The Folly of Campaign Finance Reform, Part I

If you ever tried to read anything about campaign finance reform (CFR), you probably gave up because you couldn’t figure it out. If you ever tried to sit down and actually study the reasons behind campaign finance reform, you definitely gave up because you couldn’t figure it out. The vast majority of Americans are against CFR, although very, very few can cogently explain their position beyond the clichés “There’s too much money in politics!” and “Special interests decide elections!” arguments. But there is one thing everyone on both sides agree on – CFR laws are not working. The slew of CFR laws has not stemmed one dime from entering a candidate’s coffer.

Yours truly HAS actually spent long hours studying CFR, and part of my day job is working with my company’s Political Action Committee (PAC) that donates funds to some members of Congress. I have learned many things about CFR and can tell you the primary reason why CFR does not work is an error in the very idea of “taking the money out of politics.” What that noble fact overlooks is that we live in a capitalist society, and anyone who has tried to start a business or works at a nonprofit knows that fundraising is absolutely essential to survival. You cannot take the money out of politics the same way you cannot take the money, or the necessity of money, out of Wall Street, non-profits or any business from a small startup to a Fortune 100. And that is why CFR laws do not work and never will work.

But since many Americans have a negative view of Washington, dislike negative political ads and often hear about financial waste and excess in the government, the idea of campaign finance reform is a concept that elicits a positive reaction with people who only follow politics and elections casually. I believe that because CFR is constructed under an unrealistic notion that money will be mitigated from politics, it has led to a series of unintended consequences that have not only failed to stem the money tide, but also led to serious issues that lie at the heart of how politicians are elected and how they communicate with the public.

CFR is an emotional topic, and you hear groups like Common Cause, PIRGs and even some politicians say claims like “Elections are for sale” and “Big money in politics undermines the public interest!” Like many emotional claims, these are made without understanding the situation and I have never seen any of these backed up by hard proof, a single footnote or simple empirical evidence. In the postings to come, I will explain how all of these claims are untrue, and how the unintended consequences of CFR have actually helped millionaires, incumbents, and undermined the First Amendment.

Reading the Post-Election Tea Leaves

With the recent elections a week removed, I’ve read and heard Republicans saying their victories in New Jersey and Virginia mean the party is back in action. I’ve also read and heard Democrats saying their victory in upstate New York means their party is back in action and the conservative firebrands have been repudiated. None of it really means anything, because it’s the same thing I hear after every non-Presidential election. Here’s what it does mean:

With all due respect (and congratulations) to Chris Christie and Bob McDonnell, it would have been pretty difficult to lose to incumbent governors Jon Corzine and Tim Kaine. The Virginia election outcome was never in doubt, and the only strange thing about New Jersey was how close it was. But the outcomes had nothing to do with party, anti-GOP or anti-Obama mobilization. What did matter was (1) a reminder about what makes elections in America unique, (2) all politics remain local, and (3) anti-incumbency ruled the day; the party in charge was irrelevant.

The U.S. is unique among world democracies because it encourages voters to vote for the candidate instead of the party. There are partisans on both sides that will vote for any candidate that calls themselves a Democrat or Republican, but those are the minorities. Here you can vote for whomever you want, which accounts for the huge number of Americans that call themselves independents and usually end up deciding races. In Great Britain, India, Israel and most other democracies everyone belongs to a party and votes for the party they belong to (ballots in other countries sometimes do not have candidate names on them) and the head of that party becomes the man or woman in charge. But it’s different here. Voters can vote for their choice and cross party lines, and you can have candidates who are pro-life Democrats or pro-government health care Republicans.

Second, Tip O’Neill remains correct – all politics is local. I’ve continually ranted about how social conservatives are driving the pro-business and social libertarians out of the Republican Party, especially in the Northeast. So look again at Chris Christie and Bob McDonnell – not only did they not run on the socially conservative dogma espoused by the national GOP, but they rejected offers from the Sarah Palins, Glen Becks and Rush Limbaughs of the world to help. They ran respectful campaigns and focused on local issues like property taxes in New Jersey and unemployment in Virginia. There was none of the ridiculous tea parties or equating Obama to Hitler rhetoric we’ve seen elsewhere, because they knew that would have the wrong effect in their states. In contrast, the effect of ignoring local politics in New York’s 23rd district has been well-documented and when a social conservative bumped the correct candidate off the ticket, the GOP lost a seat that had been Republican since 1852. That’s what happens when you ignore the local angle, and think voters place the party in higher esteem than the candidate.

Finally if you look at all three races it was the incumbent who lost (you could view the 23rd seat as a Republican incumbent) and Mayor Bloomberg of NYC barely squeaked by in what was supposed to be a cakewalk. In case you missed it, voters are pretty mad across the country and when unemployment is high, personal finance accounts are low and the economy is in a general rut incumbents have their work cut out for them. It’s not an anti-GOP or anti-Obama fervor hitting the voters, it’s an anti-political system, vote-the-bums-out policy that is targeting everyone in office. This is the anger fueling the votes, and politicians of every stripe and ideology ignore it at their peril.