The Futility of Campaign Finance Reform

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In 1867, the first Federal campaign finance legislation prohibited Federal officers from requesting contributions from Navy Yard workers. Since then, Congress has enacted a whole series of measures to control how and how much money can be contributed and spent on a political campaign. It’s all been focused on the noble cause of taking the money out of politics.

All those efforts have all failed.

Here’s quick view of essentially how it’s all played out. We’ve got The Reformers on one side, and the The Hero/Villains on the other. (Heros funnel wads of cash to the “good” candidates. Villains funnel cash to the “bad/crazy” candidates.)

The Reformers:  “Let’s limit the amount of money an individual can contribute to a candidate. That’ll take the money out of politics.”

The Hero/Villains:  “Fine, we’ll form PACs to accept contributions from those same individuals and the PACs can give the cash to the candidate.”

The Reformers:  “Let’s limit the amount of money a PAC can contribute to a candidate. That’ll take the money out of politics.”

The Hero/Villains:  “Fine, we’ll give the money to the candidate’s political party and let the party give the money to the candidate.”

The Reformers:  “Let’s limit the amount of money a PAC can contribute to a political party. That’ll take the money out of politics.”

The Hero/Villains:  “Fine, we’ll ask the candidates what they would spend the money on, and then we’ll spend it on their behalf.”

The Reformers:  “Ummmmm…

The Hero/Villains:  “Hey, let’s also form Super PACs. That will give us yet another way to get around the contribution limitations imposed on the PACs.”

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The Reformers:  “Let’s make it illegal for Super PACs to contribute to or coordinate directly with parties or candidates. That’ll take the money out of politics.”

The Hero/Villains:  “Fine, we’ll publish editorials saying what we want. The candidates will publish editorials saying what they want. We’ll read each others editorials to make sure we’re shoveling money into the right places for the right things.”

The Reformers:  “Let’s limit how much individuals, corporations, unions, etc.  can contribute to Super PACs. That’ll take the money out of politics.”

The U.S Court of Appeals:  “No. The free speech provisions of the First Amendment don’t allow you to do that.”

The Hero/Villains:  “Yay!”

The Reformers:  “Ummmmm…”

So should we just give up on Campaign Finance Reform?

In a word, yes. The incentives for the Hero/Villains are so, so powerful that they’ll figure out a way to get around whatever money-controlling scheme the the Reformers can come up with.

So are we screwed? Is there really no way to control how individuals, corporations, unions, PACs, Super PACs and other organizations spend their money to influence elections?

There really IS no way to control how individuals, corporations, unions, PACs, Super PACs  and other organizations spend their money to influence elections. We are, however, most definitely NOT screwed. We’ve just need to frame the issue differently.

We need to frame it in terms of the incentives involved. Ooooops… Did I just suggest we should reduce the incentives for contributing to a political campaign? Sorry, I misspoke. We should reduce the incentive. Not incentives with an “s” at the end. Incentive. We only need to worry about one incentive.

OK, let’s get into that incentive… Ever sit on your deck at night and watch the insects swarm around a floodlight? That little bit of light attracts one hell of a lot of insects. Well… Think about the 4 Trillion Watt “light bulb” in Washington, DC. How many insects does that attract?  

OK now… I trust that it’s is obvious I’m using a metaphor here:

  • The giant light bulb represents the federal budget.
  • The insects represent special interests in the form of lobbyists, rich folks, giant corporations and all the other wonderful people and organizations attracted to big piles of money.

I trust that several other things are obvious:

  • That I’m rounding down for simplicity’s sake. The 2017 federal budget exceeds $4 Trillion.
  • That the federal budget has run at about 20% of GDP for the last 30 years.
  • That money and power are two sides of the same coin.
  • That money attracts attention.
  • That lots of money attracts lots of attention.
  • That shiploads of money attracts shiploads of attention.  (…sometimes I confuse the letter “p” with the letter “t.”)

So just for fun, let’s assume that a 1 watt light bulb will attract 10 bugs. That means a 4 trillion watt bulb will attract 40 trillion bugs. YIKES!!!

What if?

What if our 50 state governors got together and decided to help Washington DC with its bug problem. (Technically, it would only take 34 of them to get the constitutional convention process started.) What if they agreed to divvy up just 1 trillion of the 4 trillion watts among all the states based on some logical process. That would mean the states would relieve Washington, DC of the burden of dealing with 10 trillion insects.  

Albany, Annapolis, Atlanta, Augusta, Austin, Baton Rouge, Bismarck, Boise, Boston, Carson City, Charleston, Cheyenne, Columbia, Columbus, Concord, Denver, Des Moines, Dover, Frankfort, Harrisburg, Hartford, Helena, Honolulu, Indianapolis, Jackson, Jefferson City, Juneau, Lansing, Lincoln, Little Rock, Madison, Montgomery, Montpelier, Nashville, Oklahoma City, Olympia, Phoenix, Pierre, Providence, Raleigh, Richmond, Sacramento, Salem, Salt Lake City, Santa Fe, Springfield, St. Paul, Tallahassee, Topeka and Trenton would collectively relieve 25% of Washington, DC’s bug issue.

Sounds like a nice thing to do doesn’t it? In fact the right thing to do!

Let’s consider the notion of “relieving” Washington, DC of the burden of spending $1 Trillion in yet another way. Let’s assume I’m a lobbyist. Let’s further assume I’m one of the “bad” lobbyists. That is, one who works for a cause with which you disagree. (Just for the record, those who do agree with the cause would consider me to be one of the “good” lobbyists.)

One of the “bad” members of Congress – one you don’t like – has introduced a bill that will advance my cause. Half of Congress is dead set against me and against the bill. I must convince one of them to change his or her mind. I also need to make sure that none of the others who are currently with me change their minds.

So here’s my plan… I’m going to move to Washington, DC because that’s where Congress is. I will spend all day every day meeting with members of Congress and their staffs. Pretty darn convenient. Literally everyone I need to see is right there within walking distance. Most of them are actually in the same building!

Now let’s change the scenario. It’s now the 50 states who collectively control the money that will be used to implement my bill and who therefore will be voting either yea or nay. Well now… I guess moving to Washington, DC doesn’t really make sense any more. I need to be in Albany, Annapolis, Atlanta, Augusta, Austin, Baton Rouge, Bismarck, Boise, Boston, Carson City, Charleston, Cheyenne, Columbia, Columbus, Concord, Denver, Des Moines, Dover, Frankfort, Harrisburg, Hartford, Helena, Honolulu, Indianapolis, Jackson, Jefferson City, Juneau, Lansing, Lincoln, Little Rock, Madison, Montgomery, Montpelier, Nashville, Oklahoma City, Olympia, Phoenix, Pierre, Providence, Raleigh, Richmond, Sacramento, Salem, Salt Lake City, Santa Fe, Springfield, St. Paul, Tallahassee, Topeka and Trenton.

Lobbying to get this bill passed is going to be way, way, WAY more difficult. It’s going to be way, way, WAY more expensive. The odds of me – the “bad” lobbyist – getting this “bad” bill passed have just plummeted.

Will this process also make it way, way, WAY more difficult for the “good” lobbyists to get the “good” bills passed? Yep.

Hmmmm…. But a more difficult, rigorous process to analyze anything consistently produces better, more robust results. So more political decision-making at the state vs. the federal level means that bad proposed legislation is more likely to get killed; and that good proposed legislation will be even better because of the more rigorous approval process.

So let’s review what would happen if 25% of the federal budget got spread around the 50 states, and we kept the total to the 20% or so of GDP it’s been for the last 30 years?

  1. The impact of lobbyists would plummet because their job would be much more difficult and expensive
  2. More bad proposed legislation would get killed sooner
  3. The proposed legislation that is truly good will still get passed, and it will be even better legislation

Oh wait! The whole point of this tirade was campaign finance reform wasn’t it? I need to ask another question. What would happen to campaign contributions if spending money that is now controlled in just 1 city was spread out over 50 cities? Hmmmm… The campaign contributions would also get spread out across those 50 cities. The incentive to shovel money into that single giant bucket in Washington, DC would now be dramatically reduced. The money shovelling would now be spread out across 50 smaller buckets spread out all across the country.

Whether it’s bugs attracted to a light or money attracted to a political issue, it’s the same. It’s all about the incentive. Decrease the concentration of the light and decrease the concentration of the bugs. Decrease the concentration of political power and decrease the concentration of money to perpetrate political shenanigans. Change the core incentive that drives political contributions and dramtically change both the nature and the amount of those political contributions.

I’m your Intentionally Vicarious host, Todd Youngblood – still very wary of increasing the centralization of political power because of the horrors historically produced by extremely centralized governments… and still focused on having more fun than anyone else I know

 

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