The Limits of Campaign Finance Reform

            I’ve been reading an interesting law review article by Jill E. Fisch entitled “How Do Corporations Play Politics?: The FedEx Story.”  The article, though a little old and missing some new developments, discusses the manners in which a corporation can influence politics and how a lot of the methods do not involve just spending money.  In addition, Fisch makes the argument that contributing money, spending money on PACs, and things of that nature don’t have the huge kind of impact on political outcomes that many people associate with spending large sums of money.  Before I get into what I took away from this article, if you have access to JSTOR or EBSCOHost, and you have the time and desire to read a really long law review article, I’d suggest this one.

            What I took away from this article is that simply tweaking campaign finance rules to put limits on the amount of money that a corporation can spend, is insufficient to address the influence that corporations can have on politics. Fisch uses FedEx as an example of the variety of different things that a corporation can do outside of simply spending money on PACs and campaign contributions. FedEx bought the naming rights for Redskins stadium, allows for Congressman to use their planes for quicker travel, uses the planes for humanitarian work, and other activities to raise their political profile.  In addition to all of that, the president of FedEx regularly appeared before Congress to testify about various issues as well as hire lobbyists and experts to do the same.  A lot of activity that influences policy outcomes doesn’t appear to have anything to do with spending large amounts of money on elections or advertising.  The ability for corporations, both for profit and non-profit, to gather experts, produce policy papers, testify before Congress and other such activities play a large role in policy outcomes, but wouldn’t be affected by campaign finance reform.  Fisch has an example of FedEx campaigning for deregulation of air freight in the 70’s, but only spending around $8500, a sum that I could put together if I really wanted to wipe out my savings.  They got what they wanted anyways, demonstrating that money isn’t necessarily the most important factor. 

            I do want to make something clear, having vast sums of money helps with performing the actions mentioned above.  Having money allows for you to hire lobbyists, experts, and raise your political profile enough to influence politics, but none of these activities would be impacted by campaign finance reform.  Not all of these activities are bad exactly.  I like the idea of the Sierra Club or the ACLU having the funds on hand to hire experts or lobbyists to influence politics.  I’m not sure that I even have an issue with FedEx testifying before Congress with regards to deregulation.  Businesses do have political interests and they should have the ability to act on those interests.  Campaign finance reform could limit contributions to candidates and could limit the amount of money that could be spent on ad campaigns, but probably could not limit the amount of money that is spent on lobbying, or limit the money spent on raising one’s political profile, or limit the access to power that comes from holding vast sums of money.

            Unless we as a society decide that corporations, including organizations like the NAACP or the UMWA, are not persons and do not have any liberty rights, they are always going to play a huge role in politics.  A role that may diminish the impact that regular citizens have on politics.  Even if we were to simply ban money being spent by business on politics, there is nothing stopping them from forming advocacy groups that would allowed to spend money on their behalf.  I write this out of a sense of depression because I do think that money in politics is an issue, but I just don’t see any viable solutions to fix this issue. 

Farm Subsidies

     With all of the talk about deficit reduction, trimming Federal spending, and the evils of socialism one would think that agricultural subsidies would be in the cross-hairs of Republicans and Democrats alike.  Economists are generally opposed to the practice because it distorts markets, inflates the price of land, overwhelmingly go towards agribusiness, and only goes towards certain crops like corn.  (I especially hate subsidies to corn because not only does it receive subsidies to grow; but there are also subsidies for ethanol AND the US government created an automatic market for ethanol by the passing of laws that mandated it's use in Federal vehicles.  All in all, very much an excellent example of a command economy.)
    As a quick aside, if you ever want to find out if someone is libertarian, talk about guns and farm subsidies, if they like the former and hate the latter they are libertarians.  100% accurate.
    Matt Yglesias has a post about Senator Roy Blunt supporting  agricultural subsidies but not food aid to the poor.  Pretty heartless right?  He's in favor of giving government money to businesses but not poor people?  I'm sure he, and any other supporter of the process, will argue that these are really just small time farmers, and the subsidies are necessary to make sure that we have food whenever we might need it.  The problem with this argument is that it's not what farm subsidies do.  Farm subsidies actually aid bigger businesses than they do smaller ones because of the increase in land prices.  There is something to be said about the history of food production and how it would go through a boom and bust cycle in the past, the solution to this is not to simply give out yearly subsidies.  It would be far better to have emergency funds on hand to purchase food on the international market than to simply give farmers money to grow a ton of crops regardless of whether or not the market is there to pay for all of them.  In addition, it makes more sense to subsidize the purchase of food rather than the production because that way people will always be able to buy said food, meaning there will always be a market for what the farmers produce. 
    Farm subsidies are one of those government programs that by and large is unpopular, but due to the nature of Congress we get stuck with them.  Congress is structured in such a way so that it tends to favor rural states more than urban ones.  In addition, Democrats and Republicans from these rural states are both largely in favor of agricultural subsidies because their constituents are.  It's a regional policy more than an ideological one.  What really bothers me about this whole affair is that we're likely to see large reductions in funding to a variety of government services that benefit the poor, the middle class, and urban populations; while seeing gratuitous amounts of money still being paid to unnecessary programs in the Department of Defense and to agribusiness.

Egypt. (Or Why I Would Punch Anderson Cooper in the Head Too.)

    I am sure that all of you out there on the internet are aware of what is going on in Egypt.  A couple of other bloggers have written pieces on this subject that I felt did a good job of explaining many of the issues and a particular point made by Jonathon Bernstein over at "A Plain Blog About Politics" made a good deal of sense over how the media chooses to portray the US's role in this issue.  He states:

American press and political reaction to things like this invariably overstate the American role in whatever is going on. The US of course does have a lot to do with Egypt, and it may or may not be true that American policy can influence events there, but US coverage in these situations almost always overestimates that potential influence. That's even more true about statements, as opposed to actions, by US government officials.

    The rest of his post is really good and I do suggest reading it but one thing I want to make a further point on is how we have treated Obama's handling of this situation.  This is one of those situations where being brutally honest on the matter would be disastrous, even though I think it's probably the best way of handling the situation.  The brutally honest answer is that Obama and his State Department probably think democracy is good and would genuinely like it if people everywhere were free to determine their governments but also have to be sang froid about the situation in that they want someone in power who will most likely aid their foreign goals. 

    Could a democratic Egypt achieve both of those things?  Yes, it could and I think everyone, no matter their political stripes would prefer a free and democratic Egypt that supported our political goals (or any nation for that matter) than a dictatorial Egypt that supported our political goals.  The problem is, there's no guarantee that if Egypt becomes a democracy it will support our foreign policy goals.  Obama and his team have to basically keep their options open and be ready to handle whatever comes out of this, and until something comes out of this, they should keep their cards close to the chest.  Ideally, while Robert Gibbs comes out and hews, hems, and haws; Hillary Clinton and the rest of the State Department are secretly working behind the scenes making connections with all potential winners of this power struggle in Egypt whether it's Mubarak, ElBaradei, the Muslim Brotherhood, or some sort of coalition.  In the meantime I think Obama should come out and say the same things he's been saying, all people yearn to be free and deserve to have their voices heard, violence should not be used, etc. etc.  Publicly announcing a cut in aid that goes to the Egyptian military might be a good symbolic gesture that I have not heard.  Some of these actions appear to already be happening as the Washington Post has reported that there is a shift in US government attitudes towards the Muslim Brotherhood. 

    The main thing I have been noticing with all the reporting I have read on the Egypt situation is the degree to which Republicans are going bat shit insane over this issue.  Whether for or against, and most of it is against the demonstrations.  There is constant comparison to the Iranian Uprising, that the Muslim Brotherhood is a terrorist organization that is the equivalent of Al-Qaeda, that people over there need a "firmer" hand.  One would think that they would be crowing with delight, constantly touting the correctness of the Bush Doctrine in that since Iraq has become a democracy, it's blooming everywhere in the Arab world.  Wasn't that the point?

Military Spending

    *I had written this for an internship and I just thought it was pretty solid so I thought I'd share it. I would include a link but you have to be a subscriber to The New Republic to read it all.  Though if you have access to it I'd suggest reading it.

            Gregg Easterbrook’s article within the November 10^th issue of The New Republic, “Waste Land,” is quite timely considering the current atmosphere of professed austerity.  With the coming plans from Republicans, Democrats, and various commissions detailing how best to tackle the gap between spending and revenues, it is useful that such an article detailing the exorbitant amount of money that goes into defense programs of questionable use was published.  Though it is the case that exorbitant spending on the military diverts funding that could go towards other programs, as well as diverts a great deal of taxpayer money towards programs of suspect merit, it raises an interesting question about cutting government programs during an economic downturn.

            When discussing where to cut back on government largesse, the programs that have received the most attention for curtailing seem to be social programs that are intended to help middle and lower class individuals.  Programs like unemployment insurance, libraries, spending on education, health, and other areas have been targeted for cuts.  Many have argued that cuts in these programs would actually worsen the economic situation without substantially helping the deficit.  Bearing that in mind, why not look to a bloated defense budget that has nine carrier strike forces where the rest of the world has none, where jets meant to fight Soviet fighters are still being developed?  A question that arises while reading this article is what kind of impact defense cuts might have on the economy.  Think about it for a moment: many of these programs are constructed and designed throughout the United States employing various workers from highly skilled engineers to less skilled laborers.  While it may be the case that an aeronautical engineer could get a comparable job in the private sector, it would likely be harder for the assembly line worker making an M1 tank to get a job making cars given the current economic situation.  Is that not the same argument that has been made with regards to other government employees in different fields?  Is military spending, in fact, the last refuge of Keynesian economics, though hardly called such by those who support it?

            Admittedly, Easterbrook does not discuss how such massive spending could be an example of Keynesian economic policy, in part because he himself may be opposed to such policies.  Easterbrook is largely against the wasting of tax-payer money and likely considers the notion that wasteful military spending may have a beneficial economic impact highly dubious.  Many of these programs make no military sense and the largest economic benefit is likely to be felt by the handful of companies, the contractors hired, and top military brass who go on to work for the latter two beneficiaries.  However, there are still people lower on the totem pole who do benefit from these programs.  These are the individual workers on an assembly line, construction workers building the various headquarters for the expanding national security bureaucracy, the staff that will be required to take care of these new facilities, and so on and so forth.  These people will, in turn, be paying for groceries, their rent, and nights out with their families and friends, all of which is supposed to increase demand and improve the economy, whether it is a janitor for a school or a janitor for a Northrop-Grumman plant.  The same argument used to support New Deal style work programs could be employed to defend this military spending, to an extent. 

A final critique of this article is the lack of blame to be cast at the feet of constituents.  Easterbrook doles out much of the blame to military brass, to the companies themselves, and to Congressmen who are always looking for a photo-op next to an F-35.  It is fair to say that a lion’s share of the blame should be shouldered by these groups, but constituents have a role to play in this problem as well.  An area in which this military money is spent has a vested interest in keeping the money coming as it directly benefits them.  Just as towns where bases are located heavily resist the removal of that base, so too will towns where new nuclear powered carriers are being built resist any threat to their funding being cut off.  Though many will decry the deficit and the bloated budget, they will not be as much in favor of it when their own economic well-being is at stake.  These individuals have a large interest in massive military spending alongside those who Easterbrook mentions.