Move by GE Proves Reversing Citizens United Would Be Useless

Move by GE Proves Reversing Citizens United Would Be Useless

September 1, 2015

By: Patrick Hedger-Policy Director, American Encore

With the rise of Democratic Socialist Senator Bernie Sanders, the issue of “money in politics” has come back to the headlines. Sanders, a candidate for president, has promised that if elected he will only appoint judges who support overturning the landmark First Amendment case known as Citizens United. The Supreme Court held that First Amendment protections apply to corporations and organizations and that the government cannot restrict independent political expenditures of these groups. While this should be widely seen as a major victory for free speech, the more commonly held view by liberals and progressives is that this ruling allows for too much influence by the rich and corporations in the political process. 

While there may be an outsized influence of big corporations, labor unions, and other powerful interests in the political and legislative process, clearly demonstrated by all of the special subsidies, tax loopholes, and regulations flowing from Washington, curtailing the First Amendment via a reversal of Citizens United is not the solution. This is proven by news made by General Electric (GE) today. 

GE announced it will no longer consider Dallas, Texas, as a location for a new corporate  headquarters. This apparently is meant to be taken as punishment for Republican congressmen who represent the area and opposed the re-authorization of the Export-Import Bank (Ex-Im), most notably House Financial Services Committee Chairman Rep. Jeb Hensarling. This is shameful behavior on the part of GE. GE is well within their rights to place their new headquarters wherever they please, but to use that decision as a stick against members of Congress on the issue of Ex-Im is beyond disappointing. This will undoubtedly create enormous political pressure in Rep. Hensarling’s district and others, as thousands of new jobs and millions in tax revenue will go elsewhere. That being said, how would reversing Citizens United stop GE, or any other company, from engaging in this kind of behavior?

The answer is obviously that it wouldn’t. Curtailing the speech rights of everyone, big or small, doesn’t stop the powerful from exerting influence in other ways. GE has plenty of ways to get its message across, but smaller corporations and organizations may only have the avenue of speech to voice their concerns with government. Limiting independent political expenditures of all groups still leaves the big fish like GE with outsized influence. So what is the proper answer to the question of how we get “money out of politics?”

The federal government controls an increasing share of the national economy through taxes, spending, and regulation. Programs like the Ex-Im bank further increase that influence. With this much concentrated power in determining the allocation of wealth and resources, the lure is natural for competitive companies and other interests. It is much easier, after all, to out-compete your rivals on Capitol Hill than in the market. Thus, if we want to see a dramatic reduction in corporate or labor union spending to influence decisions in Washington, we should focus on ensuring decisions in Washington stop tinkering with the mechanics of our market-based economy in ways that can favor one group or another. In short, perhaps the question shouldn’t surround how to “get money out of politics,” but instead focus on getting politics out of money.

Note: Ex-Im has bipartisan supports and opponents, however American Encore believes that the decision to let its charter expire was the right one. Ex-Im effectively used the tax dollars of all taxpayers and business to subsidize the international trade business of a select few powerful and well-connected corporations, like GE. It was one of the purest forms of corporate welfare engaged in by the federal government and a misguided relic from FDR’s New Deal. For more information on the economics of Ex-Im, watch the following video via the Mercatus Center:

It's Time for an American Encore