05/05/2011 08:31 am ET Updated Jul 05, 2011

Why Democrats Taking Secret Money Risk the High Cost of Copying Republicans

It is telling that perhaps the most strident critic of a decision last week by some top Democrats to amass secret donations is a campaign finance crusader who is now out of power. Former U.S. Senator Russ Feingold refused secret campaign cash from "non-profit" outside groups this past fall. And last week, he told HuffPost that Democratic operatives who've now decided to follow the GOP's lead by forming their own independent fundraising groups were "playing with the devil."

Feingold's outrage sounds like a shout from a bygone age. As Janine explores in Shadow Elite, the new era is all about adapting, line-blurring, reinventing, branding and rebranding, pushing the limits of acceptability, and quickly assimilating your opponent's tactics. Democrats for years have been trying to do just that - co-opting certain Republican ideas and strategies. Many passionate liberals insist that, after last year's Citizens United Supreme Court decision opened the door to unlimited, undisclosed corporate contributions, and the GOP barrelled right through, it's high-time for Democrats to charge ahead themselves with groups (modelled after Karl Rove's Crossroads.) But Feingold is right to warn about the consequences of mirroring your opponent, not just for Democrats but for democracy itself. Other instances of Democratic co-opting have led to disastrous results.

It goes back to the Clinton administration and its New Democrat embrace of certain aspects of the Reagan revolution, under the guise of "Reinventing Government". The Clinton White House sanctified the already entrenched practice of contracting out government services to limit the headcount of the federal workforce. This might have given the politically expedient appearance of austerity but not the reality. Contracting accelerated and assumed new incarnations during the Clinton years, and exploded during the Bush era. This has left us with a government in which some private companies are increasingly performing not just government work but inherently governmental functions, and oversight is severely lacking. Ironically, outsourcing often costs more, not less - hardly the "reinvention" and "efficiency" that voters were sold on. Meanwhile, taxpayers are only dimly aware that they are paying into a public system that is both bloated and sometimes dictated by private agendas. Behemoth companies are now thoroughly enmeshed with government, and their activities are often beyond the reach of accountability.

In this environment, regulators and their work have been devalued, and some regulatory agencies like, say, the Minerals Management Service, which oversaw offshore drilling, began looking more like a lobbying group for the very industry it was supposed to be policing. MMS and various other regulators were drained of their expertise by private businesses able to offer former regulators (or would-be regulators) far bigger salaries. BP, for instance, can plausibly argue that there are few people within the government who know enough about their business to effectively understand their operations.

Clinton-era Democrats also were eager to show voters that they would promote a strong economy as much as their Republican rivals. So they assimilated various pro-growth and pro-business policies, and the results of some of these policies, as anyone with a 401K knows, were dire. What was good for Wall Street was believed to be good for America. The goal for interest rates was to keep them as low as possible (too low, for too long, critics say.) The player with most control over rates was the Republican Federal Reserve chief Alan Greenspan, but Treasury Secretary Robert Rubin and his deputy Lawrence Summers, both Democrats, were solidly supportive. Rubin and Summers also pleased Wall Street interests by pushing to deregulate banks and by letting exotic financial derivatives grow unchecked.

This helped innoculate the Democratic leadership from charges of not being on the side of business, and yet the laissez-faire approach is largely to blame for letting banks engage in risky gambles on an epic scale. The commitment to "free market" principles also made Democrats wary of criticizing outsized pay practices on Wall Street and corporate America, though it was clear even then that some of these practices offered executives incentives to engage in dangerous behavior or to hide liabilities. All told, it is little surprise that many on Wall Street became generous donors to Democratic causes.

So now some Democrats are following the GOP's lead on secretive donations, abdicating the moral high ground after railing about the influence of stealth financing since the mid-term election rout last fall. The decision may well help the party win, but at what cost? We can imagine that this choice might further inflame the outlandish conspiracy theories that have dogged the Obama administration. If Democrats do prevail in 2012, policy decisions will surely be scrutinized by those (rightly) wondering if they can trace them back to some shadowy contributor. More fundamentally, the move further blurs the lines between the parties. To the operatives behind the decision who insist that accepting secret money doesn't compromise Democratic core values, we have some recommended reading right here in the comment section of the Huff Post. While many fiercely defended the move, saying, as one commenter did, that Democrats "can't bring a knife to a gun fight," others said, in effect, what's the difference between a Republican and Democrat again? Remind me.