Tuesday, June 2, 2015

Americans on How Political Campaigns Are Funded: A Black Hole in the Center of the Political System

Considering the widening cultural and political divides in American society that were on full display in Congress during the first half of the 2010s, uncovering a general will stretching across partisan lines as well as across a the continent and beyond would proffer a rare opportunity for significant legislative output. Furthermore, such a case would enable us to assess whether the elected representatives of the People were indeed representing, and, if so, whom. That is to say, the political distance between the People and their political class could be measured. I contend as respecting the stance of the People on money in politics and public governance, much unity and, unfortunately, much distance can be discerned, at least as of the end of May 2015 when a New York Times/CBS News telephone-poll was taken.

Evincing a unity striking not only in its singularity, but also given the partisanship on the topic then in the Congress, more than four in five Americans said that “money plays too great a role in political campaigns,” and two-thirds said “that the wealthy have more of a chance to influence the elections process than other Americans.”[1] By a significant margin, Americans said “they reject the argument . . . that political money is a form of speech protected by the First Amendment.” That even self-identified Republicans were evenly split suggests that The New York Times does not overstep in generalizing to characterize Americans, rather than the poor or Democrats, for instance, as rejecting the money-as-speech judicial doctrine. In fact, 75 percent of self-identified Republicans said they support more disclosure by outside groups, and Republicans were almost as likely as Democrats to favor further restrictions on campaign donations.

Nevertheless, Republican Congressional leaders had “blocked legislation” to require more disclosure by political nonprofit groups that were not required to reveal their respective donors. Furthermore, “some prominent Republicans” in Congress were calling “for legislation to eliminate existing caps on contributions.” As startling as the amount of daylight visible between the political class and the rank and file in the Republican Party itself is, the distance between the governed and their governors is even more grave, considering that the people doing the legislating happened to be elected.

A"Rockefeller Republican" turned populist? He stands alone in the rain outside the White House. (Getty Images)

It should come as no surprise, therefore, that The New York Times observes from the poll that “Americans appear to be as inured to the role of money in campaigns as they are disillusioned by it, expressing a deep cynicism about the willingness of elected officials to fight the system they inhabit or to change the rules they have already mastered.” A majority of Americans were pessimistic that campaign rules would be improved. The conflict of interest that Americans believed that their elected representatives were actively exploiting dovetails with the role of money in politics at the time because the representatives and their “paymasters” had written the rules! At the very least, both parties knew how to “work the rules” in their respective, and, mostly joint, interests.

In business theory, “agency costs” are incurred by someone (i.e., the principal) who has hired another person (i.e., the agent) to the extent that the latter does not do the will of the former. The principal not only loses out because the job isn’t getting done, but also must spend additional time and energy to get the agent to get the job assigned done. Perhaps the agent finishes the job, but skews it to be more in the agent’s own benefit. If the principal’s benefit is less as a result, this loss is also an agency cost. This theory can be applied to politics.

When a supermajority of an electorate want a law passed but those voters’ own elected representatives (i.e., agents) refuse, the principals incur agency costs. Moreover, when a People want one system of governance and the political class ensconced in another one—the current one in which that class benefits (and therefore has a conflict of interest in)—the People suffers agency costs. In terms of democratic theory, the governmental sovereignty is suspect rather than legitimate from the standpoint of popular sovereignty (i.e., the general will of the People as a people).

I contend that the political class’s continued exploitation of the conflict of interest is a significant factor in the distance that had widened between the governed and the elected governors. “Candidates for political office are not in it just to serve the people; they also want the prestige and the perks,” said one respondent in the poll. The New York Times reports that in follow-up interviews, respondents “described political leaders as a kind of class apart.” Mixing “public life and personal enrichment,” elected officials were in the habit of taking “frequent flights on the private planes of billionaires” and going on “junkets paid for by corporate lobbyists and foreign governments,” all while ostensibly doing the people’s business.

Moreover—and this is where it gets really important—some of those polled “expressed a profound alienation from their own government. They said they did not expect elected officials to listen to them. They described politics as a province of the wealthy.” Incredibly, “they said they sometimes did not feel informed enough to come to an opinion about the candidates.” In spite of “being inundated with political advertising,” they said they were repulsed by the billions of dollars” behind it. In short, a significant part at least of the electorate had tuned out, given up, and lost hope. It would appear that popular sovereignty can commit suicide, rather than continue to endure a sordid political class—humiliatingly the People’s agents—and the related self-aggrandizing deep pockets who shamelessly put their private interest above the public weal. Abstractly stated, popular sovereignty can simply choose to give up, rather than even recognize the bill that would be required to pay in order to take back the wayward governmental sovereignty. I suppose the latter can be like a black hole, sucking in power and money even as the universe itself becomes unhinged from its outer walls and begins to collapse into itself. So narrow-minded, so greedy with its ruddy, fat hands, can a black hole be that it consumes the very conditions of its existence.

Incremental change, or “reform,” is not the way to correct such a dysfunctional system as a political class at odds with its principals (as well as principles) in a democracy; the class’s paymasters would only subvert the “reforms” in all but name. The Dodd-Frank Financial Reform Act of 2010, for example, merely tweaked with the problem of systemic risk by raising reserve requirements on the largest banks; the proposal to break up the five largest banks predictably got nowhere. The People were led to believe that holding more in reserves would make a difference in an inter-bank credit freeze an amid short-selling. Meanwhile, Wall Street would continue to fund the Congressional re-election campaigns of the law’s “writers” and supporters.

The superiority of the popular sovereign (i.e., the People) over the entrenched governmental sovereign (i.e., the political class) is evinced in the poll in that 39% said fundamental changes are needed in the way political campaigns are funded in the United States, and a whopping 46% said the system should be completely rebuilt. That, my friends, is an astonishing find in American politics. Almost half of the popular sovereign believed that the way its agents are selected had to be completely rebuilt. Beyond mere statute, such a “big picture” standpoint is constitutional in nature. Unfortunately, the political class would almost inevitably have its say, even a veto, on any proposed constitutional amendments—even any in which elected officials have a conflict of interest. The wish to completely rebuild the way campaigns for elected office are run may be like hoping that a universe take back its power from the black hole at ground zero already dominating even space and time.

[1] Nicholas Confessore and Megan Thee-Brenan, “Poll Shows Americans Favor Overhaul of Campaign Financing,” The New York Times, June 2, 2015. All of the quotes in this essay are from this source.