Campaign Finance -- Get to the Source

The recent Supreme Court McCutcheon ruling on how much an individual may contribute in total to political campaigns has already reignited the campaign finance issue. A lot of ink will be used discussing campaign finance, lobbying, and all the money in politics. We've heard suggestions about publicly financed elections and more transparency/limits on political contributions and lobbying. One problem with these proposals is that Congress will be passing the laws enacting such reforms. In the case of publicly-funded campaigns, Congress will set the rules as to how campaigns will be funded, what type of expenditures will be funded, and how much funding to provide. So the people already in power get to set the rules governing how money for elections will be spent. 

I’m sure that will work out well for the challengers.

Before looking at potential "solutions" to an uncertain “problem,” shouldn't we answer a more fundamental question: why are so many people, unions, and corporations willing to part with their time and money to lobby or support a candidate?

These groups donate time and money because they think they will benefit. Either the candidate supports certain policies that the donor wants or the donating group believes that they can get a "favor" from the candidate in return for the donation. In either case, there are potential spoils if your candidate gets elected. Since the federal government spends over $3.5 trillion every year, these spoils can be significant. In addition to the money up for grabs, there is also the regulatory and tax code aspect of government (for example, the feds are dictating what kind of light bulbs you can use).

The way our federal government currently works, an entity may find it easier to get a special favor from Washington through campaign contributions or lobbying expenditures than actually competing.  For corporations, this might be a special tax provision or a special regulation limiting competition.  For a union, this might be special provisions that require union labor (Davis-Bacon Act), minimum wage legislation that limits competition, or restrictions on right to work laws, to name a few.  Why compete if you can get friends in powerful places?

Campaign contributions and lobbying often produce benefits because there are concentrated interests (for example, the cane sugar industry) and dispersed costs (the American public).  It is in the interest of the sugar industry to donate and lobby to protect the import quotas and subsidies that are in place rather than compete on the world market. The American public pays substantially more for sugar than the rest of the free world (close to double the world open market price). It is not in any individual's interest to lobby over $5 or $10 of extra cost per year, but it certainly pays off for the cane sugar industry to have the subsidies and quotas.  How much would you be willing to “contribute” to get subsidies and protection via a quota system?

Congress passes these special favors without considering or completely ignoring the unintended consequences. Suppose you manufacture candy or soda. With the cane sugar policies in place, it might make sense for you to move your operations out of the country where you can purchase cane sugar for a substantially lower price. You can then import finished product into the U.S. without the tariffs or quotas. The sugar policy may save some jobs in the cane sugar industry, but how many jobs does it cost in other industries and how much is it costing the American public? 

There is one certain way to reduce the amount of money in politics - - shrink the size and scope of the federal government.  Possible reductions include the elimination of the departments of Education (they don’t educate anyone), Energy (they don’t produce any energy), Labor, Agriculture, and Health and Human Services. Shrink EPA to its core task. Eliminate the corporate income tax (corporations don't really pay income taxes, in the end, income taxes are either passed on to the consumer like any other cost of doing business or result in reduced return to investors). Shrinking the government takes away the spoils associated with backing a winning politician or lobbying a politician. These moves will quickly reduce the amount of money spent on lobbying efforts and political campaigns and make us freer as individuals.

The problem with shrinking the size and scope of government is that it takes power away from Washington and gives it back to the individual or the states where it belongs.  There are very few people who willingly give up power and control, so don't expect too many Congressmen to step up and devolve power back to the states or to individuals (not without a lot of pressure from constituents), but it is a sure way to reduce the amounts spent on campaigns or on lobbying efforts trying to get "special" legislation.

Thomas Nichta lives in San Antonio, Tx.

The recent Supreme Court McCutcheon ruling on how much an individual may contribute in total to political campaigns has already reignited the campaign finance issue. A lot of ink will be used discussing campaign finance, lobbying, and all the money in politics. We've heard suggestions about publicly financed elections and more transparency/limits on political contributions and lobbying. One problem with these proposals is that Congress will be passing the laws enacting such reforms. In the case of publicly-funded campaigns, Congress will set the rules as to how campaigns will be funded, what type of expenditures will be funded, and how much funding to provide. So the people already in power get to set the rules governing how money for elections will be spent. 

I’m sure that will work out well for the challengers.

Before looking at potential "solutions" to an uncertain “problem,” shouldn't we answer a more fundamental question: why are so many people, unions, and corporations willing to part with their time and money to lobby or support a candidate?

These groups donate time and money because they think they will benefit. Either the candidate supports certain policies that the donor wants or the donating group believes that they can get a "favor" from the candidate in return for the donation. In either case, there are potential spoils if your candidate gets elected. Since the federal government spends over $3.5 trillion every year, these spoils can be significant. In addition to the money up for grabs, there is also the regulatory and tax code aspect of government (for example, the feds are dictating what kind of light bulbs you can use).

The way our federal government currently works, an entity may find it easier to get a special favor from Washington through campaign contributions or lobbying expenditures than actually competing.  For corporations, this might be a special tax provision or a special regulation limiting competition.  For a union, this might be special provisions that require union labor (Davis-Bacon Act), minimum wage legislation that limits competition, or restrictions on right to work laws, to name a few.  Why compete if you can get friends in powerful places?

Campaign contributions and lobbying often produce benefits because there are concentrated interests (for example, the cane sugar industry) and dispersed costs (the American public).  It is in the interest of the sugar industry to donate and lobby to protect the import quotas and subsidies that are in place rather than compete on the world market. The American public pays substantially more for sugar than the rest of the free world (close to double the world open market price). It is not in any individual's interest to lobby over $5 or $10 of extra cost per year, but it certainly pays off for the cane sugar industry to have the subsidies and quotas.  How much would you be willing to “contribute” to get subsidies and protection via a quota system?

Congress passes these special favors without considering or completely ignoring the unintended consequences. Suppose you manufacture candy or soda. With the cane sugar policies in place, it might make sense for you to move your operations out of the country where you can purchase cane sugar for a substantially lower price. You can then import finished product into the U.S. without the tariffs or quotas. The sugar policy may save some jobs in the cane sugar industry, but how many jobs does it cost in other industries and how much is it costing the American public? 

There is one certain way to reduce the amount of money in politics - - shrink the size and scope of the federal government.  Possible reductions include the elimination of the departments of Education (they don’t educate anyone), Energy (they don’t produce any energy), Labor, Agriculture, and Health and Human Services. Shrink EPA to its core task. Eliminate the corporate income tax (corporations don't really pay income taxes, in the end, income taxes are either passed on to the consumer like any other cost of doing business or result in reduced return to investors). Shrinking the government takes away the spoils associated with backing a winning politician or lobbying a politician. These moves will quickly reduce the amount of money spent on lobbying efforts and political campaigns and make us freer as individuals.

The problem with shrinking the size and scope of government is that it takes power away from Washington and gives it back to the individual or the states where it belongs.  There are very few people who willingly give up power and control, so don't expect too many Congressmen to step up and devolve power back to the states or to individuals (not without a lot of pressure from constituents), but it is a sure way to reduce the amounts spent on campaigns or on lobbying efforts trying to get "special" legislation.

Thomas Nichta lives in San Antonio, Tx.

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