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What is Wrong with Presidential Campaign Financing
Three very disturbing patterns emerge from an analysis of the 2008 presidential campaign. The first is that none of the leading candidates for their party's nominations will be publicly funded. Second is that both Republican and Democratic candidates depend on large private contributions, not small donors. And third, the financial sector of the United States business community provides a disproportionate share of campaign funding.
There is an easy explanation for the first - Congress has underfunded the presidential system. Hillary Clinton, Barack Obama, Mitt Romney and Rudy Guiliani are raising and spending far more money than would be the case if they participated in the public funding system. The FEC website does indicates that if primary elections had been held in 2007 each candidate would have been limited to about $41 million. That figure will be adjusted upward in 2008, but the order of magnitude will be about the same.
The leading candidates have already exceeded those spending limits. Clinton ($91 million) and Obama ($80 million) have dwarfed them. And though the Republicans have not been able to raise as much, both Romney ($63 million) and Giuliani ($47 million) have also exceeded the amount they would have received from the public funding system.
One thing is clear. If we want our presidential nominees to be independent of private interests, the public funding system will have to be increased. Otherwise politicians who wish to be free from dependence on special interests will continue to be at a funding disadvantage.
The second problem concerns the size of the donations received by the leading candidates. In the aftermath of the passage of the Bipartisan Campaign Reform Act of 2002 and the use of the internet by the Howard Dean campaign in 2004 there was the hope that small donations would increase in importance and reduce if not supplant the dominating role of big contributions. The anticipation was that with BCRA shutting down soft money loopholes, candidates would work harder to raise funds from small donors and the internet would provide them with the means successfully to do so.
That hope has not been fulfilled. So far during the 2007-08 political cycle, fewer than 350,000 people, or 0.16 percent of the adult population, have provided political contributions large enough to be itemized ($200 or more).
What is worse, the front-runners for each party, Clinton and Romney, have collected only slightly more than 10 percent of their funds from people who contribute $200 or less and the same is true for Guiliani. Obama is the leading candidate who most depends on small contributions, but even in his case small contributions amount to less than 25 percent of his funds.
It is at the other end of the donation spectrum that the action lies. All four leading candidates raise about one-half of their funds from people who contribute $2,300 or more, with Clinton and Guiliani topping the list at more than 60 percent. Funding presidential campaigns is still the sport of big donors.
The third pattern is the remarkable similarity in the importance of the financial sector in funding all four of the leading candidates. This sector alone contributed slightly more than 20 percent of the money collected by Clinton and Obama. For Romney and Guiliani, contributions from this source came to almost one-third of their respective totals, and in both cases it was the leading fund-raising category.
The role of the financial sector in political fund-raising deserves special mention because of the crisis that is currently threatening the economy. What happened to cause this crisis was that mortgage lenders found ways to induce borrowers to take loans whose costs were beyond their means to repay. At the same time those lenders took advantage of a regulator failure by the Federal Reserve and devised techniques to evade exposure to those bad loans. As defaults mounted, new loans of any kind became more difficult to obtain. With that the case, economic activity has been impeded, threatening the country with a recession.
Obviously in the near future the loopholes that allowed all of this to occur will be the subject of intense public debate and proposed remedial legislation. But by making contributions to all of the leading candidates, it is quite clear that the financial community is preparing for this moment of truth. It seeks to ensure that they will have access and the ability to influence who ever enters the White House in January 2009.
The sad fact is that the United States system of funding presidential campaigns remains elitist and undemocratic. A public funding system that would make the process more equitable does exist, but is largely unused because it is badly underfunded. In the absence of public funds that would allow them to be competitive, political office seekers depend upon a relative handful of individuals whose large contributions make up the bulk of the money they raise. By spreading their wealth to all contestants, special interests are able to reduce the likelihood that they will be held accountable for their misdeeds.
This is not a political funding system that serves the interests of the people. We should affirm that if politics is to serve all of us, it should be treated as a public good and be paid for with tax money - we need clean elections.
Jay Mandle is the W. Bradford Wiley Professor of Economics at Colgate University. His latest book is Democracy, America, and the Age of Globalization.
Copyright © 2007 HuffingtonPost.com, Inc.
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In addition to public funding, we need the airwaves to provide free prime time to candidates to speak directly to the public. They are after all, our airwaves. We can set requirements that the candidates meet criteria as they must do for public financing so we don't clog them with hundreds of wannabees. I'm sure no "leading" would ever agree to this, as they benefit from keeping alternative views invisible, and not having to talk sensibly about topics of substance, since no one else is doing that, except the candidates no one gets to hear.
One thing is clear. If we want our presidential nominees to be independent of private interests, the public funding system will have to be increased.
That alone won't work unless funding by "corporate persons" is curtailed. Otherwise, those purchasers of representation that should belong to ordinary humans just pony up more cash from the obscene profits that they take from us in the first place.
Likewise with free prime time on the "public" airwaves. An excellent idea, but it also would need some regulatory measures to avoid being overwhelmed by corporate and financial interests, as with the phony insurance industry campaigns against universal health care, for example.
I can answer that question with one word; Israel, aka the phony baloney parasite democracy.
I agree with Professor Mandle's description of the problem, but not his solution. Public financing of campaigns means that we have no say as to which candidates our tax dollars are given to; the money is put into a gigantic pot. In fact, it's likely that some of our dollars will help support candidates we loathe.
The rise of the Internet has given us a perfect way to support the candidates of our choice. (In 2004, John Kerry raised at least $78 million through his website -- in modest donations from ordinary voters. The fact that the Internet has not produced huge outpourings of cash in this cycle is due, I think, to the fact that the campaigning started too early and so far we just have a bunch of sound bites flying in formation. Let's see how far the contributions rise by next November.)
We will need to pass a law -- or a constitutional amendment, if necessary -- eliminating public funding and preventing all business entities from contributing any money to political campaigns. That will strike at the heart of corporate corruption, which leaves candidates beholden to business interests instead of to the citizens.
Second, we must do what "BeForKids" just suggested above. They're OUR airwaves. Free time, no commercials! I'd also like to see far less "debating" and far more of what Charlie Rose has started to do on PBS -- discussing the important issues with each candidate, one at a time, for an hour. I watched Mike Huckabee there last week, and was surprised to find myself agreeing with some of his positions and interested in others (although I wouldn't vote for a Republican). The solutions to most of our problems cannot be described adequately in 60 seconds.
RIGGED AGAINST COMPETITION - WHY THEY KILL PUBLIC FINANCING
In economics, game theory explains how advertising can be a complete waste of resources.
For example, if four firms are in competition, each with a 25% share each of the market, they can maintain that share in two ways;
1) spend a million dollars each on advertising;
2) spend zero;
Why don't they all spend zero? Because each player acts on the what the others will do. If one lowers spending and the other three don't, the one loses business. So they all continue to spend one million each.
The only solution is either an explicit agreement not to advertise, or a regulation that requires no advertising.
If all four stop advertising, they still produce and sell their products, but with a savings of one million dollars each.
They still compete. They still innovate. They just don't advertise because TOGETHER, it's redundant and does nothing to improve market share for any particular participant.
Same with political campaigns. They're spending machines, driven heavily by each other's expectations and intentions to market and advertise their candidate. Each knows that pulling back from the pack imposes a high risk of loss and defeat. So everyone spends like mad.
And Big Media intends to keep it that way.
Enter federal financing - just like the market share example above - no more exploding expenditures on marketing and advertising the candidates - everyone has the SAME ADVANTAGE to enter the campaign, debate and expose themselves to the public WITHOUT massive expenditures.
What would happen: Big Media would lose massive amounts of spending on candidates.
Certain candidates who could ONLY rise with DISPROPORTIONATE expenditures would fade away, replaced by candidates who must compete on the merits and receive the SAME RELATIVE exposure - just like the companies that keep the same market share at the starting line - going forward, CHANGES in market (voter) share would be determined by factors OTHER than carpet bombing of the media.
Why it doesn't happen: It's the same reason medical care is not reformed. Propagandists start screaming about "socialized elections" the same way they do about "socialized medicine".
It's not about cost and price. It's not about efficiency. It's not about quality. IT'S NOT ABOUT RESTORING DEMOCRATIC VOTING (with a little "d").
It's about cheap, mindless sloganeering that reduces the campaign and voting process to "evil socialism" funded by government, brought to you by the same hypocrites that gush to spend endlessly "wasteful" government resources in Iraq.
Both federal elections and single payer health care COST LESS THAN HALF than the "privatized" version ... which is exactly why they're screaming ... the current system funnels huge amounts of funds into rigged private systems designed generally to AVOID competition, funds of such huge amounts that they make government provision of the same function look like a cakewalk.
That the candidates jumped ship and abandoned federal funding for private sources speaks to the massive amounts of funds in play. The game theory example also works in reverse. If one player doubles expenditures, the rest must follow or lose out, no matter how high the ceiling.
Sheer, obscene waste, like a cartoonish series of people (candidates) talking over each other to be heard better. They keep getting louder but are heard no better than when they started.
Very well said - thanks for the good explanation - B Payne-Economist. Do you (or does anybody reading this) have a strategy, some way out of this impasse?
Americans are taught that the freedom to wield what financial clout that you have is paramount. To impose artificial limits on that freedom is thought to be terribly unjust. Americans must identify and sympathize with the rich man, and do not constrain him. You may realize the American Dream and fill his shoes one day!!
Meanwhile, the rest of the world is surpassing the US in prosperity, health, peace and well-being for less energy expended. All things American, its currency, its ideas and methods, its production, its institutions, its influence, are falling by the wayside.
So Hillary tries to change reality with the lie: "American leadership is still wanted around the world". (power abuse 101: change reality by parroting lies) Hillary is invested in the game as much or more than anyone else.
The good news is that the world really is making progress without US leadership - so our opportunities to join in solidarity with our peers worldwide to make true progress is better than ever - we simply need to identify and reject the siren songs of power to keep ourselves free.
Important topic and impressive comments. I was just thinking about how localization and community based governance continue to address nearly every issue, inluding this one.
Then I forgot why we need to have such big nations. I mean really, the United States is huge! I've probably just forgotten the advantages. Is it safety in numbers? A more magnetic tourism brochure? Could someone help me out here?
There are three things that could be done to straighten out our elections.
1. In the House, make it a law that the candidates can only receive campaign donations from the people they represent. Part of the problem now is that they receive donations according to what committee they sit on rather than from the people they represent. Further require them to collect and submit petitions with the signatures at least 5% of the people they want to represent to be considered a viable candidate. For Senators, same requirements, but they would be able to raise donations from the State they want to represent. The only national election would be for President and Vice President.
2. Form a Government funded television network that will give equal air time to all viable candidates.
3. Get rid of the premise that somehow corporations are people with individual rights, they aren't, period.
4. Don't hold your breath while you wait for it to happen.
Lobo Gris:
Exactly! But it will most probably require a constitutional ammendment. The Supreme Thieves (court) have detemined that money = speech, any attempt to restrict money to candidates, in their opinion is a violation of free speech. So an ammendment, I think, is the only route.
Until we get that ammendment, and I don't see why the American people wouldn't go for it, the situation won't change. Campaign finance reform and all the other half-ass measures are only smoke screen.
Thank you for bringing it up. The smartest people are on Common Dreams - that's why I'm here.
Ramsay
The Kucinich campaign has spent in the neighborhood of ONE million dollars to date. As many of you know he accepts NOTHING from corporate interests. His popularity is beginning to spread thanks to the grassroots progressives.
I believe that ALL candidates should be funded ONLY by "We The People". Imagine how hard the candidates would have to work to get people's attention? Imagine how much more content about, oh, I don't know, ISSUES would start appearing instead of diamond/pearl questions or UFO tactics to minimalize the best candidate?
The money spent by Unc Sam could then be used for more domestic problems like low income housing help, education, or homeless shelters. Not to mention building a LARGE maximum security prison for criminal politicians!
Why is the establishment so keen on outsourcing infrastructure, defence, etc? Because a private security firm can do one thing that the pentagon cannot - it can make campaign contributions. It really is that simple. Follow the bribes, people, and it all starts to make sense.
Ramsay---Couldn't agree more with your assessment of the posters here on Common Dreams. There really are some VERY smart and very thoughtful people.
Lobo Gris---in my gut I know you are absolutely right.
BPayne Economist---thanks for your succinct explanation for why the current system seems so entrenched.It, too, rings very true. Have you thought as deeply about solutions? Would be interested in the possible fixes for this "tired and essentially rigged" game.
The real power seems to rest with players profiting handsomely(obscenely) from the staus quo.
Would Soros, or Warren Buffet help fund a campaign to educate the public about a Constitutional Amendment aimed at correcting these abuses? How would one find out?
I'm not ready to concede that corporate ability to donate to political campaigns is greater than that of a united group of private individuals. Many of our public officials are pawns for corporate interest only because we the people allow it. One hundred thousand individuals united behind one candidate can raise 20 million dollars for that candidate. All they would need to do is donate $200 each.
This would require a very grassroots approach and candidates would begin to wake up when the noticed they were receiving major funding from small groups spread across the country. It doesn't take large local campaign offices and staffs. You could meet at people's homes or small local gathering places. You could communicate via the internet. There are several groups in my hometown for various candidates which are very well organized and do regular fund raising.
I feel the best way to achieve campaign finance reform is to take in our own hands and do it. There is no need to wait for the Washington bureaucracy. Sometimes we forget how powerful we are.
Vital to representive democracy as campaign finance reform is, the constitutional impediment to such reform rests in overturning the US Supreme Court decision: VALLEJO.
This decision basically equated a citizen's right to influence elections via 1st Amendment right of Free Speech, with such citizen's financial resources.
Vitrually all constitutional scholars agree that overturing this decision (the logic of which guarantees Plutocracy) is impossible without a constitutional amendment, because of the 1st Amendment hang-up.
Choice voting, where if your first choice is elected then part of your vote slides to your second choice, is fair and honest. A citizens commission of the province of British Columbia chose choice voting for their provincial legislature, and then it almost got the 60% needed for enactment.
51%-takes-all voting usually means that exactly two parties always court blocks of voters until each has 49% right on the knife edge, and then the last 2% is stupid enough to be up for sale. So huge amounts of money chase that last 2%, and whoever sells out or embezzles the last 2% generally wins.
Choice voting for, say, a block of 10 seats, means that the last idiotic 2% of the public can only influence 1 seat out of 10. It immediately deflates the power of money in the election. A crook who can only buy 1 seat out of 10 will give up every time, because there's no way the government can then be looted. That's what has happened so far in local elections where choice is used.
I agree that campaign financing is doomed from the start. That's why it's so politically popular?
Zydeco---good point, but in all honesty, I could never afford to give $200. I live on less than a $1000/month. I know there are any number of people who can, and it's my understanding that is how the Internet works to raise money from real citizens. With some sacrifice I sent DK $25 last week.
The question I have is this---In your scenario, someone who collects all this money then presents it to the agreed upon candidate and says what? This comes from people who demand you give us single payer? An end to the war? What? Since money talks, as you have said, what is the message? Apart from the fact that it comes from a group of people who can give, say $200 each, instead of $2000? It doesn't necessarily equalize our clout with the big donors and the corporations. Am I missing something?
Currently we have a govt that mostly lets corporate interests determine legislation. Corporations need to be stripped of the massive power they have ammassed if we,the people are to have a say in the priorities and the policies this Nation pursues. Otherwise we simply have the best govt, money can buy.
star:
Easy solution--Incorporate We the People.
eze--
Yea!
star--
I'll try to be brief. Do the same thing corporations do. That is, use your financial support to say we believe in the principles you espouse and we expect you to stick to those principles as President. Think about all the reasons you support DK. You've probably given support to him mentally, emotionally and spiritually. Your $25 donation is one way of giving to him physically. Now you're in completely -- you're totally committed. Not that you weren't totally committed before, but for so many people, giving money is the final step and it solidifies their commitment. So it's not necessarily the money but the commitment. Since the talk was about campaign finance reform, I used that example to show a way I feel you can exercise your commitment financially. I don't see donations as buying a candidate but rather supporting them and their efforts.
What I'm trying to say is -- we have a tremendous power through individual commitment. When 100,000 individuals committed to the same purpose come together they have amazing power. Donations are one way to use this power. I'm using power here as the ability to act or "get things done" as opposed to the ability to force your views and will on others. I think this does equalize clout with the big donors. At the very least, it keeps your candidate on the same playing field as those of the big donors and it keeps their message from getting overshadowed. Look at the Republican side. Mit Romney has tons of money -- his own and corporate. However, little Ron Paul was able to raise 4.5 million in one day from donations of $100 or less. Now all of a sudden his message is getting heard and he's going up in the polls. The same can be done for DK or any other candidate.
We also have to remember that the commitment doesn't stop after election day. That happens too often. If your candidate wins, you and the other 99,000 people should stay in contact with each other and the candidate (hold their feet to the fire). Even if the candidate loses at least stay in touch with each other.
The people have more power -- I believe -- than any corporation. I have far greater concern for people asleep to that power than I do for any corporate "power."
Well, so much for brevity.
Zydeco November 17th, 2007 10:18 pm
"One hundred thousand individuals united behind one candidate can raise 20 million dollars for that candidate. All they would need to do is donate $200 each."
If we had a government funded television network that gave equal time to all of the viable candidates they wouldn't need to raise that much.
Lobo Gris
Election funding should be 100% public funded. It should be a level playing field and media should provide air time to each candidate in equal measure. We need to take special interests and well-heeled bank-rolling lobbyists out of the picture, period. Candidates need to reach more people? Let them go door-to-door -- that should be a real education for some of them. Almost as good as traveling the Third World as a reality check.
Presidential campaigns should be PUBLICLY financed only, and a ceiling set. Otherwise, a brain dead or an immoral crook with more money may become president. So long as money talks, democracy walks.
Looking at how other countries do it, I can't find a more crooked system. The system sucks, and the proof of it is the president we got today. Only public financing and equal exposure time to candidates will let you hear Mr Kucinich.
Alan Keyes has the best plan
If you can't vote, you can't contribute. No corporate donations!
Public financing? No way. How do you even do that fairly?
We need adequate CAMPAIGN SPNDING LIMITS!!!!!!!