and held captive by overwhelming corporate interests whose power could be over come with one thing. MONEY He said, if every American gave just one dollar, we could buy back Congress from the corporations. Back then, it would been about 1/4 of billion and that was any eye popping amount of money. But we all got the point, we didn’t shake our heads and cry out to the gods. We saw America in that light, back then, as controlled by cash.

    I do appreciate the empirical study, and all of the footnotes and references, a new generation will need this. It has not experienced being shot dead at Kent State or Jackson State. My kids did not grow up with Malcolm X hating their guts, but with Barack Obama getting them Pell Grants and Stafford loans. Most Americans, even with wages stagnant, and opportunities diminishing, were not beaten down to inhuman levels of intolerable political and social oppression. If you read about the everyday lives of Egypt and Libya, you know why they are in revolt. It is a living hell for them and clearly it is better to fight and die than live like a worm and probably die anyway. We have not had to live like bugs. But now, with tens of millions unemployed, bankrupt, foreclosed, penniless and still in debt, working more jobs and more hours, we are getting a bitter first taste of the worm like existence. The mocking display of power politics let loose under the financial aegis of the likes of the Koch brothers, the heirs to every union hating, New Deal hating, Social Security hating and every other form of bad faith and ill will towards fellow people and citizens is just the opening barrage of the struggle for control of the state machine. They already own everything else outright, now they come for what’s left without their name of ownership proudly displayed. If we have to shovel bag loads of cash into the hands of each and every elected official, let’s get to work.

  18. Francois T

    Since the Vendors have invaded the Temple, let’s hope we won’t need a Jesus of Nazareth to chase them!

  19. Schofield

    “anarchy-for-all is not what the Republicans are all about. What they’re really about is anarchy for the rich and powerful, and tyranny for everyone else.”

    Sounds like an ape society to me with alpha-apes (Neo-Liberals) doing what they please till the rest get pissed off and decide to engage in some counter-dominance.

  20. Dean Sayers

    I’ve been reading Golden Rule: The Investment Theory of Party Competition and it has a lot of startling revelations – for instance, Hoover left two contradicting primary sources to hid the influence of JP Morgan on his (contractionary) monetary policy.

    The influence of labor-sensitivity is shown to be proportional to the labor:capital ratio in a given firm, and this translates into disparate policy positions among politicians who acquire backing from different firms.

    T. Ferguson offers a critical analysis of the New Deal which largely places firms like Nat’l City Bank and Chase in opposition to JP Morgan – in Chase’s example, they go so far as to help bankroll (with Ford) the racist “protocols of zion” since the “House of Morgan” is publicized as being Jewish.

    There is no reason not to read the book – here is a good portion of the beginning.

    For my part – I’m excited about this new paper and I’ve been perusing it in down-time at work.

  21. Hugh

    The point that I would like to make, if it has not been made by others, is that the construction of our current kleptocracy dates back to Carter and Reagan some 15 years before Gingrich, and I would further note that under both Carter and Reagan there were Democratic majorities in Congress.

    I would also observe that while the Republicans were able to spike Clinton’s healthcare plan and use that in the 1994 elections to gain control of both Houses of Congress, and while this did push Clinton further to the right, we have to recognize that Clinton ran in 1992 as a DLC Third Way “New Democrat”. So the main effect of Gingrich and his Contract with America was to preclude major new programs from Clinton. It did not turn him into a neoliberal Washington consensus Chicago School type. He already was one. Remember that Clinton’s healthcare plan, much like Obama’s, was negotiated with the insurance companies’ interests, not ordinary Americans’, predominant.

    I agree that our politicians, all of them, are bought and paid for, and not by us. But I am unsure what the impact of the Gingrich Revolution has actually had on policy. I would say that Gingrich, Delay, and their Democratic counterparts, especially Emanuel, made it easier to be corrupt.

    I would disagree that the Republicans have forced the Democrats further to the right. I think the Democratic officeholders and elites have not gone anywhere they didn’t want to go. In this, we need to distinguish between Democratic party rhetoric and their actual actions. This brings us naturally to Obama who embodies the chasm between the two. In 2009-2010, the Democrats held all the levers of power. Yet they enacted an essentially Republican agenda. This is not to day that they fought for a traditional Democratic agenda and, despite their majorities, lost. They never tried.

    I have had this discussion many times before. Don’t tell me that the Democrats were stymied by the 60 vote threshold in the Senate. They could have changed the rules on the filibuster on the change of session in January 2009. It wasn’t like they didn’t know what was coming. Mitch McConnell in November 2008 just weeks after the election announced his strategy for using the filibuster to obstruct anything he didn’t like.

    Don’t tell me either that Republican obstruction was the sole, or even main, reason for what followed. We keep talking about the Imperial Presidency and how weak Congress has become vis-à-vis the Executive. Obama, as an Imperial President, had wide latitude to act independently of the Congress on a wide range of issues: the wars, detention, Guantanamo, the Fed, DADT, investigation and prosecution of Bush era criminality.

    The truth is that given the chance, because in fact they were given the chance, the Democratic elites would still do what they did, that is pursue a conservative corporatist friendly to the rich agenda.

    Finally, I would say that the pay to play nature of the Democratic party is an institutionalized part of the party. It is not run by the leadership. I mean there is no leader more worthless and impotent than Harry Reid, and that’s on his good days. The atmospherics are a little different in the House, but all in all Pelosi was much the same. Most of the fights that we see between the parties or in the parties are just kabuki. It’s about spectacle for the rubes. It’s about egos, but it has almost nothing to do with real policy differences. Whether it is Pelosi, Reid, Obama, Boehner or McConnell, it is going to be a corporatist imperial agenda.

    1. Dean Sayers

      It’s my understanding that the “kleptocracy” has been around for more than 2 centuries – but that recent trends (i.e. massive deregulation, corporate handouts) started under Ford…

      1. Hugh

        We have a fairly discrete process in the construction of the kleptocracy we now live under. It just muddies the waters to extend its origins further into the past. The characteristics of kleptocracy have been around forever, but what we have now is unprecedented. All the political players across the board are kleptocrats and there is no countervailing social or political movement to block them.

        1. Dean Sayers

          I feel like I’m plugging T. Ferguson, but a lot of the points he brings up are relevant and fresh in my mind. In the same book (pp. 57) Ferguson describes the “loco foco” (anti-financier, free-marketeer group within the Democrat party during the 1830s-1840s):

          “The Loco Focos, whom two generations of historians have treated as virtual Jacobins because of their agitation against financiers, have recently been demonstrated to have won support from literally hundreds of New York City bankers and merchants, whose plans for “free banking” and other reforms could plausibly be passed off as “antimonopoly” measures.”

          There we have it – a free-marketeer astroturf campaign from the 1830s. As far as I can see it, the “gilded age” is still gilded in our memory of history today.

          I will concede that contemporary measures taken by our political overseers are unprecedented in certain magnitudes and dynamics, but I am not sure if this fundamentally changes the division of power. I will point out one caveat, however: power systems always bear marked differences between incarnations, even if their benefactors and losers remain more or less the same. That is – no two historical settings are quite alike.

  22. Jack Parsons

    Campaign finance is a case of supply v.s. demand. The supply is endless because investment returns are so high. Supply cannot be quenched by public financing, there will always be a way. It’s just like the drug war: demand must be suppressed.

    Some of this was driven by the costs of campaigning. If this can be suppressed, that would be a boon. For example, no media campaigning for 2-3 weeks before the election. Boots on the ground, yes. Posters, yes. But no mass media or Internet promotions. That last will be really hard to control.

  23. SteveM

    “Under Gramm and like minded Senate Republicans, partisanship in the upper chamber grew at close to the same rate as in the House, if less flamboyantly (Figure 2). A radically different tone began to envelope a body long celebrated for comity”

    You’re selling a myth. It would have been news to Robert Bork and Bob Packwood to learn of this supposed era of “comity” in the Senate before the Big Bad Republicans ruined things with their “partisanship”.

  24. Jack Parsons

    There’s an old joke: “Why are faculty politics so vicious? Because so little is at stake.”

    Until the 80’s the US had a whole lot at stake. When the Soviets finally croaked (a total surprise to the CIA) suddenly there was and is no external threat. There’s nothing to be bipartisan about: there is nothing at stake but the spoils of a dissolving empire.

  25. Bought and Sold

    We need to dismantle the dog and pony show quick. Exhibit A from WV: Shelley Moore Capito, elected by Citibank.

  26. FatCat

    Fat Cat here so all you chumps better listen good, ’cause I don’t like to repeat myself. Capiche?! Let me make it simple, so even you can understand:

    1. I and those few like me are the Elite. The superior. The endowed. We are also rich, and powerful. Did I mention rich? And powerful too. Also, superior.

    2. I and my friends have invested a lot of good money in this Congress, this President, and this Supreme Court. Not to mention my investment at state and city level. I like to get something for MY good money, so I expect results from MY representatives. They are MY people. Obama is MY man. Bush was MY man. Both parties are MY parties. The same goes for the media. Fox is MINE, CNN is MINE, MSNBC is MINE, New York Times is MINE, HuftingtonPost is MINE. They are all MY whores to screw with YOUR minds. Got that?

    3. The United States of America is MY country. I own your job, your home, your kids’ school, your health insurance company, the hospital where your doctor works, the church you go to, your bank where you save your meager 2-paycheck life savings. I own it all. I own you, and I own your body, soul, and mind. I even own the cemetery where you buried your grandmother… and by the way, I plan to turn it into a nuclear power plant next month, and MY president Obama already approved and will finance it with tax money. I do what I want here because I own the land, I own the laws, and I own the lawmakers. I own it all.

    So what can you do about it, chumps? How can you stop me? How can you stop me from privatizing your kids’ school? How can you stop me from shipping your job to China and cutting your unemployment to 14 weeks? How can you stop me from busting your unions? How can you stop me from privatizing your highways? How can you stop me from doubling the price of gas just because I want to see you squirm? How can you stop me from selling your family hormone-infested milk and meat? How can you stop me from building a nuclear power plant over your mother’s grave? How can you stop me from dumping toxic waste into your drinking water? How can you stop me from starting to take away your social security and Medicaid and Medicare and throwing your grandmother in the streets? You can’t stop me, chumps. It is too late. Oops, I have been just told by one of my good governors from Wisconsin here with me that I have been doing all those already.

    I heretofore declare victory. Losers!

    Warm regards,
    Fat Cat

    1. The rest of the World

      Hey Fat Cat,

      That sounds about right, but you left out the part where you go around the world propagandizing, torturing, maiming, raping, murdering, polluting, exploiting, and using nuclear, chemical and biological weapons of mass destruction in our name. Next time get it straight.

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