In this episode, FRONT RUNNING looks at the promises of draining the swamp that Trump had made and failed to implement. Lobbyists continue to write legislation and get whatever it is they want often over the will of the people. For this episode of FRONT RUNNING, Max and Stacy are joined by guests, Tyson Slocum, head of Public Citizen’s Energy Program and Ellen Brown, a public banking activist. They discuss the various swamp draining ideas which have been proposed from some of the candidates for president. Andrew Yang, for example, proposes ‘Democracy Dollars’ — a policy in which every voter would receive the same amount of cash to be used only to support their favored political candidates. If this does, indeed, give the citizen eight times more economic power than
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In this episode, FRONT RUNNING looks at the promises of draining the swamp that Trump had made and failed to implement. Lobbyists continue to write legislation and get whatever it is they want often over the will of the people.
For this episode of FRONT RUNNING, Max and Stacy are joined by guests, Tyson Slocum, head of Public Citizen’s Energy Program and Ellen Brown, a public banking activist. They discuss the various swamp draining ideas which have been proposed from some of the candidates for president. Andrew Yang, for example, proposes ‘Democracy Dollars’ — a policy in which every voter would receive the same amount of cash to be used only to support their favored political candidates. If this does, indeed, give the citizen eight times more economic power than corporations and their lobbyists, will this help? Tyson believes that corporations would just up their expenditure on buying political loyalty. Elizabeth Warren proposes a lobbyist tax on ‘bads’ above a certain threshold which would, thus, not harm public interest lobbying groups like Public Citizen, but dissuade corporations from outspending activists by so much. Could this combine with Bernie Sanders’ idea of banning for life any member of Congress from lobbying in the future to finally put an end to corporate influence over our politics? Tune in to learn more about the race to drain the swamp.
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Read the transcript below the fold
MAX KEISER: Welcome to Front Running 2020. I’m Max Keiser with Stacy Herbert. As we look at the issues and policies leading up to the election, today we’re looking at lobbyists. Stacy.
STACY HERBERT: Drain the swamp! Whatever happened to that? The swamp gets bigger. It gets deeper. It gets darker. With us today are Ellen Brown and Tyson Slocum. Tyson, of course, is a lobbyist himself in a way, for Public Citizen. You have some experience with this. $2.8 billion was spent last year on lobbying. The top five industries, big pharma, health insurance, oil and gas, Wall Street and electrical utilities. Tyson, you have particular experience with electrical utilities and oil and gas industry. How much influence do you see that this lobbying has on regulation and government action around those two?
TYSON SLOCUM: Everything. I mean corporate lobbyists continue to run the mechanics of Washington, DC. We have to remember that the 2.8 billion that was spent on lobbying last year, that is just a fraction of their total advocacy budget. Lobbying is only those direct expenditures that corporations and others spend to meet with federal officials in the executive branch or with Congress. It doesn’t include their ad budgets, their grassroots spending or their political contributions to either Political Action Committees or contributions directly to candidates or all the dark pools of money because of Citizens United. Corporations continue to set the agenda for most of the issues that Americans face every day.
MAX KEISER: Ellen, I was amazed in 2008 during the crisis that Citibank came in and other lobbyists in the industry came in to write the response to it. It seemed like there was no government officials anywhere around. Were you shocked by that or what were your thoughts on that?
ELLEN BROWN: Citibank was also responsible for getting rid of the Volcker Rule which was part of the 2010 Dodd-Frank Act.
STACY HERBERT: Well, following up on that, on the global financial crash, this was a defining issue that still continues to this day. We had Occupy Wall Street right across the river here in Manhattan. We are in Brooklyn. It was mostly people from Brooklyn who went over there, occupied Wall Street literally and Zuccotti Park out there. They wanted Obama. They voted for Obama because he promised hope and change. Who did he meet with straight away? He met with the heads of these banks. He did not meet with Occupy Wall Street. He did not meet with public banking activists. He did not meet with these sort of people, so what sort of outcome do you think that had on these TARP bills, on the Federal Reserve then intervening as well?
TYSON SLOCUM: Right. I mean no executives went to jail. The banks are bigger today than they were back then. It’s clear. All of these corporations understand that a cost of doing business is buying and building support in Washington, DC and that includes staffing up with former members of Congress. Put them on your payroll. You want to hire a chief of staff from a powerful senator or a committee member, get their chief of staff. Put them on your payroll as a lobbyist. This is what Washington does on a bipartisan basis. In fact, I think it’s the only point of true bipartisanship in DC is corporate influence over government.
MAX KEISER: Let me ask you this question. It seems to me as an observer that the cost of lobbying which is legalized corruption in America is pretty cheap. For 100,000 bucks you could get a law changed. That could result in a billion or two billion dollars to your bottom line. Should America at least have the decency of raising the cost of corruption?
TYSON SLOCUM: I think so. I think you’re absolutely right that it should cost a little more to buy off your local member of Congress or the President of the United States. I am actually shocked at how inexpensive it is for corporations to buy their way.
MAX KEISER: Now, some candidates of course are making this a focus. Elizabeth Warren has come out with excessive lobbying tax, over $500,000 you get taxed starting at 35%, goes up to 75% over five million. Would something like that work?
TYSON SLOCUM: I think so. Typically you want to tax ‘bads’. We did that with cigarettes, where you put in a punitive tax to reduce the consumption of that product. I think introducing a tax on ‘bads’ like lobbying might help to reduce the expenditure of lobbying. I think we need a lot more transparency. In 1995 it was the first time that Congress established basic reporting requirements, but they’re all still basically voluntary. One thing about the 1995 Lobbying Disclosure Act is that it doesn’t involve any penalties for non-compliance. There’s opportunity and almost incentive to fudge your numbers a little bit, and so I think if we’re going to tax lobbying, which I think is a great idea and I support that effort, I think we also need to have a lot more transparency and to have clear criminal penalties for filing false information on lobbying records.
STACY HERBERT: Going back to Obama and ‘hope and change,’ because it is my belief that his failure, it was Obama’s failure to deliver the hope and change that people did want. Then young people wanted Bernie Sanders, and partly because Hillary Clinton was the sort that gave speeches behind closed doors to Goldman Sachs for $500,000. They had an issue with bankers and the collapse. They did have an issue. They wanted universal health care. Again, Obama met with the health care lobbyists, the health insurance. Forget health care. Of course, we don’t have health care here. We have health insurance. A Princeton University study in 2014 found that the US essentially is an ‘oligarchy.’ The actual study found that economic elites and organized groups representing business interests have substantial independent impacts on US government policy. While average citizens and mass based interest groups have little or no independent impact. They found that even if the vast majority of the population, for example, wanted action against the banks, that whatever the elite wanted is what happened. Do you believe that this is because of Eric Holder, for example, under Obama went back to working for those banks essentially as their lawyer at a very high salary? Is it partly that revolving door or is it just because they identify as one of the elite, like the bankers? What do you find?
ELLEN BROWN: I think the bankers have persuaded them, and it’s actually true that the big Wall Street banks are global and you really can’t let them collapse. There was an effort under Obama to possibly nationalize those banks, and then the reason they didn’t do it was that the government would have to assume the liabilities of the banks, which were huge, you know if they’re a bankrupt bank like Citibank. They really didn’t need to assume those liabilities. What they could have done was move them onto the books of the Fed which is actually what they did do after they said they couldn’t do it. In other words, the Federal Reserve said, “We can’t bail you out.” And then the government, theTreasury stepped in with their $700 billion bailout. Then the Federal Reserve did bail them out, but in rather discreet ways that nobody really quite detected until …
STACY HERBERT: You’re right about that. Obama apparently did want to nationalize Citibank in particular. Tim Geithner was ordered to do that, and Tim Geithner, there’s a phrase for it, but he basically didn’t act on it. He waited and he didn’t, and Obama kind of forgot about it. Tim Geithner is the ‘drain the swamp.’ He is an unelected official. He’s appointed, so we have many unelected officials in the US government, as we’re finding under Trump, who can do all sorts of things and leak all sorts of things and alter foreign policy, domestic policy. What about that role?
TYSON SLOCUM: Absolutely. You’ve got a whole class of revolving door folks in high positions in government that have one foot in government and the other foot in well-compensated private sector. This is a huge recurring problem that we have. What’s really interesting though is the role of young people in calling all of this out. You talked about Occupy Wall Street. That was a youth-driven movement. You see all of these young people now active and mobilizing around climate change and other key issues. They see through a lot of this sort of corporatized political party nonsense. That’s why they gravitate towards a Bernie Sanders, with his rumpled hair. Because they understand authenticity. That’s something that the corporate types can’t buy, especially from the youth. I’m encouraged by, I’m seeing higher voter registration rates, higher voting turnout rates. I think the young people are going to help us get out of this mess.
ELLEN BROWN: In California, a bill was just signed by Governor Gavin Newsom, AB 857. It’s established a special charter for public banks. This was driven by young people, the Millennials, and they beat the Wall Street lobbyists. They did it just by the sheer force of numbers and mobilizing 10 cities up and down the coast. They had representatives from all across the state and just a huge push. One lobbyist would come out of the legislator’s office and 25 of these activists would pile in with no experience and no money. They had to feel their way as they went. Well, there were some seasoned volunteer activists with them who knew Sacramento, at least, knew the offices and stuff. Anyway, it was all just grassroots stuff. I think the legislators just saw there was so much support for this bill, and they knew, like you said, the Millennials are the next generation of voters, and they dare not say no to this very obvious something they really wanted.
STACY HERBERT: What do you think of Bernie Sander’s idea of never allowing any Congress or ex-staffer to ever lobby again?
ELLEN BROWN: Yeah. I think that’s a great idea. He would know more about it. Go ahead.
TYSON SLOCUM: Not necessarily, but absolutely. The problem plaguing DC is this corruptive revolving door, where former members of Congress they either lose their election or they retire. They get to immediately waltz into an unbelievably lucrative career of lobbying their former colleagues. That’s outrageous, and I think that is what permeates DC and causes a lot of the problems. I think a permanent ban on the ability of these former lawmakers and their top staff from serving as lobbyists is a great start.
MAX KEISER: All right. Well, we got to take a break. When we come back, much more talk on lobbyists and draining the swamp. 2020 Front Running. Stay there.
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MAX KEISER: Welcome back to Front Running 2020 with Max Keiser and Stacy Herbert. We’re talking about lobbyists and draining the swamp, Stacy.
STACY HERBERT: Well, we have established that basically you cannot drain the swamp, and you certainly cannot have hope and change without getting rid of this corporate money in the political system. Now we have a situation whereby since 2010 and Citizens United, this dwarves any of the $2.8 billion spent on lobbying. Do you have any idea about how much corporate money is poured into actual elections?
TYSON SLOCUM: We know that there is more money being given to these so-called dark money political action committees or PACs that are going to candidates and parties. That’s because there are still financial limits on the amount of money that a corporation or an individual can give to the Republican or Democratic party or to Trump or Obama. There are literally no limits on giving to these so-called dark PACs, which is why all of the corporate money is now being funneled through these vehicles.
TYSON SLOCUM: The Citizens United decision in 2010 was disastrous, because it established a new constitutional right for corporate political free speech that now makes it unconstitutional for Congress to regulate the corporate speech of an ExxonMobil or a Goldman Sachs. This has had massive problems for our democracy.
STACY HERBERT: It’s amazing, because individual citizens here in America are very restricted to how much they’re allowed to donate to their favorite candidate. On the other hand, you have these corporations which really highlights that Princeton study of they could give a billion if they want to these super PACs, and yet you’re restricted to a few measly little thousand dollar donations to your candidate. You can donate more to the party. What sort of influence do you think this has on an outcome in an election versus your $2,000, $3,000?
ELLEN BROWN: Well, obviously it’s the problem. The question is how do we get rid of it. It seems to me that we have to come up with another source of funding. The reason that politicians go for all this lobbying is they need that support for their campaigns. Then it seems to me the first thing we have to do is reeducate people about what money is and where it comes from, and the fact that banks actually create most of our money supply. I mean, of course, I’m coming from the public banking perspective. We need to turn the banks into a source of funding for us, for the people. We could do that. We could do quantitative easing for the people and get the money we need with that and bypass the big banks in fact.
MAX KEISER: On the subject of money and what is money, it seems like on the left there’s this idea, “Well, the money needs to be distributed better.” But they’re not really talking about what is money. There seems to be a need for that discussion. On this idea of Citizens United, to the point that it is a huge blow to our democracy in America, it seems to really emphasize the fact that the corporate agenda is to build and expand private property. The government’s agenda should be to build and expand the public property, the public domain. There should be free speech as a public domain issue. The public park’s a public domain issue. It’s a public versus private. By giving private corporations unfettered access in this way, you’re shrinking the public domain. Once it’s gone, you’ve killed your country effectively. The idea of the American dream, as it were, is effectively dead. Is this new generation really aware of that, that they’re on the verge now of losing it all?
TYSON SLOCUM: I think so. I think you absolutely hit the nail on the head, that the problem with Democrats has been that pretty much since the Clinton administration when he declared that the era of big government is over, Democrats have been unable to articulate what they’re for, for the most part. Republicans have been laser focused on their message, get rid of government, even if it comes to the detriment of some of their constituents in the heartland. You’re starting to see candidates like Bernie Sanders, like Elizabeth Warren that are out there reminding voters what positive roles for the public and positive roles for government can be. I do think that young people are aware. Young people are also very aware of what’s been going on in the tech space, much more so than people like me. Where they understand that we signed off rights, that they had access to all of these platforms but it has come at enormous cost. There’s almost a loss of innocence with young people, because the tech companies control so much of their lives and so much of their data.
MAX KEISER: There’s a term, the T&S agreement, the terms of service agreement that people just blindly sign off on when they download an app. It seems like there is a disconnect, that the original terms of service agreement is the US Constitution. These corporations violate it 24 hours a day.
TYSON SLOCUM: Yeah. Absolutely. I think young people are beginning to understand that the crux of the debate is corporate control versus public control. They understand that there are huge benefits associated with public control.
STACY HERBERT: The old Democratic party is led by the likes of Hillary Clinton, of Joe Biden, who we barely mention on this show because he doesn’t have any new ideas. He doesn’t speak to the young people. He doesn’t have much support from the young people. Bernie Sanders has been going around with AOC talking exactly like this. We need to get corporations out of politics, billionaires out of politics, but this is, regardless of the outcome of the Democratic nomination process or the 2020 election, this is the trend. This is what is going to happen.
STACY HERBERT: One idea, speaking to your idea of money and where money comes from, is Andrew Yang had a proposal for democracy dollars. Every citizen would be given $100 that they have to either use or lose. It would go into the voter’s pocket each year to contribute to campaigns and candidates that they would want to donate to. He reckons that this would outspend corporations eight to one. Do you think that could work, Tyson?
TYSON SLOCUM: I think it’s an admirable idea. I do think that corporations will just end up digging a little deeper and outspend this new public option. I’m glad that there are ideas on this issue. Because I think we need a lot of good ideas. I think at the end of the day we just have to turn the spigots off to the corporate financing of campaigns. I don’t know that adding in a new public financing option is going to be able to keep pace with what corporations are willing to spend.
STACY HERBERT: In terms of these democracy dollars, ELLEN BROWN, does that suit your need for money in terms of a quantitative easing for the voting population?
ELLEN BROWN: I don’t think Andrew Yang is actually talking about getting that money from the Federal Reserve but that’s what I think could be done and should be done. I think we could do a lot of things. The universal basic income, universal health care. We could do many things just by making a deal with the Fed ahead of time. Instead of having an independent Fed, we need to have a partnership between the Fed and the government like the Japanese do, where they make a deal.
ELLEN BROWN: We’re going to do this project, and you’re going to buy the bonds and hold them. Don’t sell them back into the market. Just keep rolling them over. In other words, free money, and then the question is how much free money can you do without hitting inflation.
MAX KEISER: Well, the amazing thing is that all money is debt. We’ve read Ellen’s books and we know this to be the case. In the lobbying game that’s based on who has the most money wins. They’re “who can borrow the most money wins.” If you’re borrowing cost is zero, or in the case of JP Morgan you’re being paid to borrow. Your cost of borrowing is negative. That interest rate fulcrum that is tied into money and the distribution of money and what money is, is skewed toward the corrupt. The more corrupt you are, the cheaper it is for you to borrow. Right?
TYSON SLOCUM: No. I agree.
MAX KEISER: That creates a feedback loop that supports corruption. It seems like one way to drain the swamp would be to raise the cost of corruption by raising interest rates. Would the left accept that as a policy? Would the Democrats accept that as a policy that the way to stop corruption is to raise the cost of corruption by raising rates?
TYSON SLOCUM: I think probably as part of broad base, comprehensive reforms, I think that that could be an element of it. I don’t think there’s going to be any one magic bullet solution to all of these problems of corporate influence over our democracy. I think we need to have a comprehensive approach to meet this challenge.
STACY HERBERT: Of course, many billionaires are stepping into the political arena, Trump being the first to spend all his own money and elect himself. Tom Steyer, a billionaire spending his own money on a campaign to get big money out of politics, which is pretty remarkable. Bloomberg, of course, has tens of billions of dollars. One of the most famous billionaire brothers, now just a brother, the Koch brothers, has spent $9 million in 2019 alone lobbying the government. The thing about them is this sort of notion of demoralization of the voters. Their whole message to the voter is that get rid of government, big government is bad, and yet they spend billions themselves lobbying government. What is this about?
TYSON SLOCUM: It’s about the fact that if you want to lower the cost of doing business by getting rid of regulations that might help communities but hurt your ability to maximize profit, it is in your financial self-interest to advocate for the removal of those public health or public safety protections. All of this is simply driven by these powerful interests pursuing their narrow self-interest. The problem is that the public interest groups, that where we are charged with trying to represent as many people as possible, we don’t have access to the resources. For an organization like mine at Public Citizen, we don’t take any corporate contributions, so that there’s never going to be an issue of undue influence over the policy issues that we’re engaged on. Limiting the ability of narrow special interests to affect broad policy issues is the cornerstone of where reforms have to be.
ELLEN BROWN: It seems to me the problem still is how do you do that. How do you change the rules when they’re in control of the rulemaking? I wonder about even raising interest rates or raising the cost of money for the banks. Look at what JP Morgan just did, where they said, “We can’t make any money banking anymore, so we’re going to take our money and buy our own stock back and prop up the price of it.” I mean there’s no regulation that says they have to make their excess reserves available for the other banks or for the retail market.
MAX KEISER: Right. Once again they’re buying back their own stock with borrowed money, that they borrow for 0% money. Again, it’s the cost of corruption is too low. Whether it’s buying a senator or borrowing to engage in fraud, it’s just the cost of corruption’s too low. Raise the cost of corruption in America to mitigate the risk of corruption in America. Don’t make it so darn cheap and easy. It shouldn’t be like McCorruption, it’s the most accessible, cheapest corruption of any country in the earth.
ELLEN BROWN: They could make-
STACY HERBERT: Exactly, and let’s bring that all back to the lobbyist, drain the swamp and our federal elections. Of course, it’s universally accepted that spending $100,000 on Facebook ads can warp the minds of the entire population and cause them to vote against she who deserved it. That’s $100,000 and yet tens of billions of dollars go into these super PACs. One and a half billion was raised by Hillary Clinton.
TYSON SLOCUM: Remember, it’s not just the political ads that are trying to influence your decision on a candidate. There’s also ads that are trying to shape your ideas about policy. There’s their advocacy to elect a certain party or a certain member of Congress or a president, but then there are all of these issue-based ads where corporations are trying to influence the way that people think about banking, about energy, about climate change. Those are just as damaging.
MAX KEISER: Well, that’s going to do it for Front Running 2020, about lobbyists and drain the swamp. Have your ideas about this been reshaped? Thanks to myself, Stacy Herbert, our guest. We’ll see you next time. Bye y’all.