Let's start with a wise and telling quote from an anonymous source. Who wrote this?
[When running for office a second time,] the path of least resistance — of fund-raisers organized by the special interests, the corporate PACs and the top lobbying shops — starts to look awfully tempting, and if the opinions of these insiders don’t quite jibe with those you once held, you learn to rationalize the changes as a matter of realism, of compromise, of learning the ropes. The problems of ordinary people, the voices of the Rust Belt town or the dwindling heartland, become a distant echo rather than a palpable reality, abstractions to be managed rather than battles to be fought.
Those words come from Barack Obama's The Audacity of Hope (2006). That passage was quoted in Robert Borosage's excellent post Big Money in Politics: The Clinton Defense Won’t Cut It. Borosage is a well-known progressive, but he manages to take the larger view I laid out in The Flatland (Naive) View of Corruption.
This excerpt about the nature of corruption contains another wise quote from Obama.
Not Character, Common Sense
Few Democrats doubt that big money corrupts our politics. This economy does not work for working people because the rules have been rigged to favor the few. They are rigged by politicians and officials who too often are more responsive to their donors than to the voters that put them in office.
This argument is not controversial. Academic research confirms it. Politicians in both parties bemoan the hours they spend each day soliciting rich donors or schmoozing with lobbyists at unceasing fundraisers. Virtually all Democrats argue that we have to curb big money in politics. They’re united in calling for overturning Citizens United and the other Supreme Court decisions that have opened the floodgates to unlimited, often secret corporate money in our politics.
When Sanders questions Clinton about her funding from Wall Street, her speeches to big banks and other interests that brought her millions personally, and her array of Super Pacs, she charges Sanders with making “false character attacks.” But the influence of campaign contributions isn’t about character, it is about association, gratitude and access.
No Democrat doubts President Obama’s character. Yet, he wrote in the Audacity of Hope about the “money chase:”
As a consequence of my fund-raising I became more like the wealthy donors I met, in the very particular sense that I spent more and more of my time above the fray, outside the world of immediate hunger, disappointment, fear, irrationality and frequent hardship of the other 99% of the population - that is the people I’d entered public life to serve.
This isn’t about character [as Hillary maintains]. The “money chase” forces politicians, including Secretary Clinton, to spend immense time soliciting for deep pocket donations. Her contributors get access, earn gratitude and get a hearing for whatever case they want to make. Politicians learn what subjects to avoid, and begin to echo views are widely shared among the donor class. Sanders indicts Clinton’s fundraising not because he believes she is particularly corrupt, but because he knows she is human.
That aside, the important point is that being corrupt (or corruptible) is part of human nature. Corruption follows from strong social ties among those with common interests. Simple quid pro quos (bribes) are almost beside the point, as Borosage argues. Most importantly, we are talking about elite interests, which always dominate politics everywhere and all of the time.
Hillary argues that Obama took Super-Pac and Wall Street money, and he isn't corrupt, right? Borosage knows otherwise.
In response to Sanders, Secretary Clinton repairs frequently to her Obama Defense: “Make no mistake about it, this is not just an attack on me, it’s an attack on President Obama. President Obama had a Super PAC when he ran. President Obama took tens of millions of dollars from contributors. And President Obama was not at all influenced when he made the decision to pass and sign Dodd-Frank, the toughest regulations on Wall Street in many a year.
But Obama’s administration is, in fact, a testament to the corrosive power of money. What the FBI termed “an epidemic of fraud” by the big banks and others was central to the Wall Street wilding that blew up the economy and led to the Great Recession.
Yet the big banks were bailed out, while millions of homeowners were left to sink. Americans lost jobs, homes, and incomes, but the bankers kept their jobs and their ill-gotten fortunes, and no major banker went to jail. Sadly, the banks have ended bigger and more concentrated than before, and are till, as the Federal Reserve just announced, too big to fail.
This wasn’t because the bankers were innocent. The Justice Department has collected literally hundreds of billions of fines from the big banks for a range of fraudulent and criminal activities. The banks were fined, but no major banker was held accountable. Apparently banks somehow commit crimes without bankers being involved.
Why is that? As Elizabeth Warren has stated, personnel is policy. President Obama staffed his administration at its highest levels with former bankers and corporate lawyers. The Attorney General and the head of the criminal division came from and returned to a corporate law firm representing many of the bankers that should have been prosecuted. Not surprisingly, they worried publicly that prosecuting the banks might endanger the recovery.
Citibank received the largest bailout from the federal government. It would have gone belly up without it. It misled investors about the billions in toxic mortgage bonds it held. The Financial Crisis Inquiry Commission called on the Justice Department to consider criminal charges against its leaders, including Robert Rubin, Clinton’s former Treasury Secretary, and one of Obama’s major patrons. The referral was not pursued.
Why didn’t the SEC bring civil charges and demand criminal prosecution of bankers who brought the world economy down in an “epidemic of fraud?” Perhaps one reason is that the head of enforcement at the SEC, Robert Khuzami, was general counsel of the Americas for Deutsche Bank from 2004-2009, a bank at the center of the fraud.
This isn’t about character, bribery (quid pro quos) or secrecy. Money oils the revolving door that insures that Wall Street and other interests are well represented in any administration. The corrupting influence of big money is that is provides access to politicians, and influences their world view.
Borosage's view is entirely correct. Money is the grease, but revolving doors are social in nature. All these people—the bankers, the corporate lawyers who represent the banks—inhabit the same social world. As Obama said, when politicians are dependent on movers & shakers, they are inexorably drawn into their social network.
And yet, with respect to Wall Street, Obama failed, even though he knew the inherent dangers of playing the game. That brings me to the title question—what would wise governance look like? The answer is not as simple as we would like. Here's the beginning of an answer.
Knowing that human sociality, greased by money, necessarily fosters corruption, humans would take steps to minimize that effect. The simplest first step would be take money out of politics in so far as that is possible.
Unfortunately, that step is not sufficient by itself. You can take money out of politics, but you can't take sociality out of the human.
Character then becomes the issue. What kind of person are we dealing with? What does this person do for a living? A politician can be known through his social connections. Who are his friends? Who are his trusted associates? Who does he do business with? You know a person by the company he or she keeps.
And then, in this more ideal world, you would vote accordingly.