Repaying the FavorOctober 24, 2010 - by Donny Shaw
The real problem with too-big-to-fail is that in a post-Citizens United world there is virtually no limit to the amount of money these enormous companies can spend on making sure their favorite lawmakers get elected. Too big to fail is primarily a political problem. It’s a self-perpetuating cycle whereby huge companies are allowed to grow indefinitely (i.e. not fail organically) because they have the financial muscle to buy-off the lawmakers in a position to protect them from regulation and bail them out when they get into trouble.
Not surprisingly, in this election cycle, companies that have taken money from the 2008 TARP bailout are focusing their political giving on candidates who support the bailout, oppose new financial regulations, and are most likely to be in positions of power in the next session of Congress. The Washington Post reports:
The two top recipients of money from companies receiving TARP funds are the top two House Republicans, Minority Leader John A. Boehner (Ohio) with $200,000 and Republican Whip Eric Cantor (Va.) with $187,000. They are followed by the ranking members of two key House committees, Spencer Bachus (Ala.) on Financial Services and Dave Camp (Mich.) on the tax-writing committee.
All four of these Republicans split from the majority of their party and voted in favor of the 2008 bailout. They also all voted against the financial reform bill that imposes new regulations on financial companies and attempts to prevent future bailouts. As far as the TARP recipients are concerned, these are their key allies for the next session — powerful Reps. who are most likely to lead their party against new regulations and in favor of more bailouts when the time comes.
Picture above is Minority Leader Rep. John Boehner [R, OH-8].