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Stuart Whatley

Stuart Whatley


This Side of Democracy

Posted: 08/27/10 07:08 PM ET

Ignorance and poverty, and the lack of material means generally, prevent people from exercising their rights and from taking advantage of [opportunities]. But rather than counting these and similar obstacles as restricting a person's liberty, we count them as affecting the worth of liberty, that is, the usefulness to persons of their liberties. ~ John Rawls

As it is an election year amidst the Great Recession, talk of the American plutocracy is very much in vogue. But to label the situation as unique belies centuries of history. A politico-economic class structure has long been an operative distorting force in American government; and long has the value of civic expression and democratic agency for the many been seen as dwarfed by the clout and privilege of a wealthy few.

Every American has the right to speak out, to express views, and to serve as an advocate for all manner of issues and prospective leaders. But having rights doesn't necessarily mean they're valuable, or even useful at all. At times, many ordinary Americans feel as though they're just shooting blanks -- electorally speaking of course -- and with each new doubter in the process a vicious cycle ensues; the discouraged classes grow more cynical and abandon the civic process altogether, while select special interests exploit and occupy the space left behind. Campaign finance can be dry stuff, but it is ignored at one's peril, as it is the current election funding regime -- and the perverse incentives it fosters -- that undergirds much of the integrity of our entire political structure and the policies it propounds.

American democracy is in an era defined by political and economic strife, where the calls for reform are desperate and often shrill. This is of little surprise. The flaws in the system are obvious when one looks to the lukewarm reforms over the past year in health care and financial regulation, and the altogether abandoned cap and trade effort -- all of which began with lofty promises, but ultimately pleased few when codified. It is a heady experience to think what would have come to pass had reforms already been in place two years ago to dilute the codependency between lawmakers and their benefactors. Millions of individual small donors helped usher Barack Obama into the White House. What if the same could be said for the 535 esteemed members of the United States Congress?

Of course, when the many are drowned out by a plutocratic few, the answer has always been to simply pile on more regulations, only to watch the courts inexorably shoot each down. Opponents of big government stand the line against opponents of big business, with each side exchanging the same stalemated arguments of corruption in government on the one hand and free speech on the other.

The 2008 Obama campaign made unprecedented gains in activating small donor participation through new media techniques that circumvented traditional barriers. But Organizing for America remains an exception, rather than the rule. While a full third of Obama's general election contributions came from donors who gave $200 or less, for John McCain and Hillary Clinton it was but a fifth. And in 2004, for George W. Bush and John Kerry, it was only a fourth and a fifth, respectively. In the meantime, 2009 saw over 13,000 registered lobbyists swarming the nation's Capitol with a record overall expenditure of $3.5 billion.

That same rate is on track to be repeated this year, with overall lobbying expenditures as of July 26 totaling $1.78 billion. In particular, lobbying expenditures by the health and financial industries have skyrocketed. Their tactics are well known. The IMF's Marcos Chamon and Stockholm University's Ethan Kaplan describe in their "Iceberg Theory of Campaign Contributions" how the bulk of special interest influence comes from undisclosed threats (made far more credible by the Citizens United ruling), rather than disclosed largess. We'll give a thousand bucks to your reelection campaign, but if we're not pleased with your vote, we'll give your challenger ten times that when reelection time rolls around.

Elections are expensive, and they aren't getting any cheaper. The average cost of winning a U.S. House seat tripled between 1986 and 2008, from $359,577 to $1,362,239, respectively. And in the Senate it jumped almost 50 percent between 1986 and 2006, from $6,025,962 to $9,435,839, respectively (with a slight dip back down in 2008 to $7,500,052). At the time of this writing, the total cost of the 2010 campaign season is already placed at just under $3 billion. In 2008, which included a historic presidential campaign, it capped out around $5.28 billion total.

But more important than the sheer numbers -- which are unprecedented in scale in American history -- is from whence the money hails. For all House candidates between 2007 and 2008, political action committees (PACs) and the wealthiest individual donors contributed, on average, about 70 percent of each campaign's total intake. And for all Congressional candidates between 2003 and 2006, individual small donors giving $200 or less amounted to an average of only 13 percent.

With such little monetary input from average lower- and middle-class Americans, it is little wonder that Congress consistently passes such ham-handed regulations and munificent subsidies for special interest industries. Harvard University's Lawrence Lessig has cataloged clear-cut examples in issue areas ranging from intellectual property law to nutrition to climate change where extant public policy runs counter to both scientific consensus and public opinion alike. There are laws and standards on the books that literally just do not make sense without a butcher's thumb on the scale. Consider a classic case: the American sugar industry. According to Chamon and Kaplan, "the [U.S.] sugar program led to a net gain of over one billion dollars to the sugar industry in 1998. However, the sugar industry's total campaign contributions in that election cycle were a mere $2.8 million, less than 0.3% of that net gain." The actual benefit of the subsidizing the largest American sugar producers remains unknown, but all those small farmers who have been effectively crowded out of the market presumably have a long list of grievances.

For many campaign finance reform activists, the prime (but so far unattainable) solution is to do away with electoral fundraising altogether, through a fully public funding regime at the federal level. With the burden of fund-raising gone, incumbents -- whose salary taxpayers pay anyway -- could spend their time actually governing and legislating for their constituents, rather than hosting $1,000 luncheons and groveling at the feet of the most pecunious lobbyist bundlers and donors. Campaigns would focus on actually speaking with voters about pertinent issues, rather than striking backroom deals.

Of course, this solution is easier said than done. Other than for the presidency, fully publicly funded elections have never enjoyed even remotely enough political support on the federal level. What incumbent senator or congressman would willingly break those lucrative ties he or she has forged over the years? Most measures that seek to control the flow of money into politics and elections are restrictive, and can easily be used to paint a politician as an enemy of business or free expression, rather than a battler of corruption. And why spoil that cushy job on Wall Street or K Street waiting for you after you leave public office?

Moreover, campaign finance regulations are not cut-and-dry protective measures that always benefit the little guy, such as consumer protection rules or FDA standards. They can often work against those they are meant to serve. The greater the complexity in campaign finance statutes, the harder it is for Average Joe to navigate the system. The unintended consequence is empowerment of the moneyed few that can still afford the overpriced beltway pettifogger who knows the ropes.


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