campaign contributions, campaign finance, CItizens United, FECA, Hillary Clinton, regulatory regimes
A few days ago, a friend of mine said she wanted to contribute time to campaign finance reform. My initial response was, “I have strong feelings about that!” That reply doesn’t contain much substance, by any measure. So I figured I would write down some thoughts behind those strong feelings.
The first effort to regulate campaign finance via legislation dates to 1867. The modern era of regulation began in 1971, with the Federal Election Campaign Act (FECA). You can find a summary of these regulatory efforts in Wikipedia:
1971 was forty-five years ago. That was pre-internet, and for historical context, the year after Kent State. We want to give ourselves confidence that people who lend financial support to political campaigns are not able to buy influence prospectively. We don’t want don’t want any elected politician to be in someone else’s pocket.
Obviously, these efforts have not worked. If they had, we would not be talking about campaign finance reform in 2016. Advocates might say, “Everything was okay until Citizens United. We have to deal with the issue again because the Supreme Court overturned all of our previously successful efforts.” That, however, is not the case at all. PACs and super PACs may have grown up to circumvent regulatory efforts. Reform advocates may have wondered whether they could ever regulate money not contributed directly to a campaign or to a political party, but no one among the advocates would say, pre-Citizens United, “We’re okay here. We’ve solved the campaign finance problem.”
The fact is, you cannot solve the campaign finance problem so long as government has favors to give. However you regulate political contributions, a perception of favor trading will exist while favors exist. If you want to eliminate favor trading from all public activities, you have to eliminate favors.
Of course, you can’t eliminate government expenditures entirely, and some will regard the letting of contracts as a favor of sorts. That’s why procedures for bidding on contracts are so rigorous. So let’s focus on regulation. Here’s the place where business firms and other entities seek favorable treatment. Regulation is a lot less regulated than contract oversight, which is to say that regulators and regulated can get cozy a lot faster than others who are supposed to keep a polite distance among themselves.
We can see these tensions locally in the areas of food and transportation. Existing restaurants want to use regulations to limit or eliminate competition from food carts. Taxi services want to limit or eliminate competition from ride sharing outfits like Uber. Regulations are the tool, but the goal is not customer safety. The goal is to secure your own place in heavens, and raise barriers to entry for new stars.
The financial stakes are big in national politics. The worst thicket of relentlessly opaque rules and relationships exists in the health care sector. Advocates for the Affordable Care Act vehemently attacked Big [fill in the blank]: Big Pharma, Big Insurance, Big Provider Networks who might have it in their power to increase or limit access to health care, as well as influence its cost. These were the enemies. The job of government regulation would be to maximize access, and limit costs.
The bigger the stakes, the more suspicious we are about the nature of political contributions. What do the contributors expect in return? What return do they actually realize? Does the return they realize result from contributions they have made? On the other side, what motivates the people who write regulations? Do they regulate with an eye on the balance in their campaign committee’s checking account? How much do relationships among business interests and political leaders turn on financial transactions?
Advocates for campaign finance reform have a new rallying point now: reverse Citizens United. Keep corporate contributions out of political campaigns. Corporate contributions are suspect in a way that individual contributions are not. If we cannot eliminate contributions from this source, we have politicians up for sale, where business interests purchase their votes. The foundational reasoning of campaign finance reform emphasizes the balanced push and pull of regulatory favors in return for monetary support.
No progressive advocate, however, would acknowledge reversal of Citizens United as sufficient to solve this problem. Their goal for a long time has been to institute public campaign finance: every candidate has the same budget, funded from the treasury. ‘Every candidate’ for many elections means two candidates, just as we have two candidates in the presidential debates. Under public campaign finance, you will never see a third-party candidate, polling five percent, qualify for the same level of support as a major-party candidate polling fifty-five percent. The third-party candidate will qualify for zero, and the major party candidate will qualify for half. Over the long term, the major parties favor any scheme of campaign finance that secures their place in the political heavens.
All of these arguments imply that to clean up campaign finance, you have to clean up regulatory regimes. To clean up regulatory regimes, you have to eliminate the ability of business interests to interfere with regulatory processes for their own benefit. Food carts and ride sharing services need the same opportunities as their competitors, whatever Hillary Clinton might say disapprovingly about the ‘gig economy’. A lot of forward looking people like the gig economy. A lot of entrepreneurs wish government regulators would get out of the way, to let the gig economy flourish.
I picked transportation and food services as prominent examples, but examples of regulatory failure, together with suspicion of favoritism based on financial contributions, run through the entire economy. When government is too powerful, fear and resentment of corporations powerful enough to influence government begins to take hold. To rid ourselves of these fears and resentment, along with suspicions that feed them, make government less powerful. Eliminate its ability to grant favors via special treatment. These days we say, “Stop crony capitalism.” That won’t happen fast, but it can happen if we have a clear vision of where we want to go.