Thursday, September 03, 2009

Reforms have had negative results

Published in The Tennessean September 3, 2009

Reforms have had negative results

By Richard J. Grant

Calling something "reform" does not make it good or necessary. Campaign finance reform has been neither. It has produced effects that are the opposite of those intended.

We were told that campaign finance limits would help protect us from political corruption, from vote buying, from cynicism and negativity, and reduce the amount of resources directed into political campaigns. But this has not been the actual result.

The No. 1 beneficiaries of campaign finance limitations have always been incumbent politicians. These are the same people who vote for such limits. Incumbents are already better known than potential challengers, who must work harder to build up name recognition. As in the promotion of any new product, new candidates must spend more resources to become known to the electorate and to make their positions clear.

With campaign finance "reform," the percentage of incumbents re-elected has increased significantly. Far from leveling the playing field and making elections more competitive, the funding and spending limits prevent many potential challengers, especially those who lack personal wealth, from entering the race.

Even the best challengers are hampered. Limits on individual donations force candidates to solicit smaller amounts from a larger number of contributors. This is less efficient than raising larger amounts from fewer contributors. Although it might seem desirable that a candidate demonstrate the serious support of a wide base, the limits give an artificial advantage to the incumbent, who would already have an established contributor list.

Low turnout is connected

By reducing the competitiveness of political campaigns, campaign finance laws have contributed to the low voter turnout numbers that we observe. By limiting the amounts that a citizen may contribute directly to any one candidate or party, the campaign laws enhance the growth of political-action committees and other vehicles of indirect participation in the campaigns. These indirect methods are less efficient than giving directly to the candidate. The citizens' political voice is thereby distorted and made less certain.

The same is true for limits on the political contributions of corporations. The political involvement of corporations has increased as governments have increased the level of their interference in business and the economy. Corporate political expenditures, whether for lobbying or campaign contributions, could not pay off if governments did not have the power to interfere the way they do. As it is, companies see it necessary to divert some of their resources into defending themselves against abuses of government power. Such abuses might be instigated by either statist ideologues or by unregenerate business competitors who lobby government for their own special advantage.

If the Supreme Court had protected us from the expansion of government powers that were once considered to be unconstitutional, then the court would not now need to hear arguments concerning the constitutionality of campaign finance laws. It is unlikely that such laws would ever have existed. Let us hope that, on September 9, the Supreme Court begins the process of correcting its past errors by ruling campaign finance limits, such as those in the McCain-Feingold law, to be unconstitutional.

Richard J. Grant is professor of finance and economics at Lipscomb University and a scholar at the Tennessee Center for Policy Research.

Copyright © Richard J Grant 2009