Bell Curve The Law Talking Guy Raised by Republicans U.S. West
Well, he's kind of had it in for me ever since I accidentally ran over his dog. Actually, replace "accidentally" with "repeatedly," and replace "dog" with "son."

Sunday, August 30, 2009

Cash for Clunkers?

The Supreme Court is revisiting and expected by many to restrict some earlier rulings that had previously bolstered the power of the government to regulate campaign finance--specifically the use of corporate money. After some narrow escapes a few years ago, the McCain-Feingold Act may finally be cornered by the new conservative Bush appointees.

Yet this old-style type of campaign finance reform may be increasingly irrelevant. The aim has always been to limit the influence of big money, but for the first time since the advent of the modern Presidential campaign, the big corporations and big donors did not dominate the political landscape in 2008. They were swamped by a flood of small contributions provided via the internet. Was the little guy able to out-finance the big guy because the corporations were hampered by restrictive legislation? Or has the internet become such a powerful fundraising tool that those restrictions were simply not relevant?

Another interesting aspect to all this is that big donors and small donors appear to have opposite psychologies. Big donors donate in order to purchase political influence, and therefore they are more inclined to support perceived winners. Little donors, on the other hand, contribute out of passion and conviction, and thus they are most inspired to pitch in when they feel their cause is on the ropes. And so in 2008, contrary to all prior conventional wisdom, Obama and Hillary did their best fundraising immediately following their most bruising defeats.

The old dynamic encouraged positive feedback; the new dynamic adds some interesting negative feedback that may tend to draw out the process. It also widens the field in general. We are no longer limited to those candidates deemed to be "serious" by the corporate elite. Ron Paul drew in millions because he was a radical, outside of the mainstream. The equalizing and aggregating effect of the internet not only gives dedicated voters a greater chance to participate in politics--it also draws some of the disaffected back into the democratic process.

So the Supreme Court can go ahead and loosen some of the restrictions on corporate donations... They no longer buy the influence they used to, which was the whole justification for restricting them in the first place. Just don't let them mess with net neutrality.


Raised By Republicans said...

Great post Dr. S!

I think this new internet fundraising encourages a different kind of risk acceptance from the old model. In the old days, the idea was to avoid alienating key fundraising sources - big labor, big Pharma, big insurance, big ag, etc. But now, the idea is to appeal to the broadest cross section of WIRED voters. These voters are slightly more affluent but not hugely more affluent. They are also likely to be - and this is key - a little younger than the current median voter and certainly younger than the current median donor.

I will disagree a bit about the Ron Paul phenomenon. Ron Paul's appeal was not necessarily "radical" and I would hesitate to conclude that the lesson from Ron Paul's fundraising success on the internet was due to radicalism. I'll also point out that while Ron Paul did much better at raising money than most "also ran" Republican primary contenders, he was easily outspent by the big guys (especially McCain and Romney).

The lesson I take from Ron Paul's candidacy is that Ron Paul's image (in my opinion a largely incorrect one) as a libertarian/non-interventionist as opposed to a social conservative with an aggressive, militarized foreign policy view appealed to exactly the kind of younger, middle class voters that drive internet donations.

But when you compare Paul's internet success to that of Obama and Clinton - yikes! These donors are sure looking like they are more likely to be mainstream liberals. The really large opportunities for internet fund raising may be in the center (and center-left) rather than the fringes of either side.

Dr. Strangelove said...

Thanks, RbR!

Ron Paul did not succeed in fundraising as well as Obama and Hillary--no question there!--but he did still amazingly well given the media's view of him, that he was not a "serious" candidate. In the final quarter before the voting began (2007 Q4), the top three fundraisers were: Hillary ($27 million), Obama ($23 million), and Ron Paul ($20 million).

I was using the word "radical" loosely... Perhaps too loosely. I just meant that he was perceived as being outside the mainstream. He sold himself as "libertarian" even though, as you rightly point out, he was more like a social conservative in many ways--but no matter how you slice it, I think he was viewed as more "out there" than any of the other candidates.

It will be fascinating to watch how 2012 unfolds. Assuming the Mayans are incorrect, of course ;-)

Dr. Strangelove said...

Thinking a little more about it, let me stress that it was the perception of being a "new voice" of some sort (libertarian, whatever) that helped Ron Paul. He appeared to offer something new--at least he marketed himself that way--even though as you say much of what he offered was conventional enough.

Raised By Republicans said...

I guess my point is that merely being radical or a maverick or whatever label we want to attach to politicians like Ron Paul is not enough. I was suggesting that there ideological and demographic asymmetries to where the net-money is located that might benefit Democrats far more than Republicans. Ron Paul was by far the most successful Republican at internet fund raising and he certainly finished the 2007 fund raising period strong. But he was crushed despite all that.

Part of this is that the internet helps to mobilize small donors. It doesn't really help get more out of the big donors. They get mobilized with or without the internet. But the internet does bring in lots of $25 or $50 donation.

The partisan bias to web based fundraising comes in because I suspect that people who would like to donate that kind of money AND have access to the internet are more likely to be voters the Democrats can win over. I'm not saying the Democrats have these people locked up but it's not like the internet fund raising is tapping into donations from 55+ year old white males with no college education (the "typical" Republican voter). Sure some of the non-college white Baby Boomer males have computers but I bet if we ran the numbers we'd find that the internet donations are coming disproportionately from college educated Gen Xers and Millennials. And as we've discussed in other threads those demographic groups are far more likely to be socially moderate to liberal.

I don't think we disagree that much Dr. S. I just think you inadvertantly gave the impression that you attribute web based fund raising success to a candidate's opposition to party leadership. I think that MIGHT explain different levels of web based success among Republicans but I don't think it explains differences among Democrats or between Democrats and Republicans.

Dr. Strangelove said...

In 2008, there were--as you say--ideological/demographic asymmetries regarding net-money that favored Democrats. I am not convinced this will continue indefinitely, but hopefully at least for the next couple of election cycles!

I did a teensy bit of web research just now... And it suggests you are right about Ron Paul. He got a lot of enthusiasm from the radical right, but the charts and maps shown here indicate to me that Ron Paul received his support (at least geographically) from more conventional areas.

I still think he brought in some of the disaffected, just as Obama did from the other side. Which is a good thing. But it was not, as I had mistakenly thought, the main thing.

Dr. Strangelove said...

This map does show a strong regional bias... Not in absolute terms, but on a per-capita basis, he seemed to light a fire in the Idaho/Montana area in terms of donations. So he did bring in some of that... But in absolute terms, Texas etc. were the big "harvest" states for fundraising.

Raised By Republicans said...

I think you are correct that any advantage the Democrats have because of demographics will diminish over time as the less web savvy older voters die off and are replaced by people who have been using the internet most of their lives.

But the question then becomes will Gen Xers reverse their positions on social issues as they get older? If not, then the result of all this on the national political debate could be a slight shift to the left - especially on social issues.

The Law Talking Guy said...

As someone who spends a lot of time studying First Amendment law, let me make this suggestion. The Supreme Court is going to dramatically loosen restrictions, going back even beyond Buckley v. Valeo, I would guess. This would have happened without the internet fundraising success of 2008, but now it will happen with barely a peep, since the Obama political machine doesn't care that much about it.

Ever since 1996, the Supreme Court has set itself on a path that would result in the repeal of almost all campaign finance limits. The Roberts court will finish it, I suspect.

As Justice Black (I think) said decades ago (I paraphrase) the answer to bad speech is not controls on speech, but *more* speech - the corrective kind. Similarly, the solution to the evils that campaign finance reform was supposed to correct (excessive corporate influence) will be corrected not by banning that influence, but by public funding of campaigns.

As for the internet, that's great, but I would not be sanguine about the internet really leveling out the playing field over the long haul. Corporate money can outspend the rest of us any day of the week and twice on Sunday. If they have to pony up more dough, the result will only be more control of politicians by them UNLESS we go to public campaign financing.