Campaigns Interpret Regulation as Damage

The idea behind election finance reform is a noble one: elections tend
to go to whichever candidate wields the most money and can buy the
most votes; so let’s even out the playing field, and give less-rich
candidates a chance.

There are a number of problems with actually achieving any change,
though. For one, campaign finance reform has to be enacted by
politicians whose own reelection campaigns are likely to be hampered
by it.

Another is that any reform is unlikely to address the core problem.
John Gilmore is
quoted as
saying that “The Net interprets censorship as damage and routes around
it.” In other words, let’s say you’re trying to move pr0n from point A
to point B. But some site in the middle doesn’t like pr0n, so it
intercepts your data packets and drops them on the floor. From your
point of view, it looks as if that site has a broken cable or a power
outage or something. But the Internet is failure-resistant, so your
data packets find a different path, avoiding the affected site
altogether.

And so it is with campaign contributions.

We saw this in the 2004 election, with
527 groups.
527s aren’t subject to the same restrictions as political action
committees (PACs), but are supposed to campaign for issues, not
candidates. But hey, who’s to say that “John Kerry isn’t fit to be
president” isn’t as valid an issue as “stop pollution” or “closed
borders”? Every “Bush is a douchebag” ad put out by an organization
like Move On was an ad that the Kerry campaign didn’t have to pay for,
allowing it to use the money elsewhere.

We’re seeing something similar in this election: Obama’s impressive
fundraising has meant that he doesn’t need the party’s help, so the
party can take money it would normally have spent on the presidential
race, and redirect it to help state or local races.

The Post has an
article
about other instances of this effect.

The myth is that instead of getting money from a small number of rich
donors, he has received lots and lots of small contributions, making
him not beholden to any group of rich people. But according to the
Post, only a quarter of the money he has raised came in the form of
contributions of $200 or less.

And for those willing and able to donate more than the legal limit,
there are several legally separate organizations all working toward
the same general goal of getting Democrats elected.

The closest equivalent to the soft-money donors of the
Clinton era, or to Bush’s “Pioneers” and “Rangers,” are those who have
contributed to each facet of the Obama fundraising
machine.

If a budget is split up into sufficiently-many buckets, it can be
arbitrarily large, and an individual donor can contribute an arbitrary
amount by putting a little into each bucket, instead of just giving
the candidate a big lump sum directly.

Obviously, the nominally-separate buckets — like 527s —
can be regulated as well, to try to bring the total amount of money
spent on a campaign back below some total limit. But it won’t help.
You’ll just get Democratic Catering, Texans for Giving Pro-Life
Candidates Sweetheart Deals on Transportation, Advertisers Donating
Their Services For Progressive Causes, and so forth. At some point,
it’ll get so diffuse that laws aimed at limiting campaign financing
will affect legitimate, non-political organizations as well. Kind of
like the Great Firewall of China, which manages to censor the net, but
at great cost to freedom.

Unfortunately, I don’t have a solution. Obviously, we can’t just give
up and go (back) to unregulated, anything-goes campaigns, because that
reintroduces the original problem of the richest candidate outspending
the others into irrelevance. But I do know that when there’s this much
power (read: motivation) involved, the market will figure out a way to
get around regulation. Perhaps all that’s possible is to curb the
worst excesses, and try to avoid the previous election season’s dirty
tricks.

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