Uncommon Sense

November 30, 2010

The Big “Narrative”

Filed under: Economics,Politics — Steve Ruis @ 9:45 am
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Apparently the hottest buzzword in our nation’s capitol is “narrative.” Basically what is being referred to is a story, actually a storyline, that is being used to shape people’s perceptions of our common discourse. One popular “narrative” is that businesses aren’t hiring because there is great uncertainty over what will happen to their taxes. Well, now we get to see if this “narrative,” like so many of the others, is just a lie in sheep’s clothing.

Now that the Republicans are in charge of the House of Representatives, the chances of a corporate tax increase anytime soon can be lodged in between slim and none. Already Republicans have been beating the drum that U.S. corporate taxes are some of the highest in the world (now that’s a lie that can’t be disguised as a “narrative”). So, this uncertainty “narrative” is no longer “operative” and we should soon see a wave of hiring done by Corporate America. Or not. I suspect “or not.”

If you haven’t been paying attention, reports of just a while ago were that American corporations were sitting on 2.5 trillion dollars of cash. So, they can’t blame not hiring people on not having the wherewithal to do so. And it has most recently been announced that third quarter 2010 profits for U.S. corporations are the highest ever measured! Right on the heels of what has been labeled the “Great Recession,” American corporations are making record profits? How is this possible?

The answer is quite simple. The markets for the goods of these companies are not robust, so their “sales” are down, but their costs of doing business are much farther down. By laying off so many people, and having the fear of losing one’s job to flog the employees remaining, American workers have increased productivity yet again. Also, if you haven’t noticed, the productivity of American workers is the highest in the world, but we haven’t benefited much at all from any of the huge productivity gains of the last 30 years. Well, where is that money going, if it is not being shared with the workers who are creating it? It is going straight into the pockets of the wealthy interests in this country who are spending record amounts of money buying politicians to make sure the current system stays this way.

They are not satisfied, these worshipers at the alter of Profit, not by a long shot. Their Republican puppets are pressing for lower taxes for the rich, lower taxes for the corporations, and fewer services to the poor and middle class to pay for them.

Watch, you will see all of this unfold in the next six months: corporations still not hiring, Republicans clamoring for tax relief for big businesses and for rich people.

And don’t be fooled by the “Repeal the Bush Tax Cuts Campaign” for those making over $250,000 per year. Only 3% of small business owners make over $250,000 per year. This tiny fraction of the “small businesses” (an almost complete misnomer) contains the lawyers, the S Corporations, and hedge fund managers who are behind the money spent to ensure Republicans got back in control of the federal purse. And think about it, if you made $260,000, you would have to pay $3950 instead of $3500 on that extra $10,000, an increase of $450 per $10,000 of income beyond the $250,000 level. Just for whom do you think this would have a deleterious effect? Hmm? Only on someone making way more than $250,000, lots more. We are not talking about “small” business meaning small earnings for the owners. We are talking about business with “small” numbers of owners. We are talking about oligarchs.


November 16, 2010

The Political Money Conundrum: How to Cut This Gordian Knot

Filed under: Politics — Steve Ruis @ 1:40 pm
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The 2010 midterm elections have just ended and, no surprise to anyone, record amounts of money have been spent. I have yet to hear anyone ask: Is the process or the outcome better because of this? If the question doesn’t get asked, an answer is unlikely to be forthcoming. Considering the question, I think you would have a very hard time arguing “yes.” We have had elections in the past which cost a great deal less and I can’t see any improvement in either the process or the outcomes one can attribute to the increased amounts of money being applied. But all of the forces acting on the situation are to the contrary, certainly the recent Supreme Court case (Citizens United vs. Federal Election Commission) didn’t help.

If you knew that 90% of the funds being dispensed by a major political fund came from three billionaires or, in the case of Crossroads GPS, that it got a substantial portion of its money from a small circle of extremely wealthy Wall Street hedge fund and private equity managers, would it change you mind as to the motives of the people those funds were directed to support?

Does knowing where the money comes from help? I think the answer is yes.

So, why is this problem so seemingly insoluble?

Part of the reason is the idea that spending money on politics has been defined as a form of free speech, protected by the First Amendment to the Constitution. But there are other fundamental considerations that seem to be being ignored. One of those is the “one man, one vote” concept, another is our representational form of our government.

There are reasons these folks don’t want their donations made public, so maybe we need to stop trying to identify the intimate details and take a different approach. Consider how our system looks to us, now. How would we feel if, say, Canadians started chiming in on our elections, including sending volunteers across the border to work in campaign offices and sending money to U.S. political candidates? Would we tolerate that? I don’t think so. What about foreign corporations insisting on having a say in our elections because our laws affect their business? We would tell them to mind their own business I am sure. Outsiders are not welcome in our political arenas. And this basic fact has the germ of a solution to the problem of the distorting effects of large quantities of anonymous political money on our politics. Inside of the United States we allow outsiders free rein! If there is an initiative on a ballot in California and a group from Utah or Texas doesn’t like it, money floods into the state from people who are not subject to the laws of the State of California to try to defeat that initiative. In the recent midterms, candidates just hours away from having won their primary elections showed up in Washington, D.C. to raise funds for their general election campaigns. (Hint: That’s where the lobbyists are.) Why do we allow outsiders to meddle in our local affairs? Why do we allow our politicians to solicit funds from people they do not represent?

Should you have any say as to who will be the next Major of Chicago if you live in Ohio? Should anyone living outside of the city of Chicago have any say? We don’t let “outsiders” vote, why do we let them determine who gets to run or who gets to run well? Candidates often gauge whether a run for office is viable with an initial fundraising effort. If sufficient funds seem to be available to run a successful campaign, they may say “yes” and run. If the funds don’t seem to be forthcoming, they generally decline to run. Why do we let a candidate who can’t convince people in his own district to fund his campaign go elsewhere for the money to run that campaign?

I grant “outsiders” their free speech rights, certainly, but just their speech (not their money) against my speech (not my money). If that other person is a billionaire donating millions of dollars to defeat a proposition or candidate I have donated tens or hundreds of dollars to support, the playing field is ever so far from being level. If I am a constituent of the person or am affected by the proposition involved, shouldn’t I have a level playing field, politically?

It is a proven concept of psychology that if someone gives you a gift, you feel beholden to them, you feel the desire to reciprocate. So, why am I put into a position where my elected representatives are more beholden to people they do not even represent than they are to me? Why am I subject to laws promoted by people they do not apply to? This violates the spirit of “one man, one vote” concept. “Thank you for your vote” feels quite different from “Thank you for your million dollar donation, Mr. Murdock.”

There is a workable solution here. And it is simple (relatively so).

The solution to the political money conundrum has as its goal a more level playing field for our politics. It is a simple concept, namely that money for a candidate or an issue may only be raised from people who live in the affected jurisdiction. For mayor’s races, funds may only be raised within the city’s limits. For candidates for U.S. Senator, they may raise funds from anyone in their state, presidential candidates my raise funds from anyone in the U.S., House of Representatives candidates may only raise funds in their districts. Water district commissioners may only raise funds from residents of their water district.

In this manner only the people who that person will represent or whom that law will apply to may fund the political efforts that determine whether that campaign will succeed or fail.

Outsiders will still have their say. They will speak on the media (T.V., radio, blogs, newspapers, etc.) and their speech is free. But in some circumstances, that speech isn’t free of cost and that is where the political money that comes into play which must be regulated. There have been myriad efforts to determine the sources of the funding for such political efforts, but our laws, in effect, protect such anonymity. Groups are allow to form with names like “Americans for Liberty” and “Moms for Apple Pie” and “Citizens United” who then become political actors. All efforts to require disclosure to date have been somewhat easily avoided.

But if we think like voters, the solution is straightforward. As a voter, I want to know whether the person(s) paying for the ad/brochure/event is a stakeholder or an outsider. If the ad doesn’t come from a group or individual in the jurisdiction using funds collected in the jurisdiction, it must be clearly labeled “Paid for by Outsiders.” If they want to go on and also state that the ad was paid for by “Americans for Freedom” they may certainly do so, as part of their free speech right, but the “Paid for by Outsiders” must come first and be more prominent than any other such identification. And such efforts may not be coordinated with official “in district” campaigns.

This gives voters the information they need. It also has an amazing array of secondary benefits. For one, the burden of raising funds for any political office, except for President, will be greatly lessened. Official or unofficial campaigns may only raise funds in a candidate’s district. One needn’t be scurrying about trying to raise money out of district. Nor does the candidate need to be negotiating deals with all kinds of sources of out-of-district funds. In fact, this would be illegal. In order to get constituents to donate, there must be communication explaining why the money is needed and what it is to be used for and what services the candidate is offering voters. Wouldn’t that be nice?

Lobbyists would have much less influence because their speech would be in the form of just words and not money unless the ones hiring them came from a legislator’s district. One cannot borrow or hire someone else’s primary residence for the purpose of making political donations just as one cannot buy someone else’s vote. Of course, lobbyists could promise to collect funds for a candidate in his district, but the voters in that district are still the ones who get to say yes or no to those requests.

This policy puts a burden on a candidate to build a base in his district in which they intend to run for office. No more, for example, would candidates from out of state be moving in short-term to establish residency and then using out-of-state funds to win a seat in the U.S. Senate, then moving to Washington with no connection whatsoever with the communities they represent. Candidates will probably need to build up a local reputation based on deeds to constituents in order to raise funds with them, all in all a good thing. Otherwise they won’t get elected to higher office in the first place.

The total amount of money involved in campaigns will decrease and so the money actually raised and spent will have to be spent more wisely (one hopes on higher quality communication than “attack ads”).

Sitting representatives will need to tend to constituents more closely as they are the only sources of funds for any re-election campaigns. This is to the good.

And, I am sure, more benefits will come to your mind as you consider this policy further.

Now, the recent Supreme Court decision (aka Citizens United) to allow corporations unfettered political spending is certainly problematic. But if the Court thought it wise to take a business fiction (that a business can become a person) and apply it to politics, we need to carry that to its obvious conclusion. Just as each individual has a “primary address” that determines the districts they vote in and the offices they vote for, this should also be the case for “corporate citizens.” Let us say that the U.S. corporate headquarters shall be the “primary residence” of the corporation and this establishes the districts of residence that determine to whom they can donate political money. Of course, they can still form groups to get their “free speech” rights for topics of concern to them, but they cannot contribute directly to any out of district candidates or issue groups and any “free speech” messages beamed into those other districts must be clearly labeled “Paid for by Outsiders,” because that’s who they would be. Employees of the corporation who live in a particular district could make donations as they wanted but the corporation itself could not, unless that district contains the “primary residence” of the corporation. Nor could the corporations direct employees to make donations or provide funds for them to do so. This would apply to labor unions and all benevolent organizations.

Now some might claim that this could emasculate political parties as they couldn’t steer events by collecting money from whatever sources and then pouring it into wherever they wanted. Quite the contrary, what would be required of any such body: political party, PAC, Better Business Bureau, etc., is that they become better organized and that they develop local bodies of constituents in districts to collect funds for them and distribute them. Funds earmarked for national offices, like President, could flow through to the national office of the organization but for in state offices the funds would have to stay in state, etc.

Political parties and unions can still support their “people” with web sites, phone calls, advice from experts, etc, as long as everyone pays their own communication bills. If they call a candidate with advice, that is free speech, if they call voters with a message, it must begin with “This message is paid for by Outsiders.” Talk and written communication aren’t being regulated, political money is. Experts could give advice but not work for a campaign unless the campaign paid them for their work. (I know it is a fine line, but something is better than nothing. Advice is speech but having someone come in and organize one’s campaign office, set up their computers or phone bank, etc. is labor.)

Organizations who could not get people to work for them could not substitute money for bodies unless that money was local. Rich people and large corporations would still have a great deal of influence in their localities but would they want to pay very large sums of money for smallish elections? Probably not. Currently we have billionaires using large amounts of money to leverage entire national elections. Their influence would be greatly curtailed by this proposal. They could still pay for a great many communication pieces to exercise their free speech rights and as long as they were labeled “Paid for by Outsiders,” they would be within the law.

If one wanted to be really tough, a pre-election audit might be required but the spirit of this proposal is more in the line of post-election audits. If someone was found to have significantly (not trivially) violated this law, their election could be invalidated. This would encourage people to “do it right” from the beginning. (England has just recently invalidated an election to the House of Commons because a candidate lied about his opponent. Taking money from outsiders illegally and then claiming one did not is a very significant lie (and would be illegal) which should be punished.)

This proposal would require legislation to implement and since it affects everyone it can be expected to draw fire. Since it creates a level playing field but one which still greatly favors incumbents (Who else is in a better position to do good work for their constituents?) contrary arguments by sitting politicians would be hard to rationalize. Politicians who vigorously oppose such legislation would clearly be doing so because they are beholden to monied interests as the power of those interests would be greatly curtailed. That is where the major opposition will come from.

What is more American, more constitutional, more revolutionary than establishing the sanctity of “one man, one vote” and free speech? At the time of the creation of the Constitution, a secret ballot was considered highly objectionable. The people needed to know who voted for whom and for what. (This ideal still holds in our Congress.) Secret ballots only came in much later in our history, which makes our support for “anonymous” political money all the more puzzling. Anonymous political speech was practiced by almost every one of the “founding fathers” (by writing under nom de plumes, for example) but if someone were to have paid them for their “free speech,” they would have been strung up from the nearest tree.

It is time to control political speech/money as we control regular speech. It is considered illegal to shout “Fire!” in a crowded theater with no fire involved. Such speech is not protected by the First Amendment. So, let’s clean up politics and simply erect a firewall between political outsiders, who are not directly represented in an election and the candidates and constituents who are.

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