I’ve always been taught that if you want to understand the truth about an issue the first thing you should do is follow the money. Some might say this is cynical, even counter-sociological, and I would not suggest that a sociologist should follow the money and stay there. It is, however, a very telling enterprise.
Currently, companies like AIG are being criticised for their lousy investments, but this isn’t entirely fair. If you follow the money you will find that, in fact, many of the banks being bailed out have made at least one exquisite investment that has paid huge dividends.
When corporations invest in politicians the returns are just enormous. Let’s take AIG as an example because they are under such intense scrutiny lately. Their business practices have resulted in a global economic collapse. One would think that their investors are incompetent noobs. But they are not. Look at how they’ve invested in politicians.
In the 2008 campaign cycle AIG invested a mere $854,905 in campaign contributions according to opensecrets.org. Sixty-nine percent of these investments were made in Democratic candidates, but the remaining 31% was no small sum to the Republicans. Even more telling regarding AIG’s political investment is their twenty year trend. This reveals an even split between Democrats and Republicans. AIG wasn’t making these contributions because they were fans of the a particular politician over another. No. They were hedging their bets. When the political tides shifted, so did their contributions. in 2000, for instance, AIG invested over $2 million on politicians, 60% of whom were Republicans.
This year, despite the relatively small sum, they spread influence around smartly. Their top four recipients were Barack Obama ($104,000), Chris Dodd (imagine that at $103,000), John McCain (wait, didn’t you support his opponent? $59,000) and Hillary Clinton ($38,000). That’s one president, two influential senators and a Secretary of State in your pocket–a veritable political Swiss Army Knife of influence. Some other presidential candidates stuffed in part by AIG are Mitt Romney, John Edwards and Rudy Giuliani.
And what a pay off. For a small investment of less than a million dollars this year, and less than ten million dollars over the last twenty years what did AIG receive in return? Not one, but two financial bailouts totalling $70 billion! (propublica.org)
So why do we think AIG has the audacity to pay out bonuses using taxpayer money, or to sue the government, who now owns 80% of the company, for the return of $300 million that they unsuccessfully hid away in offshore accounts. Could it be that they know that they’ve bought a chunk of the United States Government, so they are more or less immune to silly stuff like the law or civic responsibility.
Of course, AIG isn’t the only company that so wisely invested in political capital. Below is a chart of seven recipients of taxpayer bailout money. These seven were chosen because they were among the top ten recipients of TARP funds and are members of opensecrets.org’s list of Heavy Hitters (members of the top 100 campaign contributors). The chart includes their ranking among TARP recipients, the amount of cash they received from TARP, next to the amount of investment they put into the 2008 campaign and how that money was split between Democrats and Republicans.
I’ve always said I think we have the best government that money can buy. This proves it. Understand, that I’ve used the word investment intentionally. These corporate heads see campaign contributions not as speech, as presented in court so slimily, but as investments in the future.Could it be that such investment, and the understanding of its inferred influence, could have been the reason for making such risky and immoral decisions over the last twenty years?
The Mad Sociologist Blog 