SYDNEY WILLIAMS: POLITICS AND MONEY
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Politics and money go together, as the old song says, like “love and marriage.” “You can’t have one without the other.” Cronyism, corruption and extravagance are consequences.
The cost of a Presidential campaign has risen ten fold over the past sixteen years. In 2000, George Bush spent about $180 million. It has been estimated by CNN that Hillary Clinton will spend $1.7 billion on her 2016 campaign. That suggests the cost of running a Presidential campaign has compounded annually at 15%, while the annual inflation rate has risen by 2.1 percent. Another way of looking at the same picture is that the Bush campaign spent roughly $3.50 for every vote received in 2000; Mr. Obama spent about $20.00 for every vote he received in 2012; and Mrs. Clinton, should she win in 2016, will have spent $30.00 for every vote. The value received (unless one is in the media business) does not warrant the moneys expended.
What prompted these thoughts was a piece by Gary Hart in “Time.” The article was entitled “America’s Founding Principles are in Danger of Corruption,” a dubious title for a system that already is corrupted. The report itself was disappointing, as it was mainly a seductive way to segue into a diatribe against Citizen’s United.
I agree with Mr. Hart’s iteration of the four qualities that distinguish republican governments: sovereignty of the people; a sense of the common good; government dedicated to the commonwealth, and resistance to corruption. I would add the sanctity of the rule of law, property rights of individuals, majority rule, the protection of the rights of minorities and the rights embedded in the Bill of Rights are critical to a civil, democratic and successful society.
Also vital to our form of government (and what is missing in today’s polarized world) is a free and independent press. Such a press should act as a government watchdog. It is why it was once called the “Fourth Estate.” Not so today. It once served truth, not favorites. Eighty to ninety percent of the media leans left. But no matter their politics, they have become advocates. The press should report news in an unbiased way and expose corruption, regardless of where it is found.
It is corruption that concerns Mr. Hart, and I share that concern. Corruption and cronyism throughout our political system threaten to undue what our founders worked so hard to create. But Citizen’s United is not the root cause of this evil. Political corruption goes back almost to the start of our republic. From the very beginning money and gifts were used to purchase influence. Even Boss Tweed and Huey Long existed long before anyone dreamed up the concept of a PAC.
Attempts to influence decision makers are natural. Politicians wield influence and access is valued. It is unrealistic to expect politicians to either arrive in office pure or remain so for long. No matter what good intentions an aspiring Congress man or woman might have, the siren songs of lobbyists are impossible to ignore. Money will go wherever it can be effective. Every Bill that passes through Congress has an affect on someone, some industry, or some union. Lobbying is natural and has been around as long as our republic. It is not going away, and it should not. Legislators do not (and cannot) operate in a vacuum.
Every well-intended law that has been passed to limit campaign contributions has been undermined by clever lawyers who find exemptions and exceptions. In fact, most have worsened the situation. McCain-Feingold may have been benignant in terms of intent, but the consequence has been more money in politics than ever. Direct contributions to a candidate and PACs limit the dollar amount that any individual or entity can make. On the other hand, Leadership PACs (set up by elected officials and Parties) and Super PACs (as long as the spending is “independent” of the campaign) have no limits. Those groups are required to disclose the names of all contributors above $200.00. In contrast, 501(c)(4)s do not limit donations and worse have no disclosure rules.
There are four simple steps that could be taken. First, no contribution to any political campaign should be tax advantaged. There should be no reason why a person who chooses not to contribute to a campaign should subsidize those that do. Tax write offs for 501(c)(4) and 527 organizations (which include PACs, Super PACs and political parties) should be disallowed. For example, neither the Sierra Club nor the NRA should be allowed to contribute tax exempt dollars to a political campaign. If they chose to contribute, it would have to come from donations that were not tax deductible. Second, the names of all contributors should be disclosed. If a contribution is made in the name of an entity, information on that entity should be disclosed, including its principals. Voters should know who is buying influence and with whom. Third, there should be no limits on contributions. Attempts to do so in the past have failed miserably. And, fourth, there should be no public financing of political campaigns. “Public financing” is an innocuous sounding term, but it means that we, as taxpayers, are paying for the campaigns of people with whom we disagree.
There is one point on which everyone agrees, and that is there is too much money in political campaigns. But everyone seems to have different ideas as to how to correct the problem. In general, the Left feels that regulation should limit spending, while the Right feels any such limits would violate one’s right to speak.
It is not Citizen’s United that is the problem, nor is it Wall Street, rich individuals or public sector unions. The elemental problems are the tax exempt status of so much of the money and the secrecy that enshrouds so many of its sources.
The elimination of the tax advantage given to donors and forcing disclosure of all campaign gifts I suspect will do more to limit money spent than any set of regulations. But even if it does not, it would be more honest, open and fairer. Lawyers would be unhappy, for there would be fewer rules for them to bend in a way favorable to their clients, but the rest of us should be happier. There is no good answer. Money and politics cannot be separated. What we need is the least bad answer to a problem that will never go away.
The Opinions expressed above are mine alone, and do not represent those of the firm Monness, Crespi, Hardt & Co., Inc., or of any of its partners or employees.
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