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Blogs, Reform of the governance of financial regulators (national and international levels)

Rights and finance: What to expect from the oddest US election in history?

What can USD 60 million buy these days?  A Caribbean luxury resort. Real estate on the Moon.  What about favors from the next US President?

The Center for Responsive Politics reports that hedge funds, private equity firms and commercial banks have donated almost USD 60 million to Hillary Clinton’s election campaign (and well over USD 100 million across the political spectrum this election cycle). In 2008, the total that all Democratic candidates and groups received from Wall St. firms was USD 14 million.  One change responsible for the surge in donor support is the 2010 Supreme Court ruling of Citizens United, that permitted political action committees (that support political candidates during election campaigns, without coordinating with their campaigns) to receive and spend an unlimited amount of money.

What is interesting amidst increased support from Wall St. for Hillary Clinton’s campaign, and the criticism she has received for being close to these Wall St. firms, is that she is espousing a tough plan to reform Wall St., close the tax loopholes that benefit the financial sector, and reverse Citizens United. In the backdrop we also see her close political ally on the campaign trail, President Obama, is still planning to pass the Trans-Pacific Partnership (TPP) during the post-election “lame duck” session, despite the Democratic nominee to replace him publicly changing course and speaking out against this mammoth trade pact.

So, what is going on?

Is Mrs. Clinton really changing her economic platform? Is Wall Street turning against a broad neo-liberal agenda?  Or, is this just base election season rhetoric – temporarily appealing to ‘left-of-center’ Democrats, who so energetically supported Senator Sanders bid for the White House, until she returns to business-as-usual as President?

Frankly, it is hard to tell at the moment, but a closer look at her donors on Wall St. reveals some interesting information.  J.B. Pritzker, a strong supporter of the Clinton campaign, having raised approximately USD 10 million for her campaign, and managing partner of the private investment firm Pritzker Group, told the Wall Street Journal that one of the reasons he has increased his support for Hillary Clinton’s campaign is because “I want to defeat Donald Trump. I believe that he would be terrible for our country.”

A generalized concern for the possibility of a Trump presidency is perhaps foreseeable among Wall St. firms, since they are typically given to predictability above all else – a quality not immediately associated with the Trump’s bid for President.  However, there are also other nuances to consider.  While Hillary Clinton is painted as being “in the pocket of Wall St.”, there is more to this point than might appear at first glance.

Most of the money Clinton has received from Wall St. comes from a handful of “the 1%.” Center for Responsive Politics data shows that of all her contributors across all sectors, the leading five individual contributors (totaling more than USD 55 million) are all from hedge fund or investment firms.

The question therefore is whether or not these donors can be accurately painted as representing an overarching Wall St. ‘agenda’?  Consider George Soros for a moment, number 3 contributor to Hillary Clinton.  He is on record stating he should pay more taxes (certainly not a popular position on Wall St.). Soros also supports closing the much maligned ‘carried interest tax loophole’ (part of the reason Donald Trump has so famously been able to avoid paying tax over the last twenty years), a position similar to that of other ultra-wealthy Clinton donors, Donald Sussman and James Simons (of Renaissance Industries – Clinton’s second-highest overall contributor).

While, for various valid reasons, this Presidential election may be labelled one of the strangest in living memory, it is worth adding into that discussion the scenario that is unfolding around Clinton’s economic plans and the influence of money in politics.  Evidence linking donor agendas to Presidential platforms is notoriously hard to uncover, but it does seem like an odd alliance has formed between the Clinton campaign and her ultra-wealthy contributors, who have supported for several years the need to tackle inequality, lax Wall St. regulation and tax loopholes.

Of course, a big unknown factor is whether or not these election promises morph into a would-be Clinton Presidential agenda.  But in the oddest of political climates, let us hope for common-sense to finally prevail so that we can begin to properly address what almost anyone can now see – that the current levels of extreme income and wealth inequality directly threaten human rights; and economic influence over government decision-making threaten the willingness and ability of Governments to respond effectively. If it takes the support of a few billionaires to change the situation, it would not even be close to out-of-the-ordinary after what we have seen in the last few years of US politics.

Dominic Renfrey Coordinates the Corporate Accountability Working Group (CAWG) of the International Network for Economic, Social and Cultural Rights (ESCR-Net) including CAWG’s Corporate Capture Project that addresses the undue influence of corporations on government decision-making.

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