The stunning defeat of the House majority leader Eric Cantor on June 10 has shaken the landscape of American politics. Never before had an incumbent House majority leader lost an election during the primary. Cantor’s defeat worried the Republican leadership in the House, with the rising of the Tea Party’s vowing to fight against Wall Street bankers, big businesses and crony capitalism.
Business leaders around the country are more anxious with this political earthquake than those politicians in Washington. According to The New York Times, the share prices of many big companies, such as Boeing, have lost most of the gains cumulated in the past year. Analysts said that this can be attributed to the startle loss of Cantor.
Why did a House representative’s failure to get reelected shake the stock market in a magnitude no less than it did in politics? The answer is that Cantor is a powerful ally to many big businesses that rely on federal government for financial and regulatory support. But this is the crony capitalism that Cantor’s challenger David Brat and his Tea Party supporters rail against. In a recent speech at the Dominion Club, David Brat accused lawmakers in Washington of supporting corporate interests by giving them billions of dollars in tax credits instead of taking care of average Americans.
The financial industry is more generous and enthusiastic in pouring huge chunks of money toward Cantor’s campaign. As Jeremy Peters and Shaila Dewan of The New York Times point out, Goldman Sachs, the Blackstone Group and Scoggin Capital Management were the three biggest contributors of Cantor’s campaign, donated $5.4 million in this election. But Cantor is one of the allies these businesses rely on. After his defeat, these corporations shifted resources quickly to U.S. senator Thad Cochran of Mississippi, ensuring that he will not meet the same fate as Cantor when facing competition from another populist.
The tie between lawmakers and corporate interests has been becoming stronger since the late 19th Century, getting far away from the republican framework that founders had intended. The founders intentionally let the representatives only have a term of two years to prevent lawmakers from becoming professional politicians, like Cantor, because the House is the chamber that is closest to the American people. But this structure only slows rather than stops corporations’ interests. Political candidates now spend more than 40 percent of their time connecting corporations and raising money, according to a documentary by PBS.
The trend today is that our senators and representatives represent funders more than the people. This trend is expected to accelerate in years to come after the Supreme Court ruled in favor of Citizen United, a 2010 case demanding corporations and other organizations should have no limit on spending money on political campaigns. Cantor’s defeat in fact gives hope to the people who still believe that they can correct the flaws of the system while sending a warning to those overconfident incumbents that they must not ignore their constituency’s requests.
Nevertheless, the fight against corporate interests never ends. Economics shows that the nature of an incumbent business is to seek regulatory protection from competition and discriminatory tax policy in favor of itself. When those newly elected representatives sit in the House for a long time, they might also bow their head to corporate interests. But one must have faith in our Constitution to replace any incumbents that lose connection to the people. This requires every citizen to act upon political obligation—participating in as many elections as possible.
