$6.3 billion
the total cost of U.S. elections in 2012
According to Open Secrets, the total cost for the U.S. elections in 2012 was around $6.3 billion. This is up from $5.3 in 2008 and $3.1 in 2000. In just 12 years, the total expenditure for a presidential year election has doubled – all with the background of a stagnate economy.
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The economy goes nowhere but the cost of elections doubles in 12 years. This fact alone symbolizes how perverse the incentives are in our democracy.
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Money plays a big role in who wins
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In every election cycle since the data was available going back to 1990, the average winner either in the Senate or in the House outspent the average loser.
For example, in 2010:
The average winner in the Senate spent $9.8M, while the average loser spent $6.5M. The average winner in the House spent $1.4M, while the average loser spent $.68M. Source: Open Secrets |
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Cash trumps principles
 Source: prioritiesusaaction.org |
Here is an example of how when a system is fraught with perverse incentives even individuals trying to do the right thing generally cave in.
US News reports President Obama as saying: "With all due deference to separation of powers, last week the Supreme Court reversed a century of law that I believe will open the floodgates for special interests — including foreign corporations — to spend without limit in our elections. I don't think American elections should be bankrolled by America's most powerful interests, or worse, by foreign entities." |
Nevertheless, President Obama switched his position and created his own super PAC (Priorities USA Action) after the passage of Citizens United v. Federal Election Commission. According to the Washington Post: “Obama campaign manager Jim Messina said in a message to supporters that “our campaign has to face the reality of the law as it stands,” which he said gives a large financial advantage to Republicans and their allied groups... We can’t allow for two sets of rules in this election whereby the Republican nominee is the beneficiary of unlimited spending and Democrats unilaterally disarm,” Messina wrote.”
Mr. Messina does have a point. According to Open Secrets, "Outside spending by super PACs and politically active nonprofits on the presidential race also came out heavily in favor of Republicans. Conservative outside groups spent $454.5 million to get a Republican elected president, while liberal outside groups spent a relatively paltry $124.5 million."
It's all about the incentives.
Mr. Messina does have a point. According to Open Secrets, "Outside spending by super PACs and politically active nonprofits on the presidential race also came out heavily in favor of Republicans. Conservative outside groups spent $454.5 million to get a Republican elected president, while liberal outside groups spent a relatively paltry $124.5 million."
It's all about the incentives.
Not only do politicians have to raise ever larger
sums of money, they are also subject to
intense pressure by lobbying groups
 Source: Open Secrets |
With so much money sloshing around every year, it is not difficult to persuade, nudge or intimidate politicians to vote in a certain way. |
Companies spend money on lobbying
because lobbying pays off
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Clic Luigi Zingales, a professor of entrepreneurship and finance at the University of Chicago, discusses how:
"From venture capital to telecommunications, from the construction industry to teachers’ unions, there is plenty of demand for evidence that celebrates the benefits of these industries and justifies (implicitly or explicitly) government subsidies to them. There is no equally organized and active demand for evidence that all of these subsidies are distortionary, waste money, and make companies less rather than more competitive.” |
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Eliminating the revolving door
is an absolute must
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The influence of lobbyists is not only dependent on how much money they are spending but also on the promise of providing future employment to those working in the government. Jack Abramoff, the infamous lobbyist now evidently reformed, in an opinion piece in Bloomberg writes about this issue:
“During my time lobbying, I found that the vast majority of congressional staff I encountered wanted to get a job on K Street. And why not? Their jobs on the Hill were only as secure as their boss’s re-election prospects. Even then, they were never certain when they would encounter an office purge. The other side of the rainbow -- K Street -- was heavenly. Salaries were much higher. Perks were abundant. And lobbying is a growth industry, no matter which party is in office. As young staff members got married and had children, making the jump to K Street was often on their minds. ..It was a dirty little secret. And it is a source of major corruption in Congress. There is only one cure for this disease: a lifetime ban on members and staff lobbying Congress or associating in any way with for-profit lobbying efforts. |
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That seems draconian, no doubt. The current law provides a cooling off period for members and staff when joining K Street. The problem is that the cooling off period is a joke.
Here’s how it works. “Senator Smith” leaves Capitol Hill and joins the “Samson Lobbying Firm.” He can’t lobby the Senate for two years. But, he can make contact with his former colleagues. He can call them and introduce them to his new lobbying partners, stressing that although he cannot lobby, they can. His former colleagues get the joke, but the joke’s on us.
Because the vast majority of lobbyists start on the Hill, this employment advantage is widely exploited. It cannot be slowed with a cooling off period. These folks are human beings, not machines -- and human beings are susceptible to corruption and bribery. I should know: I was knee-deep in both. Eliminating the revolving door between Congress and K Street is not the only reform we need to eliminate corruption in our political system. But unless we sever the link between serving the public and cashing in, no other reform will matter.”
Below is Abramoff's interview with 60 minutes:
Here’s how it works. “Senator Smith” leaves Capitol Hill and joins the “Samson Lobbying Firm.” He can’t lobby the Senate for two years. But, he can make contact with his former colleagues. He can call them and introduce them to his new lobbying partners, stressing that although he cannot lobby, they can. His former colleagues get the joke, but the joke’s on us.
Because the vast majority of lobbyists start on the Hill, this employment advantage is widely exploited. It cannot be slowed with a cooling off period. These folks are human beings, not machines -- and human beings are susceptible to corruption and bribery. I should know: I was knee-deep in both. Eliminating the revolving door between Congress and K Street is not the only reform we need to eliminate corruption in our political system. But unless we sever the link between serving the public and cashing in, no other reform will matter.”
Below is Abramoff's interview with 60 minutes:
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The above perverse incentives make it difficult for politicians and their staff to function. Money cannot play such a critical role in elections, lobbyists cannot be so powerful, and the proverbial revolving door cannot remain to be so wide open. Ironically, given the present rules, we need a lobbying group to implement these changes - a lobbying group to contain the role of money and influence peddling. It is ironic but, sadly, it seems to be the only way to bring about real change.
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