Editor’s note: This commentary is by Rick Hubbard, who is a native Vermonter, retired attorney and former economic consultant now living in South Burlington.
Steve Farnham of Plainfield has responded to my recent Jan. 30th VT Digger commentary titled “Vermonters Join the New Hampshire Rebellion” and put forth his own thoughts about how to achieve real campaign reform. Steve doesn’t much like the idea of using public money to finance political campaigns. In fact, he vehemently disagrees!
Instead, he has his own proposal for improving the political process, so thank you, Steve, for that. I’d be the first to admit that reform of our political system ought to include a broad array of improvements. In addition to public funding for all federal elections, truly comprehensive reform will not likely happen without considering, and probably including, many or most of the following:
- Independent citizen redistricting of voting districts.
- Full and free use of our public airways for moderated, in-depth debate during each election cycle.
- Much shorter election cycles.
- Primary candidates selected and elected by all voters.
- Elimination of the Electoral College, replaced by popular vote.
- Candidates elected by a majority, not plurality, of all voters.
- Uniform national standards and procedures among all states for federal elections.
- Full disclosure of all funding and spending for all federal elections.
- A weekend voting day, plus registration and voting procedures to increase voter participation.
But setting aside for a minute, all the myriad other ways we might improve things, let’s consider Steve’s objection head on, because it’s an important question and I thank him for raising it. Why should we fund our federal political process, or our own Vermont one for that matter, with money from all of us?
I can practically hear the response from some of us right now. “I don’t want my good money going to those lousy politicians.”
It sounds like a reasonable response. After all, you and I work hard for our money, and most of us feel we don’t have enough of it these days. So why should we spend it helping all those politicians fund his or her campaign. Will it really change their incentive to better represent my interests, rather than those of the wealthy special interests who currently provide the big bucks? Hell, I’m not even going to like most of them. What’s in it for me?
Let’s take a good close look at this question.
… suppose before politicians could access this public money, they got it only in direct proportion to the number of tiny donations, in amounts all of us could afford to give, that they had to get from us.
First, let’s define what we’re talking about. After doing the math, which I’ll discuss in a minute, it comes down to this: “Why should I and my household, and every other household in America, each spend about $29 a year (at current levels) to fully fund the cost of our entire federal political system?”
Will I get a good return on my investment?
If you and I invest our $29 on Wall Street, statistics show that from January of 1970 through December of 2012, if we invested in U.S. Bonds, we’d earn an average yearly return of about 8 percent, really only less than 4 percent after subtracting for inflation. If we instead invested in U.S. stocks, we’d earn an average yearly return of about 10 percent, less than 6 percent after subtracting for inflation.
If each of us invests our $29 in publicly financed political campaigns, is it likely we can get cash benefit back of more than 10 percent, or $2.90 each year?
Oh yeah – is it ever! Suppose I say it’s likely we can double our $29 each and every year, or even more, much more. Am I blowing smoke?
To better understand why this is not only patriotic, but financially to our own advantage, let’s go back to the math we set aside a few moments ago. Bear with me. This gets a little dense.
The approximate total cost of financing all federal campaigns in the 2011-2012 election year cycle was $7.1 billion. Since this is over two years, let’s divide it in half to get a cost of about $3.55 billion each year. Now let’s divide this $3.55 billion by the current U.S. Census Population Clock estimate of 317,498,394 as of Feb. 8, 2014, at 8:15 a.m., while I’m writing this. The result is $11.24 per person. Multiplied times the 2010 U.S. Census’ 2.58 people per household, we get a figure of $29 per household per year.
Now $29 per household doesn’t sound so bad, but $3.55 billion to finance our entire federal political process for a year still sounds like a lot of money. But in relation to the $3.8 trillion federal budget for 2014, it’s practically chump change – a mere 18/100ths of only 1 percent of the entire budget.
Now imagine you’re CEO of a Fortune 500 U.S. company and you could spend (call it “invest” if you want) a portion of that chump change funding the campaigns of politicians on the key congressional committees dealing with your industry. Think of all the creative ways you could benefit your company if you’re giving this “investment” to politicians, who need these campaign contributions to get elected, would give them incentive to subtly bend their positions and “lean to the green” in ways that result in huge financial returns for you and your company.
An incredible amount has been written, researched and spoken about to document the resulting perversion of law, regulation and policy caused by the way campaign money is raised by our Washington politicians.
We Americans are still dealing with the aftermath of the financial crisis, which began in 2007-2008 and produced perhaps the worst economic meltdown since the Great Depression. Our collective wealth initially declined by trillions of dollars, millions lost our jobs and unemployment levels still aren’t back to where they were before it began. Moreover, as taxpayers, we’re now all on the hook for the hundreds of billions of public dollars in debt our country piled up to bail out the banks. So what does all this have to do with the need for public financing?
Remember Bill Clinton and the “New Democrats” with all the rhetoric of shifting to the center of the political spectrum. In fact, during the Reagan years, Republicans were getting the bulk of Wall Street’s political contributions and the Democrats wanted in. In order to do so, the Democrats needed to be more business-friendly, more “mainstream.”
One of the changes those on Wall Street wanted was the dismantling of the Glass-Steagall provisions of the Banking Act of 1933, enacted in response to the financial shenanigans that led to the Great Depression. The act limited commercial banks from engaging in the trading of securities, and limited banks from affiliating with securities firms. In 1999 Democrats joined Republicans in “leaning to the green” by passing the Graham-Leach-Bliley Act, which essentially removed this barrier, helping to set the stage for the subsequent financial crisis beginning in 2007-2008.
Removing the Glass-Steagall barrier certainly helped Wall Street to get a great financial return on their “investment.” They made billions and earned huge bonuses. And it certainly helped the Democrats get more contributions from Wall Street, which in turn helped more Democrats get elected. But how did it serve the interests of us ordinary citizens?
We got hosed!
But suppose political campaigns were financed differently, on behalf of all of us, and suppose before politicians could access this public money, they got it only in direct proportion to the number of tiny donations, in amounts all of us could afford to give, that they had to get from us. Suddenly, their incentives are reversed, now they need to approach us, to serve our interests, in order to access the larger public money to spread their message broadly. Let’s just flip the concept and have the public at large get a huge return on our investment.
There are various ways to accomplish this. Maine, Connecticut and Arizona all fund aspects of their state’s political process with public financing for the state’s representatives and senators. Vermont chose a different course, which hasn’t worked out so well, which focused only on our top state officeholders. Nationally, Congressman John Sarbanes has just this week re-introduced the bipartisan Government By the People Act (H.R. 20), which has been endorsed by over 35 national organizations advocating for education, environment, clean government, labor, civil rights and more.
While there are many aspects of improving our political process we could discuss, the reason so many diverse organizations are supporting the Government By the People Act is because they understand that to make progress on the many other issues they care about, they must first fix this. It’s the root cause inhibiting and distorting progress on everything else they care about.
When Washington politicians put the interests of wealthy funders of their campaigns ahead of our interests, it doesn’t matter whether we’re conservative, moderate or liberal. We’re all affected.
Ask yourself:
The pharmaceutical industry can charge prices for drugs at whatever the U.S. market will bear due to patent protection and lack of competition, while selling these same drugs to other countries at much lower prices, so:
Whose interests were being protected when Congress in 1988, made it illegal for businesses in other countries to buy drugs manufactured in America at much lower prices than those available to Americans and then re-sell them back into the American market. Formerly, they’d been able to mark up and re-sell these same drugs back to American consumers who saved by buying them at prices still well below the higher prices being charged here by drug companies under patent protection?
Whose interests were being protected when Congress in 1995 extended by an additional three years the term of patent protection to protect higher prices?
Whose interests were being protected when Congress in 2003 prohibited the federal government from negotiating to lower prices on behalf of Medicare Part D plans?
Bankruptcy is designed to give a fresh start to persons and enterprises overwhelmed by debt, so:
Whose interests were being protected when Congress amended the law and made all qualified education loans ineligible for discharge in bankruptcy?
Whose interests were being protected when Congress amended the law to make it easier for the management of corporations to “reorganize” in bankruptcy, stiff its creditors, break contracts, and reduce pensions while managers remain in charge of the company and often collect huge subsequent bonuses for “streamlining” operations?
I could go on and on, but I’m sure you get the idea.
So I’ll put my money on public financing, at least if it’s done right, to make the biggest difference in correcting our broken, dysfunctional, federal political system. Let’s hope my fellow citizens will also decide it’s very much in all our interests to reverse these incentives. Let our Washington politicians put the interests “of we the people” first, as our founders originally envisioned.
Meanwhile, I’ll gladly work with Steve and others to build support for the many other improvements necessary, in addition to public financing, to truly bring about comprehensive political reform. Let this be a robust discussion, involving all Vermonters, with each of us bringing our best arguments to the table as we strive to reach consensus.
For starters, we’re pretty much all in agreement that we’ve got a big problem, and that solving it is important, for it goes to the very core of our democracy and representation.
