Purchasing Power: Money, Politics, and Inequality

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An unofficial report on the conference:

Opening remarks by The Honorable Chris Murphy, U.S. Senator from Connecticut

In his opening statements at the ISPS conference, titled Purchasing Power:  Money, Politics and Inequality, Senator Chris Murphy provided the insider view of what it takes to run for office these days—good telemarketing skills. “You need to spend four to five hours on the phone every day asking for money.” The Senator talked about how the constant pressure to raise money was not only all-consuming but is effecting candidate recruitment and reelection. He cited the number of high profile retirements lately due to the election process becoming more bruising from personal attacks and from “soul-crushing fund raising.” The constant pressure to raise funds changes the tenor of the debate, too, he noted. “Fear plays a part of why people give.”  He noted that when he sends out a message on how bad Republicans are, he raises three times more money than if he talks about what good he does in office. In an effort to expose the ugliness, in 2008 while he was a Congressman, Murphy wrote an op-ed for the Hartford Courant , “I Didn’t Get Elected to be a Fundraiser,” describing the room of cubicles in DC full of freshman and veteran members of Congress who spent hours a day tethered to the phone asking for money. On the positive side, he believed that the problem is solvable and that Internet fundraising has been changing the game (Obama in 2008 raised 40% of funds by crowd sourcing). He also saw states like Connecticut that have passed a clean election bill as a model for campaign reform on a national level. He began and ended his welcoming remarks by stating that while he started out as a proponent of campaign reform, he has since become a revolutionary on the subject.

Panel I: The 2012 Election - How Much Did Money Matter?

Not much, thought Ezra Klein, who moderated the first panel. He questioned the validity of the fear that money played an important role in the 2012 election. Klein and colleagues John Sides, Lynn Vavreck, and Seth Hill developed a model in the fall of 2012, which predicted Obama’s win more accurately than Nate Silver’s. Their model was accurate, he claimed, despite -- or because -- it didn’t pay attention to the stories about money in politics. The media narrative about money and the 2012 presidential elections made it seem like all the energy [money] was on the Republican side. At the Congressional level, there was fear that Republican funders were going to come in at the end and sway the race. But again, that didn’t happen, Klein pointed out. Democrats won many marginal races in both the House and the Senate -- apportionment had more to do with the results than money. Paul S. Ryan of the Campaign Legal Center looked at the affect of Citizens United. He said that money mattered not during the election, but after. Money bought influence during governance. He spoke about the arms race for each side to outspend each other and that outside spending after Citizens United went way up. The Supreme Court assured us that 1) Money would be spent "independently" of candidates, and 2) Money would be fully disclosed and transparent. But there was an unfulfilled promise of "Independence” and “transparency.” Groups don’t have to disclose their donors, except for the purpose of furthering political ads or specific ads. In the 2012 elections, Democrats and Republican PACs were really well coordinated. Sheila Krumholz, Center for Responsive Politics, outlined just how much money was spent on the 2012 election, $6.3 billion in total. Most of the money came from business groups that dominated labor unions by 15-to-1. The final tally for each candidate in presidential race was Obama 1.1 billion; Romney 1.2 billion. The GOP had the advantage from outside spending (34% of Romney's funding, only 12% of Obama's). More than that, the 2012 campaign gave rise of single-candidate Super PACs. Erika Fowler, Professor of Political Science at Wesleyan, directs the Wesleyan Media Project which collects data from each party on political ads. The project records and codes the data according to frequency, time of day and place, and TV program on which an ad aired. They also maintain an actual video of each ad. They found 2012 a "record pulverizing" year in ads, however they were more concentrated in specific areas than in 2008, and appeared much earlier in the campaign than previous years. In the primaries, 59% of ads were sponsored by outside interest groups. Pro-Romney side spent $1 million more than Pro-Obama. However their tactics were different: Obama had more ads on the air (41,000 more) and had an advantage in almost all the top media markets. Romney was much more reliant on outside interest groups providing the ads and they focused on more local TV news. In the Senate races, interest groups spent much more on ads than the parties did. Michael Malbin, of Campaign Finance Institute, looked at who were the campaign givers, separating them into two groups, small donors and large donors. The bulk of money comes from people who give $1000 or more, or from private or from private organizations. The panel discussed why people spend money if there's so little evidence that it sways races? Paul S. Ryan thought it was an attempt to ensure access down the road in the policymaking process and to curry favor within a party apparatus, and not necessarily candidate-specific. Sheila Krumholz thought that money influences who ran. Erika Fowler thought that spending money was an insurance policy simply because information is uncertain and one is never sure what the other side has in its back pocket. A discussion ensued on incumbency advantage, with panelists agreeing that Obama had the advantage in the 2012 election: Not only did he have many more ads than Romney, but most importantly he had four years to build a list of funders and to organize. 

Keynote Address, Lawrence Lessig, Harvard Law School

The keynote lecture [video and slides link when available] at the conference was delivered by Larry Lessig, Roy L. Furman Professorship of Law and Leadership and Director, Edmond J. Safra Center for Ethics, Harvard University and founder of Rootstrikers, a network of activists leading the fight against government corruption. Lessig is well known for his academic work and his advocacy on issues of copyright, Internet governance, and government reform. He has authored numerous books, including Republic, Lost: How Money Corrupts Our Congress—and a Plan to Stop It, Code and Other Laws of Cyberspace, Free Culture, and Remix. Lessig argued in this talk, titled “Getting Clear,” that we need to explain exactly how government is corrupt before we can think of ways to fix the problem. The corruption that matters, Lessig argued, is not of the quid-pro-quo money-changing-hands variety. It is a corruption of the idea that Congress should be dependent on the people. At present, Congress is more dependent on funders, but they are not one and the same as the general voting public. So, how exactly is the government corrupt? At the micro level, studies show that elected officials spend anywhere between 30-70% of their time on fund raising activities. This is learned behavior that carries a reward – a Funder’s Box similar to a Skinner Box. The consequences of this behavior are that elected officials bend policy to satisfy funders’ goals, an assertion backed by work in political science by Mann & Ornstein, Gilens and others. At the macro level, the pressure to raise funds also has implications for political parties, as they are less willing to take on certain interests on whom they rely for financial support. This situation preserves the status quo and locks the American political system in an “unprecedented sclerotic” situation. The solution, Lessig says, is to get Congress to spend "less time fundraising from a wider sliver of America." To achieve that, he calls for (a) clear articulation of the issues, (b) using the correct frame – cross-partisanship – that can generate a significant political movement, and (c) imposing actual consequences on Congress. This last point, he said, may be controversial (and risky) because it suggests that Congress has to be made to feel palpable fear of the prospect of an Article V Convention in order to act.

Panel II: Money, Inequality, and American Governance

Elspeth Revere of the MacArthur Foundation, moderated the second panel. The themes that dominated this panel were class disparities in political participation and representation, the power of lobbying, and the characteristics of those who govern.
Professor Kay Scholzman (Boston University) hiighlighted the disparate rate at which citizens exercise political participation, measured by contributions of time or money to political campaigns as well as actual voter participation. These differences are large and persistent over time. Notably, those belonging to the upper quintile, by socio-economic status, exhibit the highest level of political participation by all of these measures, and this has been the case since 1960. Scholzman reports that more educated citizens are more able and likely to desire political participation because the have a better understanding of the process, possess jobs involving civic skills, and receive incomes that allow them to make financial contributions. Organizations also play a key role in the way that political voice is structured by social class. Affluent organizations, including corporations but also interest groups like the NRA, can purchase characteristics that make individuals effective activists. Furthermore, employees of corporations are more likely to benefit from such lobbying—nearly 35% organizations lobbying Congress are corporations, which are more likely to serve the interests of white-collar workers. Meanwhile, service workers have little to no occupational associations other than unions, which make up only 1% of lobbying organizations. Continuing the discussion of lobbying, Lee Drutman (Sunlight Foundation) discussed the scale and scope of lobbying in Washington. According to Drutman, lobbying harnesses 10-12 times the amount of money from companies than is given to political campaigns. He attributed the myriad changes to the tax code and the declining tax burden as a share of corporate profits across the Dow 30 to such activity (for an illustrative chart, see http://sunlightfoundation.com/blog/2013/04/15/tax-lobbying/). While this suggests a very serious disparity in the way that individuals and corporations are represented, Professor David Primo (University of Rochester) offered a competing view of lobbying—that the conventional wisdom of “money = power” is perhaps too simplistic. According to Primo, lobbying plays an important role in informing policy makers to industry specific conditions, which legislation should account for. Lobbying produces positive externalities in the sense that returns to lobbying accrue to wider society (e.g., creating employment). Nick Carnes spoke about the class make-up of Congress, highlighting the scarcity of representatives with working-class backgrounds. Presenting data on legislators’ pre-congressional careers, Carnes demonstrated that working class individuals are critically under-represented in public office. He also explained that legislators from white-collar backgrounds differ considerably in their voting behavior—they vote more conservatively on economic issues, devote less energy to economic problems, have more conservative values, and tend to pass economic policies that favor the rich (e.g., the Bush tax cuts). In approaching the challenge of explaining why blue-collar workers are scarce in public office, Carnes dismissed the suggestions that voters prefer white-collar candidates or that blue-collar workers somehow are not “up for it.” Instead he hypothesized that blue-collar workers are less likely to possess strong access to fundraising or to be able to withstand a career disruption.

Discussion: Moving Forward

Archon Fung, Professor of Government at Harvard and co-founder of the Transparency Policy Network first tackled the problem of supply and demand. How do you reduce the demand for money in politics and who is the agent of change in campaign finance reform? He mapped out the problem with a diagram of concentric circles, where the inner circle comprises campaign finance/money people, and it goes out to those invested in lobbying reform, electoral reform, democracy reform, and finally numerous groups of people who are disadvantaged in the political process. The question he posed: How do you mobilize people to demand reforms of the political process? Was it best to do it wholesale—by engaging large-scale membership organizations to get them more concerned, or retail—take people as individuals who aren’t politically active and turn them onto the idea of money in politics? Fung thought the latter, that ordinary Americans participation is crucial and pointed to other countries that had recently reformed their system with active citizen involvement--Iceland and the Provence of British Columbia (see http://participedia.net) as a model to follow. Reihan Salam, a writer and conservative commentator, thought the problem was declining democratic responsiveness, due to the weakened state of institutions and political parties in general. The idea he put forth was to be more party-centric: strengthening the parties so that they have more leverage. A strong political party, he said, would be oriented towards the median voter. To close the gap between the median influencer and the median voter, he argued that we should allow for unlimited coordinated expenses between parties and candidates. This could reduce the incumbent-centric nature of our current system. He had two other ideas for strengthening parties and civic participation: 1) use the model of NYC's multiple match system, which has significantly increased political participation and increased the geographical diversity of the NYC electorate for city races; and 2) the idea of fusion parties that nominate major party candidates but have independent agendas, thus increasing participation among lower-income people. Ian Simmons, representing Fund for the Republic, set forth a roadmap for reform which focuses on the need to massively increase in resources, building a coalition for reform at the state and national levels which will be inclusive and focused around elections, improve "storytelling" around the issue, educate voters, incentivize institutions around this issue, and be creative. The panel discussed questions from the audience about the difficulties of implementing citizen participation, about the need to educate voters about their representatives' votes, the availability and quality of data about the effects of matching funds, and about asymmetric polarization.