Too Much Money Spent on Political Campaigns Or Potato Chips? (Or both?)

At the Ethos Debate camp at Patrick Henry College last week, I spoke on the NCFCA topics for the first time.

I showed a segment from  this LearnLiberty.org video on Citizens United by Bradley Smith (former head of FEC):

And another on Money in Politics by Smith. I also recommend this segment on free speech and election law.

For those who say far too much money is spent on political campaigns, one response is that more money is spent on potato chips. A Google search confirms that many have spent time contemplating the meaning of potato chip spending vs. campaign spending. The Monkey Cage finds The Economist using the potato chip line and doesn’t like it one bit, offering six reasons potato chip purchases are in fact different from campaign spending.

Maybe a compromise solution would be to have campaign advertising on potato chip packages. This generates a sort of happy response to critics who either claim the problem is campaign spending being too low or potato chip spending too high. However, one study suggests potato chips already contain a kind of political advertising.

The popular view is that there is too much money in politics, and that candidates, and elected politicians interested in reelection in the U.S. system have to constantly raise campaign funds. This is more a consequence of current federal election law that limits donations to small amounts, as inflation has reduced the value of the dollar.  Brad Smith suggests that sweeping away the accumulated layers of federal election laws and regulations would be more old policy than new policy. That is, it would return federal election law to what it had been from the founding to around the 1970s (though there were a few earlier ineffective federal election laws).

You can read more in Smith’s book Unfree Speech: The Folly of Campaign Finance Reform (Princeton Univ. Press, 2003) on Amazon. (And a number of used copies are available used). Smith is quoted favoring abolishing “leadership PACs” in this article, though in more campaign finance areas, he favors less FEC regulations.  Smith especially favors making it harder to prosecute people accused of violating ever more complex federal election laws, as discussed in this July, 2013 Huffington Post article.

Economic Regulation Attracts Special Interest Money
As important as all this potato chip research may be, the bigger issue I think, is overall spending by politicians after they are elected, rather than before.

A lot of corporate money is spent on political campaigns, associations, and political action committees because a lot is at stake. Most are skeptical of special interest groups that donate to election campaigns to protect their own industry. But research shows these special interest donations surprisingly ineffective. This Cato review in Regulation is helpful, “The Power of Special Interests.”

Consider wireless companies and corporations that own television stations. TV stations control wide swaths of electromagnetic spectrum beyond what they use for their main stations, and they continue to broadcast old TV shows and Abbot and Costello movies on the excess bandwidth. This same bandwidth would be much more valuable as wireless spectrum for smartphone calls and data. TV stations don’t own the spectrum, they just sit on it from the old days of analog broadcast. 

So television stations and broadcast associations lobby Congress for regulations that allow them to profit from transferring bandwidth they don’t much use and never owned to myriad wireless firms starved for spectrum. All these players, along with their lawyers and lobbyists, donate to political candidates, party fundraisers, nonprofits researching and writing on the topic, as well as too consultants eager to advance one side or the other. Small changes in legislation wording can means tens or hundreds of millions of dollars to corporations active in government controlled land, sea, or air space.

This 2011 New York Times story discusses the fight over federal spectrum assets and regulations.

When federal government powers are expansive and influence businesses across the country and around the world, you can expect those businesses to donate and lobby for the decisions that help their clients and firms. But federal election laws and regulations designed to limit corporate and association influence in campaigns is more likely to trip up citizen involvement rather than the more organized and better funded corporate special interests.