Wednesday, October 26, 2011

Getting money out of politics

A friend posted a Facebook link this morning to a group called Get Money Out, which wants to, quite simply, get all private money out of political campaigns. Now, I would normally quickly dismiss such a group, but this seems like a good opportunity to discuss campaign finance reform and some of the arguments used in its favor.

Campaign finance reform strikes me as a solution in constant search for a problem. It's actually quite hard to identify specific and egregious incidents of bribery that would have been prevented by removing private funding from campaigns. Yes, there are occasional abuses -- Rod Blagojevich selling an Illinois senate seat, Tom DeLay shaking down lobbying firms in exchange for access, Duke Cunningham offering contracts to a military contractor in exchange for a yacht -- but these are exceedingly rare and, more importantly, the abusers were caught and convicted under existing laws. But these are not the problems reformers tend to highlight. Rather, they voice a more general concern that everything "bad" in American politics stems from the private financing of campaigns. Note the opening statement on Get Money Out's website:
Bailouts. War. Unemployment. Our government is bought, and we’re angry.
The insinuation is that if our campaigns were publicly financed, there'd have been no bailouts or war, and that unemployment would be lower. This is pretty ridiculous on its face (who exactly is lobbying for high unemployment, and who in Congress or the White House is keeping unemployment high to satisfy donors?), and one could easily point to countries with publicly-financed campaigns that have nonetheless found themselves with persistent high unemployment and prolonged wars in recent years. Nonetheless, the reformers persist in their quest.

One might ask, what's the harm? That is, maybe driving private money out of elections wouldn't exactly create Heaven on Earth, but maybe it would make politics a bit cleaner and make our officeholders more representative of our needs. Why not try it?

I'm actually working on a book on this very topic right now, but here's the quick answer: campaign finance reform, to a very large extent, simply hasn't worked. That is, every time a government tries to enact a specific contribution or spending limit to reduce the amount of money in elections (FECA, BCRA, you name it), innovative donors and candidates figure out ways around it. You want to give more than the limit to a group of candidates? Fine, just donate to a 527 or some sort of independent expenditure committee that can spend unlimited amounts on behalf of a candidate. Colorado's Four Millionaires showed how this can be done. This is part of the reason that, despite decades of campaign finance reform, the amount spent in campaigns continues to rise, much faster than inflation.

What's more, all this regulation has a price. If you want to know who contributed to the campaign of a president or a senator or a state legislator, it's not as easy to figure it out as it used to be. All these webs of committees that have cropped up to get around campaign finance limits end up obscuring the path of the money. Some of the money comes from individual donors, who can be identified in FEC records, but lots of it comes from groups who only have minimal disclosure requirements, and the donors to those groups may be other groups of people bundled together. Who's backing a candidate? It's almost impossible to tell nowadays.

The end result is that these reforms designed to reduce the role of money in campaigns not only don't end up reducing the role of money in campaigns, but they actually reduce accountability and transparency.

Update: I had missed Matt Yglesias' take on this same topic last month (h/t Andrew Long). He notes that banning all contributions to campaigns tends to make it difficult for anyone to run for office, and wonders just what problem this solves. He also cites Dylan Rattigan's specific proposed constitutional amendment:
No person, corporation or business entity of any type, domestic or foreign, shall be allowed to contribute money, directly or indirectly, to any candidate for Federal office or to contribute money on behalf of or opposed to any type of campaign for Federal office [emphasis added].
Beyond the problems noted above, it seems odd to write a rule into the U.S. Constitution proscribing behavior by people who are not Americans. I'd think it would make somewhat more sense if the candidate, rather than the prospective donor, were the subject of the rule.


Kevin said...

Seth, you write "Campaign finance reform strikes me as a solution in constant search for a problem", but I think this conflates two elements of CFR. One element -- which you focus on here -- is the limitation of donations to candidate campaigns and parties. The second is transparency requirements, which FECA and BCRA both enhanced. Since you conclude by lamenting the loss of transparency as a result of shifting donor strategies in response to donation limitations, you clearly value transparency. But is not an alternative approach to seek greater transparency in addition to whatever donation restrictions are put in place?

Greater transparency in donor records could be achieved by requiring disclosure of donations to 501(c)4s, quarterly (rather than biannual) disclosure of donations to PACs, donations by people giving $200 or less, the birth date and home address of the donor's primary residence (not just any mailing address) of donors, just to name a few.

You're certainly right to note that the strategic response of donors has made donations less transparent, but a desire to strength disclosure laws seems still may be more preferable than returning to a campaign-finance free-for-all.

GeraldY said...

It seems like you are shooting fish in the barrel with your opening few paragraphs. I would guess that "Get Money Out" talks about the war, bailouts, and unemployment because so many of the policies in which money does influence politics fly under the public radar. Using these examples are a substitute for stories that would require detailed explanations that cannot be easily summarized. What they are talking about is probably shorthand for "business power." And business power has been shown by Quinn and Shapiro to correlate with PAC contributions.

Yesterday, I happened to read a story by Matt Taibbi in Rolling Stone about Rick Perry's Texas. At least in Taibbi's telling, there were numerous cases in which money did seem to make a significant (and problematic) difference.

Seth Masket said...

Kevin, you make good points about transparency. I was mainly critiquing contribution and expenditure ceilings, which I think is really where the thrust of reform has been in the last few decades. It seems to me that when people argue that there's too much money in elections or that money corrupts elected officials, they're advocating contribution and spending limits, not disclosure requirements.

metrichead said...

Umm, I've been lobbying Congress to keep unemployment high for years. You have to admit, I'm pretty good at what I do.

But, this topic kind of spills over to your book that I see is for sale on the right side of the page. I am going to purchase it.

And then I will find someone to teach me how to read.

Will there be pictures? I love pictures! And bunnies, too!

andrew long said...

OK, here's a couple things to read.

Yglesias recently wondered the same thing, in a post titled,

What Problem Is ‘Getting Money Out Of Politics’ Supposed To Solve?

He shared your skepticism about the issue in general, and Ratigan's proposed constitutional amendment in particular.

Here's my response to his post, which I'm glad I found because I was trying to recreate it from memory to post here:

"I think the corollary here is that all Federal elections will be publicly financed by the Federal government. That's a huge mountain to climb, but it could be done. Yes, money, and its incentives, would still suffuse what we now think of as politics--the think tanks, media conglomerates, lobbying concerns, etc.--but it would be removed from the halls of government. That in itself could have a profound effect on political participation and go a ways towards renewing faith in both parties. On the practical side, it would give congress members some breathing room to NOT be beholden to special interests, and to NOT have to fundraise every frickin weekend. Lobbyists and experts wouldn't dry up and go away; many of them would also thrive in the newfound freedom. The political divisions, boys club rules, and general assholery would still exist, but with a bright and dedicated staff, you'd be able to tell some of them to fuck off, and do more of the work yourselves (in all your new free time), or discover some independent experts who have until now avoided DC for all the right reasons. You might even see many more of those bright and dedicated Ivy kids coming to apply at your office first, rather than heading straight to Wall St. Well, we can dream."

Then Yglesias read and reviewed Lessig's new book, Republic, Lost: How Money Corrupts Congress–and a Plan to Stop It, and found that he was significantly swayed by Lessig's arguments, if not his solutions.

"Lessig takes on the model of lobbying as "legislative subsidy" developed by political scientist Richard Hall and economist Alan Deardorff as an alternative to the naive lobbying-as-bribe model. Legislators come to Washington passionate about several issues. Quickly, though, they come to depend on the economy of influence for help in advancing an agenda. They need the policy expertise, connections, public-relations machine, and all the rest that lobbyists can offer. Since this legislative subsidy is not uniformly available, the people's representatives find themselves devoting more of their time to those aspects of their agenda that moneyed interests also support. No one is bribed, but the political process is corrupted.
At the same time, Lessig argues, fund-raising is not only a way of obtaining campaign cash but a method for members of Congress to live beyond their means. Congressional political action committees engage in massive spending on dinners, parties, retreats at fancy resorts, and other fundraising events with donors. These events enable members to treat themselves to vacations and high-priced meals they couldn't otherwise afford. Abjuring the money hustle would, in practice, entail a psychologically difficult decline in the average member's standard of living in a way that would lead him to shy away from challenging his donors' interests even if the direct electoral stakes were small."

I'm eager to hear your take on Lessig's ideas.

reflectionephemeral said...

"Campaign finance reform strikes me as a solution in constant search for a problem. It's actually quite hard to identify specific and egregious incidents of bribery"

Well, yes, but we do see that Congress is highly alert to the concerns of the top decile, and more or less indifferent to what everyone else thinks. (I'm thinking of Martin Gilens's work).

To me, the question is, do we fund our campaigns differently in the US than they do in other wealthy democracies? Does that appear to affect social mobility and stratification? 'Cause we're around the bottom of the OECD on those matters. Could that be due in part to our tolerance of a systemic bribery that's far worse, in its pervasiveness & effects, than anything Duke Cunningham did?

David M. Shor said...

I think this misses the key issue, which is that there are certain issues where political elites routinely disregard public opinion because they're forced to chase median fundraisers instead of median voters.

The textbook example of this is probably raising income taxes on rich people: Hilariously popular, even among Republicans. But generally opposed by everyone but fringe players.

There are other issues in that vein: trade barriers, immigration restriction, abortion restrictions, anti-bank populism, and campaign finance reform.

I don't support most of those things. But they're extremely popular, and they generally don't even get proposed because it pisses off the donor base in both parties.

Seth Masket said...

David, you're certainly right that there are many issues where elected officials ignore public opinion, but it's far from obvious that campaign finance is the reason for this. Bartels provides some interesting examples in his book Unequal Democracy. The public, for example, has long supported ending the estate tax (something that would obviously help the wealthy), but Democratic officeholders have nonetheless sought to protect it, despite what their wealthy benefactors may want. The public has also opposed the EITC, but leaders in both parties continue to support it, regardless of what wealthy funders think.

My understanding, meanwhile, is that the death penalty is favored in Great Britain by roughly the same margin as it is among Americans. Nonetheless, British officeholders continue to oppose it. They're ignoring public sentiment despite having public financing of campaigns.

Josh R. said...

a.) "The insinuation is that if our campaigns were publicly financed, there'd have been no bailouts or war, and that unemployment would be lower. This is pretty ridiculous on its face (who exactly is lobbying for high unemployment, and who in Congress or the White House is keeping unemployment high to satisfy donors?), "

Is it lobbying for high unemployment or lobbying for policies that either: (1) prioritize other ends, such as deficit reduction, above unemployment or (2) focus on policies that are in the interests of those donating the money, which these donators think effective, but fail to be effective in practice (but, even still, continue to be pursued due to these same donations)? In other words, I think the argument above is a bit of a strawman.

2.) The focus of this post is mostly on direct influence; person A gives money to legislator B, leading to act C which would not have happened otherwise (bribery being a case where B would prefer an alternative, agenda setting being a case where the status quo would be preferred, I suppose). However, isn't the real worry that the method for financing elections in this country is a selection mechanism that has increasingly led to a politics dominated by actual welathy people (e.g. by elected officials who are themselves millionaires)? In other words, the transfer of money is not necessarily the issue because the politicians are already captured. [This doesn't obviate fears that transfers dont' influence politics, of course.]

The alternative argument would be that a restriction on private financing and a boost in public financing would lower entry costs for aspiring politicians, thereby leading to a more representative body of legislators.

David M. Shor said...


Sure. There are lots of squishy cosmopolitan issues where the elites are never going to see eye to eye with the masses.

But it's really hard to look at the negotiations behind say, Dodd-Frank, and not think that financial contributions were a big factor.

In the UK, anti-finance sentiment is about as high as it is here, but their conservative-led government has cracked down on the finance sector much harder than ours have. I suspect that campaign contributions are a big factor.

Then you have stuff like high income taxes on rich people. That's really popular stuff! Other country's seem to pull it off. Admittedly, these countries are much more liberal than we are. But unlike say, the death penalty, higher income taxes for rich people have high support among cosmopolitans and very large proportions of the public. I suspect money has something to do with it.

Keith said...

Nelson Polsby always argued that money was a great equalizer in politics. Take money out of the equation, and what are you left with to allocate access? Prior friendships? Business associations? Country club memberships? These kinds of resources are not nearly as equally distributed across groups as money.