Matt Stoller is a fellow at the Roosevelt Institute. You can follow him at http://www.twitter.com/matthewstoller.
One of the reasons I loved Neil Barofsky’s book Bailout is because it is a clear explanation of the incentive structures in our political system. One element of his story that you might find surprising is how rarely elections actually come up among policymakers. Careerism, intellectual capture, subtle forms of bribery, institutional embarrassment, intimidation, bureaucratic jujitsu – all of these have a massive impact on policy outcomes. But elections? Yes, they matter as well. But they aren’t that important. And if you read Bailout, or really just pay attention, what you’ll find is that policy simply didn’t change when Obama took over from Bush, which is a fundamental challenge to our notion of democracy, perhaps even more so than corporate money flooding into our elections.
That is, the idea that all politicians want to do is get elected, and therefore they are worth despising, is actually untrue. If it were true, then you would find politicians constantly proposing and implementing popular policies, like free universal health care, high taxes on corporations, jail for Wall Street bankers, and higher minimum wages. But they don’t do this. The reason, as I wrote in June of 2011 in Beyond Elections – the Hedging Theory of Political Elites, is that political actors are only interested in winning elections to the extent that strategies for winning don’t jeopardize their place in the political class.
Political analysts tend to gloss over what I would call hedging behavior on the part of political elites. While elections are somewhat random, the fact that you will be on the losing side of an election at some point is guaranteed. So politicos don’t ask: What’s the best way to win an election? Rather, they ask: What’s the best way to preserve my risk-adjusted position in the political ecosystem of influence and money? This means setting yourself up to win an election if possible, but not in an especially populist manner that could increase the downside of losing or falling into the minority.
I spent some time pointing out going over one example out of hundreds, as an illustration of standard operating procedure. Congressman Chris Van Hollen staffer Doug Thornell, while working for Van Hollen, railed against special interests in the health care space. PR specialist Doug Thornell in 2011 then railed against unfair tax penalties on corporations that wanted to repatriate and bring home their profits. And even today, Thornell tweets and writes pieces lambasting Republicans for their poor policy choices. Is there any doubt that someone like this is going to return to a staff position in government, and then cycle back out to earn huge sums of money yet again? Of course not. What is valuable to Thornell, therefore, is not making sure that Democrats win, it’s to preserve his sinecure regardless of whether they do. Populism or left-policy policy implementation and communication is the way to jeopardize his position, so that’s what he (and people like him) avoid like the plague. It’s why Iran hawk Elizabeth Warren, who in her book The Two Income Trap equivocates on the government subsidizing child care, is seen as a left-wing ideological extremist (ha!).
Another example of this is Bill Clinton’s $80 million payday after he left office.
On December 21, 2000, President Bill Clinton signed a bill called the Commodities Futures Modernization Act. This law ensured that derivatives could not be regulated, setting the stage for the financial crisis. Just two months later, on February 5, 2001, Clinton received $125,000 from Morgan Stanley, in the form of a payment for a speech Clinton gave for the company in New York City. A few weeks later, Credit Suisse also hired Clinton for a speech, at a $125,000 speaking fee, also in New York. It turns out, Bill Clinton could make a lot of money, for not very much work.
Clinton, who had scandals as significant as Eliot Spitzer, is a beloved figure worth enormous sums of money. In a country opposed to US interests, if the husband of the Secretary of State was taking large sums of money from entities all over the world with vested interests in that country’s foreign policy, the US would be the first country to scream and cry “corruption”.
All of this is a way of saying that most US politicians by and large would like to win elections, but they aren’t going to jeopardize a future revenue stream or even their membership in the club of the global elite to do so. This is true for all parts of the political ecosystem, from politicians to staffers to campaign operatives to pollsters to consultants. While losing a race isn’t fun, if you rock the boat and lose, you’re done. And the structure of how political consultants make money – similar to cost plus government contracting where the more they spend the more you make – means that you aren’t rewarded for outcome, you are rewarded for not being worse than the other consultants. The only people who are desperate to win elections are activists that have a strong ideological stake in electoral outcomes. With that in mind, it’s worth looking at a post by Redstate publisher Erick Erickson called The Con$ultant Cla$$.
We have all these GOP Super PACs sucking up millions and millions of dollars to help Mitt Romney and now in the summer lull? Nothing. But I bet some consultants are getting rich. It’s like the GOP consultant class learned all the wrong lessons from Bob Shrum…
In the meantime, the GOP Super PAC ads continue to be mostly forgettable while the Super PAC’s themselves continue to raid the pockets of GOP multi-millionaires.
Now add two more data points.
David Dewhurst of Texas spent $25 million of his own money to lose badly to an upstart named Ted Cruz who only a year ago was polling at 3% in the polls. It was reminiscent of Charlie Crist’s collapse.
Last night in Missouri, Todd Akin, a man with a congressional record with much to go after, beat John Brunner. Brunner spent $8 million.
Note to GOP multi-millionaires: when consultants are circling you, plying you with compliments, and telling you how awesome you are, understand that what is going on is that you are roadkill and they are vultures. They will pick your carcass clean.
So, Republican SuperPACs are raising hundreds of millions of dollars, and Romney himself is going to have a few hundred million dollars as well to spend. But are their ads actually resonating? Does the money matter? As always, it’s hard to tell. You can’t run a control election with certain ads and an experiment election with different ones. The incentives, though, align well with Republican operatives running a race that panders to billionaire donors, who will keep funding their lavish careers, rather than a race in which ads actually persuade voters. After all, when Republicans in the primary ran anti-Bain ads, their donors became upset, and threatened to cut off the money spigot. Establishment Republicans and their corporate allies, because they don’t really fear a second Obama term, are willing to let the 2012 election be dominated by grifting billionaires and gratifying Romney’s ego about the importance of the capitalist class.
Anything could change, of course, and Romney might win regardless. But the messaging that would be devastating – on housing, unemployment, incompetence and corruption on the bailouts – hasn’t been used systematically. There must be a reason.