The United States of America has been a beacon for freedom since its founding. One of the main pillars that supports this ideology of freedom is the process of American democracy. To be able to elect any citizen you deem fit to run the country is a unique characteristic that a handful of countries use today. The main goal of voting to elect officials is to have someone in office that will represent a person’s interests and move to create policy that will be beneficial to the greater good of the country. However, while one may vote for a candidate that represents the voter interests, the candidates can also be funded by interest groups, or a group of people that work together that seek to influence public policy in their favor (American Politics 2018, 522). While interest groups are an important part of American politics, they can give rise to a slew of problems including the misrepresentation of the common man’s interests. I argue that interest groups are not beneficial to the common man, and that they only reflect the interests of those within the group, which are typically the upper-class of society. To support my argument, I hypothesize that interest groups had a key impact on Republican candidates capturing the senate majority in the 2014 election cycle, and that the financial sector interest groups spent more on the 2014 election cycle than any mid-term prior in attempt to stall and reverse financial service reforms after the 2008 financial crisis. Furthermore, my argument disagrees with Madison’s views on pluralism in support of interest groups and conforms with the ideas of interest group bias that Schattschneider proposes in The Scope and Bias of the Pressure System.
Interest groups are not a new concept in American Politics. James Madison argued heavily in favor for interest groups through the defense of pluralism. Madison argued that since “groups were free to organize and participate in an open political system, the political process balanced competing interests” (Logic of American Politics 2018, 530) However, as Schattshneider points out, the problem with the pluralist defense is that “the flaw in pluralist heaven is that the heavenly chorus sings with a strong upper-class accent”(Logic of American Politics 2018, 530). Interest groups do not wholly represent the interests of America, especially since most interest groups are comprised of upper-class citizens. Schattschneider states that “businessmen are four or five times as likely to write to their congressmen as manual laborers are”(Schattschneider 1975, 392). This further perpetuates the folly of interest groups as well as supporting the argument that interest groups misrepresent the interests of the common man since they are not composed of the common man.
Furthermore, while interest groups may play a significant yet negative factor in American politics, they are at their core, the same as political parties. John Aldrich argues that “parties are institutions designed to promote the achievement of collective choices”(Aldrich 1995, 367). This definition is almost identical to the interest group’s definition and both of the groups face the collective action problem. The difference between the groups is how they attain their goals. Political parties have direct influence over whether or not they achieve their political goals, but interest groups do not. Interest groups have the potential to achieve the group’s goal, but this all depends on whether or not the contributions that they make to a candidate actually influences the candidate.
The 2014 senate election was a huge gain for the Republican party. Republicans prevailed victorious by capturing the majority of the senate in this election, with a net gain of nine members, dethroning the Democratic party as the majority (Politico, 2014). This was a surprising victory for the Republican party due to Barack Obama, the Democratic presidential candidate still holding office. The data presented above supports my first hypothesis by confirming the amount of money given to Republican candidates by financial interest groups was significantly higher than Democratic candidates in subsequent years. I argue the strategy at play here was broad in the sense that financial interest groups did not seem to donate to republican candidates from a specific area or demographic. The apparent goal was to gain the senate majority for Republicans. The ultimate goal the financial groups were seeking through these contributions becomes more apparent in my second hypothesis.
The Great Recession that took place in the mid to late 2000’s was a detrimental blow to the American economy. Following this event, the Dodd-Frank Act was put into place. This act “created the Financial Stability Oversight Council (FSOC) to address persistent issues affecting the financial industry and prevent another recession” (Techtarget, 2017). In simpler terms, the act placed oversight of banking and other financial processes into the hands of the federal government in order to avoid another incident like the Great Recession. The Dodd-Frank act was not good news for the financial sector, because it’s very existence threatened the amount of profit that banks and other services could make. In my second hypothesis, I argue that the strategy the financial interest groups used when contributing to the Republican candidates was an attempt to influence senators to push for reforms to the policy set in place by the Dodd-Frank Act in order attain the groups interests that were jeopardized by the act. While the data supports most of this, the bills that were proposed following 2014 in relation to the Dodd-Frank Act must be analyzed to gain a clearer picture. One example of a bill proposed following the 2014 elections is “S.2102 – A bill to clarify the application of certain leverage and risk-based requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act” (Congress, 2014). The bill attempts to add a minimum requirement of risk for capital to be oversighted by the government. This bill was proposed by Maine Senator Susan Collins, a republican. In other words, the Bill attempts to create a set monetary value when dealing with financial institutions that allows the government to oversight the company. If the transaction is below this cutoff value, the company does not have to be oversighted by the government. This is basically a loophole around the Dodd-Frank Act, and allows companies work around being oversighted by the government. It should be noted that Senator Collins received donations from Insurance interest groups during the 2014 election, a group that the Dodd-Frank Act effects, and a group that would benefit from this Bill (OpenSecrets, 2014). This data supports my second hypothesis and the motivations behind the interest groups that gave donations to republican candidates.
Interest groups appear to hold significant power in American politics, but it is hard to determine what their contributions actually buy. It is clear in some cases, like this one, that interest groups can influence the push of certain policy that benefits their interests, but that method is not effective if the policy is not passed or is stalled. In Hall and Anderson’s article Issue Advertising and Legislative Advocacy in Health Politics, the duo discusses the effects of contributions made to political campaigns through advertisements. They state that “Some ads simply call attention to the larger policy problem, raising its salience in the minds of the voters”(Hall and Anderson 2010, 400). While this quote is aimed specifically towards health politics, it can be applied to other areas of legislation as well. I agree with Hall and Anderson to an extent. While some interest groups can call attention to their issue through advertising, the issue must be relevant to the people that view it. If applied to my example with the Dodd-Frank Act repeals, the problem would not pertain to the public, since the Act benefits the public and works against the interest of the financial groups. Richard A. Smith offers a counterargument to my second hypothesis by stating "that interest group contributions generally have little influence on most floor decisions in the House and Senate” (Smith 1995, 95). I agree with Smith’s argument, even though my data supports my hypothesis of influence over policy. It is difficult to determine the actual influence of donations by an interest group since no politician in their right mind would admit to being influenced by donations. So, I side with Hall and Anderson’s argument, since the data of group membership increase based on advertising their interests can be collected and quantified. Interest groups will be a part of the American political system for the foreseeable future, and the United States must begin to fully understand the extent of their influence on the government in order to keep interest groups from corrupting the true purpose of the American political system.