No Discount On Democracy

With shopping on so many minds this past holiday weekend, I ran a Google search for the phrases “democracy for sale” and “Citizens United,” and got 222,000 hits.

Most of the top items were dire warnings, almost all from the political left, that the Supreme Court’s dismantling of restrictions on corporate and union funding of political advertising was going to bury the will of the people beneath a mountain of special-interest cash. “Democracy for sale” was the headline that the Boston Globe placed on an opinion piece by former congressman Jim Leach, now the chairman of the National Endowment for the Humanities, a few weeks before the election. “Citizens United: Democracy for Sale” also was the headline for a column on Politico.com by Tom Perriello, a former congressman who now heads the Center for American Progress Action Fund, and Amy Rosenbaum, a former aide to House Democratic Leader Nancy Pelosi who now works at Perriello’s organization.

If the Supreme Court’s decision in Citizens United v. Federal Election Commission really did put democracy up for sale, then the parties who bought it probably don’t have to wait until after Christmas to return it and ask for a refund. The recent election results don’t show that they got very much for their money.

As I have observed several times, most recently following President Obama’s negative comments a few months ago, Citizens United simply acknowledged that the Constitution protects speech – all speech. The protection does not apply only to speech issued by “people.” The right of free speech includes the right to hear speech, as well as the right to issue it. But just because we hear speech, willingly or otherwise (as we ruefully reflect on the just-past avalanche of television ads and robotic phone calls, especially in swing states), does not mean we are obliged to take it to heart. We make up our own minds.

As Paul Sherman wrote in a recent opinion piece for USA Today, “[…] it seems the rumors of democracy’s death were greatly exaggerated.”

It was, inarguably, a record-breaking campaign where pure spending was concerned, and independent conservative groups certainly outspent their opponents. But this spending disparity did not show up in the results. President Obama was re-elected, and the political balances in the House and Senate moved only slightly, in both cases in favor of the Democrats, who generally loathe Citizens United.

What happened?

Some observers argue that labor unions exerted influence of their own, balancing the increased corporate spending. There is at least some truth to this. Citizens United gave unions the ability to reach out to any audience they could find, rather than only their own members, with union funds. As a result, union speech did increase in this election, especially in the form of door-to-door canvassing. Corporations still outspent unions by a considerable margin, however. There is no clear correlation between the two sides’ political spending and electoral outcome.

The larger lesson of the 2012 campaign is that money spent on political speech, either positive or negative, does not buy votes. It can influence those votes, but only to the degree that the message being conveyed has some intrinsic appeal to potential voters, and only as long as those voters actually vote. Yet voters can, and sometimes will, reject even a message that is well-produced and nearly ubiquitous. We live in a world pervaded by advertising of all sorts. Most of us have learned how to sift through expensive production values and evaluate the message beneath. A good advertising campaign can’t save a bad product.

Citizens United is about free speech and only about free speech. No matter how large a megaphone corporations or labor unions can afford, voters still have the final word. The decision’s critics won’t abandon their fight quickly, but this year’s election demonstrated that there is no reason to sacrifice our commitment to free expression of ideas just because the ideas are expressed by those who have financial clout. Their clout stops at the ballot box.

About Larry M. Elkin 553 Articles

Affiliation: Palisades Hudson Financial Group

Larry M. Elkin, CPA, CFP®, has provided personal financial and tax counseling to a sophisticated client base since 1986. After six years with Arthur Andersen, where he was a senior manager for personal financial planning and family wealth planning, he founded his own firm in Hastings on Hudson, New York in 1992. That firm grew steadily and became the Palisades Hudson organization, which moved to Scarsdale, New York in 2002. The firm expanded to Fort Lauderdale, Florida, in 2005, and to Atlanta, Georgia, in 2008.

Larry received his B.A. in journalism from the University of Montana in 1978, and his M.B.A. in accounting from New York University in 1986. Larry was a reporter and editor for The Associated Press from 1978 to 1986. He covered government, business and legal affairs for the wire service, with assignments in Helena, Montana; Albany, New York; Washington, D.C.; and New York City’s federal courts in Brooklyn and Manhattan.

Larry established the organization’s investment advisory business, which now manages more than $800 million, in 1997. As president of Palisades Hudson, Larry maintains individual professional relationships with many of the firm’s clients, who reside in more than 25 states from Maine to California as well as in several foreign countries. He is the author of Financial Self-Defense for Unmarried Couples (Currency Doubleday, 1995), which was the first comprehensive financial planning guide for unmarried couples. He also is the editor and publisher of Sentinel, a quarterly newsletter on personal financial planning.

Larry has written many Sentinel articles, including several that anticipated future events. In “The Economic Case Against Tobacco Stocks” (February 1995), he forecast that litigation losses would eventually undermine cigarette manufacturers’ financial position. He concluded in “Is This the Beginning Of The End?” (May 1998) that there was a better-than-even chance that estate taxes would be repealed by 2010, three years before Congress enacted legislation to repeal the tax in 2010. In “IRS Takes A Shot At Split-Dollar Life” (June 1996), Larry predicted that the IRS would be able to treat split dollar arrangements as below-market loans, which came to pass with new rules issued by the Service in 2001 and 2002.

More recently, Larry has addressed the causes and consequences of the “Panic of 2008″ in his Sentinel articles. In “Have We Learned Our Lending Lesson At Last” (October 2007) and “Mortgage Lending Lessons Remain Unlearned” (October 2008), Larry questioned whether or not America has learned any lessons from the savings and loan crisis of the 1980s. In addition, he offered some practical changes that should have been made to amend the situation. In “Take Advantage Of The Panic Of 2008” (January 2009), Larry offered ways to capitalize on the wealth of opportunity that the panic presented.

Larry served as president of the Estate Planning Council of New York City, Inc., in 2005-2006. In 2009 the Council presented Larry with its first-ever Lifetime Achievement Award, citing his service to the organization and “his tireless efforts in promoting our industry by word and by personal example as a consummate estate planning professional.” He is regularly interviewed by national and regional publications, and has made nearly 100 radio and television appearances.

Visit: Palisades Hudson

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