A study of CNBC's coverage of the crisis of money in politics ahead of its October 28 Republican presidential debate reveals that the network has rarely explored the implications of an out-of-control campaign financing system and its effect on the political process. Media Matters analyzed the financial news network's content beginning on March 23, when the first 2016 presidential candidate officially entered the race and found that it has failed to report on the expanding influence of wealthy individuals and corporations who donate to campaigns, or the impact of the Supreme Court's 2010 Citizens United decision, which began a rollback of campaign finance reform measures that is negatively impacting not just elections, but the economy as well.
CNBC's Republican Presidential Candidate Debate Will Focus On Economic Issues
CNBC Will Host October 28 GOP Debate Focused On The Economy. CNBC has announced that its upcoming Republican presidential debate will focus on “key issues that matter to all voters--job growth, taxes, technology, retirement and the health of our national economy.” [CNBC, 8/22/15]
Studies Have Documented The Negative Impact Of Unchecked Campaign Contributions On The Economy
CAP: Campaign Contributions Help Shape Negative Economic Policy Outcomes. According to a May 2014 issue brief by the Center for American Progress, campaign contributions and lobbying can significantly increase rent-seeking -- which “involves spending resources to influence a division of profits, instead of creating a good or service that other businesses or individuals are willing to pay an amount that exceeds the cost of producing said good or service” -- which economists agree “causes a net societal loss that harms the economy.” The brief concludes:
Sadly, the evidence suggests that there is significant rent-seeking in the U.S. economy. Not only are large sums of money spent on campaign contributions and lobbying, the research indicates that these efforts can and do shape policy outcomes. To be sure, not all effort to influence policy is clearly rent-seeking and harmful to the economy, but at least some of the policy changes brought about by money in politics have been wasteful, inefficient, or directly harmful. Additional research is needed to help clarify the scope of the harm that rent-seeking does to the U.S. economy. But as this brief's review of the literature suggests, the harm is likely quite significant.
Even worse, the economic costs of rent-seeking are likely to grow in the future. With the barriers that limit money in politics falling in the courts, it should be expected that even more money will be directed toward rent-seeking activities in the future. [Center for American Progress, 5/2/14]
PBS NewsHour: “The 'Economic Impact' Of Campaign Money” Has “Potentially Increased Inequality Of Both Wealth And Power.” According to Paul Solman of the PBS NewsHour, evidence shows that increased campaign spending has a potentially negative impact on the economy. Solman cites Princeton University political professor Martin Gilens, who has written that increased campaign spending “raises the disturbing prospect of a vicious cycle in which growing economic and political inequality are mutually reinforcing,” and then concludes:
If richer Americans tend to support economic policies that benefit them, and richer Americans spend far more on elections, and voters are influenced by advertising, then the “economic impact” of campaign money is not increased spending as a form of electioneering stimulus, but -- potentially -- increased inequality of both wealth and power. [PBS, PBS NewsHour, 7/19/12]
Slate: Corporate Donations “May Be A Net Minus For The Economy.” A November 1, 2010 article in Slate explained that corporate donations to political campaigns not only don't help stimulate the economy, they may actually have a negative economic impact because money used for political contributions isn't being used for direct investments:
Will all that spending help stimulate the economy?
Probably not. For spending to give the economy a boost, the money has to come from some less productive use. Buying a car, for example, is better for the economy than stashing your money in a vault. (Starting your own business might be better still.) When an individual gives cash to a political campaign for, say, an attack ad, those dollars end up going to a television station or production company. That business might in turn use the money to purchase a new set of video cameras, and the manufacturer of those cameras might invest in the design of its products. In theory, that cascade of activity should help the economy to grow. But most analysts say the gains would be illusory, since campaign donations are likely to reflect shifts in consumption habits and nothing more. Most political donors wouldn't otherwise be hoarding that capital. If they weren't supporting their favorite candidates, they'd be going out for fancy dinners or buying iPads. The effect on GDP would be the same.
What about corporations and unions? Corporate donations may be a net minus for the economy when they come at the expense of more direct business investment. Target, for example, could be less inclined to build a new store in Gary, Ind., after having spent $150,000 to support a candidate for Minnesota governor. Those kinds of moves are bad for the economy, because investment dollars are very good at generating economic activity. (Corporate donors may view their expenditures as investments in beneficial economic policies, but that kind of stimulus is far too speculative for economists to measure.) Unions, for their part, don't really make those sorts of investments. Their political donations function more like shifts in consumer spending.[Slate, 11/1/10]
But CNBC Rarely Discussed Issues Related To Money In Politics
CNBC Dedicated Only One Partial Segment To The Discussion Of Campaign Finance Reform. According to Media Matters' study, between March 23 and October 25, CNBC had only one segment that devoted substantial time to discussion of campaign finance reform. While 52 total segments discussed issues related to money in politics, most only made mention of campaign finance in terms of candidates' fundraising reports. While 29 segments made mentions of political donors or fundraising, 16 of the 52 segments mentioned political action committees (PACs) or super PACs. Only three segments mentioned Citizens United. (Click to enlarge)
CNBC Made No Mention Of The Impact More Money In Politics Has On The Economy At Large. Between March 23 and October 25, there were no mentions on CNBC of the impact campaign finance deregulation has had on the economy as a result of Citizens United.
CNBC Segment That Mentioned Reforming Campaign Finance Became A Discussion About “Radical Islam.” Just one CNBC segment between March 23 and October 25 discussed reforming campaign finance. On the August 13 episode of Squawk Box, host Andrew Ross Sorkin brought up campaign finance reform with Republican presidential nominee Sen. Lindsey Graham (R-SC), who admitted that “unlimited money from unknown donors is going to be a problem,” before turning the discussion to how to “keep ISIL from attacking our homeland.” [CNBC, 8/13/15]
Just Three Segments On CNBC Mentioned Money In Politics As A Problem. Three of the 52 segments mentioning issues related to money in politics discussed the campaign finance issues that have resulted from the 2010 Citizens United decision. Money in politics as a national problem was defined by discussions that pointed to or warned of negative consequences of post-Citizens United campaign finance practices.
Majority Of Americans Think Money Has Too Much Influence In Politics, Favor Campaign Finance Reform
New York Times: "More Than Four In Five Americans Say Money Plays Too Great A Role In Political Campaigns" According to a joint poll by The New York Times and CBS News, a large majority of Americans believe money plays too big of a role in politics:
The broader public appears to see things differently: More than four in five Americans say money plays too great a role in political campaigns, the poll found, while two-thirds say that the wealthy have more of a chance to influence the elections process than other Americans.
Those concerns -- and the divide between Washington elites and the rest of the country -- extend to Republicans.
Three-quarters of self-identified Republicans support requiring more disclosure by outside spending organizations, for example, but Republican leaders in Congress have blocked legislation to require more disclosure by political nonprofit groups, which do not reveal the names of their donors. [The New York Times, 6/2/15]
Bloomberg Poll: “78 Percent Of Those Responding Said The Citizens United Ruling Should Be Overturned.” According to a September 28 article by Bloomberg Politics, a new national poll found that “78 percent of those responding said the Citizens United ruling should be overturned.”
“Wow. Wow. I'm stunned,” said David Strauss, a constitutional law professor who teaches at the University of Chicago. “What it suggests is that Citizens United has become a symbol for what people perceive to be a much larger problem, which is the undue influence of wealth in politics.”
The 5-4 ruling said that corporations have a First Amendment right to spend unlimited sums in support of political causes. That decision, coupled with a lower court's rejection of a ceiling on contributions to political groups, opened the way for the super-PACs that are expected to pump hundreds of millions of dollars into the 2016 presidential race. [Bloomberg Politics, 9/28/15; Media Matters, 10/6/15]
This report used IQ Media to analyze coverage of money in politics on CNBC. Our analysis included any segment that mentioned the phrases “money in politics,” “campaign finance,” “PAC,” “citizen united,” “contribution,” “donor,” “fundraising,” or “political action committee” as well as variations of each word or phrase. Our analysis covered news reports from March 23, when the first candidate officially announced their candidacy, through October 25.