NPR Says More Campaign Finance Regulation Needed for Better Government

Many hours on the highways for me means many hours listening to and enjoying NPR (plus some hours with talk radio). NPR offers thoughtful and nicely-crafted segments from around the U.S., though the focus is usually on political and economic issues. NPR stories provide a sense of how news-stories are shaped and how they shape the world views of NPR listeners.

Consider Friday and Saturday NPR segments on the federal government shutdown. NPR interviewed European politicians in Washington DC for a major International Monetary Fund conference and also interviewed various political scientists. NPR segments noted that government shutdowns don’t happen in Europe because countries there don’t have “artificial debt limits” and because parliamentary systems in Europe put parties or coalitions in charge of both executive and legislative branches.

The political scientists given airtime claimed that weakened campaign finance regulations are the key problem, since politicians can be targeted by attack ads funded by outside groups. Such things don’t happen in Europe, according the European politicians interviewed, due to their stronger campaign finance laws.

Chaos, bankruptcy and government collapse in Greece and Cyprus do happen in Europe, but weren’t mentioned in the segment. Also not mentioned was on-going high unemployment and economic turmoil in Spain or political turmoil in Italy. Italy’s federal government falls and is replaced every few months (apparently by the same people), but that doesn’t stop Italian federal welfare funds from flowing. 

The trade-off in governance is between elections every two, four, and six years in the U.S. for House members, Presidents, and Senators, which often leaves one party in charge of one branch of government while theother controls another branch, while in European systems a single party or coalition is empowered to pass legislation, but sometimes not for long. Politicians in charge fall when they lose a vote of confidence.

An alternative and I think more compelling take on this recent bout of federal political dysfunction takes a very different and nearly opposite view. Less than half of Congressmen and women are likely to face contested elections. Secure in their seats, they have little reason to compromise.  This Money in Politics LearnLiberty.org video explains.

In the video (and online transcript: click “+Transcript”), Brad Smith notes: 

Outside money seems unable even to convince qualified candidates to run for office, much less fund competitive campaigns. The recent Massachusetts Senate campaign between Ed Markey and Gabriel Gomez offers an example. Longtime congressman Markey “backed by a river of outside money” according to this Boston Globe story, ran for the Senate against while a well-regarded but unknown Republican candidate. After decades in Congress, Markey had boatloads of special interest funding plus name recognition.  

Since the 1970s, as layer upon layer of campaign finance legislation was passed by Congress, campaign money flows increased to incumbents. Increased federal spending on federal government projects provide expanded news coverage in home districts. House members are on radio and TV regularly to explain the benefits of new bridges, museums, light-rail, social programs, or any of hundreds of other federal projects in home districts. Plus CSPAN, NPR, and talk radio are conduits for live audio and video feeds featuring federal politicians speaking to constituencies in home states and Congressional districts.

So where NPR claims the problem is too much outside money in politics that scares sitting politicians from “acting responsibly” to keep the federal government going and spending and borrowing, outside critics (that is, critics outside the orbit of NPR reporters) see gerrymandered congressional districts coupled with special-interest campaign money to sitting politicians who are easily reelected term after term after term, until they give up their seats to be lobbyists, or die, or are sent to jail.

No one should enjoy turmoil and lives disrupted, but the Greek variety of political and economic disruption seems of a different order than the U.S. partial federal government shutdown. The key difference follows from the U.S. government’s ability to continue borrowing to finance deficit spending, plus the Federal Reserve’s ability to provide funds by purchasing $85 billion of Treasury bonds each month. If the Greek government had been able to continue borrowing or print money or both, it would not have had to reduce welfare state spending.

Deficit Spending, Disorder, and War

Federal governments in Europe plunged the world into war twice in the last century, with World War II a direct consequence of federal deficits, unfunded government pensions in Italy and deficits and hyperinflation in Germany (for a history, see John T. Flynn’s 1944 book As We Go Marching). Less gridlock and separation of powers allowed German and Italian politicians to seize economic power quickly, erase federal debts by refusing to pay creditors, and then legislate, regulate, and nationalize domestic firms as part of muscular “lets get the government working again” nationalist system (where the trains were supposed to run on time, but didn’t).

Here is brief segment on the enthusiasm for socialism and nationalism in Europe and Russia from 1980s UK documentary The New Enlightenment:

Socialism was popular in England and the government put in place the National Health Service in 1948, and expanded other welfare programs. The central government also took over the “Commanding Heights” of the UK economy, nationalizing firms to form British Airways, British Telecom, British Leyland, British Rail, and other national enterprises, all enthusiastically reported on by the British Broadcasting Corporation.

The excellent (though sometimes uneven) PBS documentary The Commanding Heights, tells this story of enthusiasm for central government control influencing scholars then intellectuals and later politicians (transcript here, video segments on YouTube):

This is the story of how the new global economy was born, a century-long battle as to which would control the commanding heights of the world’s economies — governments or markets; the story of intellectual combat over which economic system would truly benefit mankind; the story of epic political struggles to implant those ideas on the nations of the world. 

The Commanding Heights book is excellent too, and available from Amazon for under $12. Highly recommended.

In the U.S., Herbert Hoover dramatically expanded federal programs and spending, signed protectionist legislation, and pushed U.S. corporations to keep prices and wages up even as the economy and demand contracted. The new Federal Reserve System accidentally shrank the money supply by one-third, after accidentally expanding it too fast in the late 1920s, much as the Federal Reserve and new federal banking and financial regulations did in the mid-to-late 2000s. More on this story in The House that Uncle Sam Built (pdf).

Then Franklin Roosevelt’s “brain trust” vastly expanded Hoover’s federal programs with the New Deal. Some New Deal programs were declared unconstitutional by the Supreme Court, but most survived or were revised and approved by a reconstituted Supreme Court. New Deal expenditures were small compared to expanded federal programs of Lyndon Johnson’s Great Society in the 1960s, which looked small compared to Richard Nixon’s expanded spending (EPA, Vietnam, etc.), and all these look small compared to increased spending and expanded programs–military or domestic or both– of by every U.S. President since.

The large military and domestic spending increases during the George W. Bush administration have continue and expanded through the current Obama administration. In good economic times, state and federal tax revenue soars and government spending soars with it. During the bad economic times that follow, state governments are forced by balanced budget amendments and lack of fiat currency power to cut back or slow spending. The federal government tends to use economic downturns as a reason they need to ramp up spending to “prime the pump,” “create jobs,” and “get the economy going again.” The spending never stops and rarely slows.

Turmoil caused by the federal government shutdown is unfortunate. Americans are offered various explanations. NPR and other media spokesmen blame “tea party” extremists “holding government hostage.”

An alternative perspective focuses on the high levels of federal spending directed to private contractors and regulated industries who in turn return cash back to the campaigns of friendly politicians. At the same time campaign finance laws empower thousands of federal and state bureaucrats at the Internal Revenue Service, Federal Election Commission, and similar state agencies, to investigate citizen groups and potential challengers. Sitting politicians elected from salamander-shaped Congressional districts, plus outside special interest funds, have little interest in compromise and little to fear for the next election.

If homeschool students researching and debating the federal election reform topic wander off the reservation and take this important debate to wider audiences of local business and community groups, high school and college campuses, and to local newspapers, radio, and TV audiences, well, the federal government will come after you too.

More on the welfare state we’re in, and how the U.S. and other European countries transitioned here, is discussed in the various chapters of After the Welfare State (online here).