Lobbying as a Legislative Subsidy

Ezra Klein has written a great piece for the New York Review of Books; diagnosing some of the ways money does, and does not, corrode our political system.

In many of the conversations I've privately had with liberal friends and acquaintances, money and politics is often reduced to a kind of arithmetic: Money + Politics = Corruption. I do not completely disagree with the assertion, but I certainly think there is more to it that that (as I've touched on here). Why I like Klein's piece so much is that he really plumbs the depths of causation mechanisms between well financed lobby interests and favorable legislative results. The problem with the "lobbying as a form of bribery" hypothesis is that it doesn't really stand up to scrutiny in the real world:

[...] lobbying, at least in its bluntest form, doesn’t seem to work. For many Americans, lobbying is a form of bribery. A rich lobbyist goes to a corrupt congressman, money changes hands, and the lobbyist gets his vote while the congressman gets money for his campaign. Many researchers have tried to find systematic evidence of vote buying. Very few have succeeded. Lessig quotes research by Dan Clawson, Mark Weller, and Alan Neustadtl, which concluded, “Many critics of big money campaign finance seem to assume that a corporate donor summons a senator and says, ‘Senator, I want you to vote against raising the minimum wage. Here’s $5,000 to do so.’ This view, in its crude form, is simply wrong.”

Klein explains that lobbying, instead, is more a form a legislative subsidy:

In addition to providing campaign contributions and employment prospects to outgoing elected officials and their staffs, [lobbyists] provides legislative expertise. Political scientists call this “the legislative subsidy” model of lobbying, and it poses a serious challenge to the view that lobbyists are little more than parasites.

The theory was first proposed by Richard Hall and Alan Deardorff in a 2006 paper entitled “Lobbying as Legislative Subsidy.” The paper was an attempt to solve a problem that, at first glance, should not have needed to be solved, because it should not have existed in the first place: Why is the behavior of lobbyists so hard to predict?

For instance: you would think that lobbyists would concentrate their financial power and well-honed connections on the politicians they need to persuade. But they don’t. They concentrate it on the politicians who are already most convinced of their positions.

In a lot of ways, the money spent on lobbying is not so much a direct attempt at vote buying or bribery, as it is an indirect attempt at agenda setting and coalition building. Certainly there's going to be "ol' boys club" type glad handing, which favors those who already are familiar and participants in networks of privilege. But that does not necessarily mean that levels of financing is the only factor.

One last thing that I think is very important, and is not mentioned nearly enough, is the fact that the "expenditure effect"; that is, the amount of influence lobbyist spending has on an issue, recedes in relation to the issue's prominence. Klein explains:

Take any issue that you’ve actually heard a lot about. The headline clashes. The big-ticket bills. They’ve all got money on both sides. They’ve all got platoons of lobbyists swarming onto Capitol Hill. They’ve all got activists and interest groups and even ordinary Americans pestering their congressmen. And they all go the same way: the Democrats vote with the Democrats, and the Republicans vote with the Republicans.

That’s true even when the big money lines up in favor of another outcome. In 2011, the Chamber of Commerce and the AFL-CIO joined together to call for a major reinvestment in American infrastructure. None passed. In 2010, most of the health care industry was either supportive or neutral on the Affordable Care Act, and if any one of them could have swung the votes of even a few Republican senators or congressmen, the desperate Democrats would have let them write almost anything they wanted into the bill. But not one Republican budged. In 2009, the Chamber of Commerce endorsed the stimulus bill as a necessary boost to the economy. Not one House Republican voted for it. Almost every major business group has been calling for tax reform and a big, Simpson-Bowles-like deficit reduction package for years now. But Congress remains deadlocked.

I do not want to imply that I do not think money is an issue in American politics; it is. But I think we need to look at the effect money has on our political system in less ideological way, and in a more scientific way.

Bonus: Ta-Nehisi Coates' own thoughts on Klein's work.

Policy and Incentives

The United States' Federal Budget has many problems. They are compounded by Republican party's a priori allergy towards taxes, irrespective of context. On that note, Ezra Klein talks some sense about budget policy, and the radicalism of the current state of the Republican party's fiscal proposals:

You can’t look at that and say revenues have nothing to do with our current deficits.

Which isn’t to say it’s not difficult for elected Republicans to admit that taxes need to rise. The Club for Growth might primary you. Grover Norquist will come after you. But being responsible is difficult. No Democrat who says Medicare and Medicaid and Social Security can’t be cut can be considered fiscally responsible. And no Republican who pledges to oppose all tax increases, regardless of circumstances, can be considered fiscally responsible. There’s no curve here. There’s only math. And politicians who want to be applauded as “responsible” can’t be permitted to ignore it. (emphasis mine - JMG)

The kind of policy "flat-earthism" that Klein is talking about permeates the the Republican party so much right now because the party's constituents are demanding it. I think this is the real tragedy of the Republican party these days. Perhaps even a tragedy of our politics in general.

Ideally, elected representatives and they constituents they represent would work in concert. People have policy preferences and vote accordingly. In turn, paid representatives of the state have a responsibility to the people they represent, to be clear about the realities of the state's finances. To me the problem is coming from both ends; GOP voters want to hear strident re-confirmations of preconceived conclusions about spending and taxes. Republican officials are not responsibly trying to cultivate a discussion of what are budget problems are, and what possible solutions might be.

Intellectual curiosity is a tricky thing. But without it, I think, we are worse off as a nation.

The Lionization of the Free Market: "But at some point, this game has to stop":

In an interview with Ezra Klein, the Director of the Institute for New Economic Thinking Robert Jackson makes the above quote. He also expands on a basic argument that our financial and political structure is institutionally biased towards creditors (e.g. banks) rather than debtors. In short, that "our politics, our lawmaking institutions, are set up to disproportionately represent people who have money." (Bold mine - JMG)

What Jackson sees as a functional result is that:

when given the choice between forcing Greek citizens through the grinder of austerity or attempting a debt restructuring that can unleash unknowable consequences in the credit default swap market or the relations between large banks, to choose austerity. They don’t understand what kind of collateral damage will be done when you resort to restructuring rather than imposing more austerity.

Those that will suffer under their government's austerity (and people will suffer, that point is elided by far too much) are underrepresented in government relative to the people who would suffer under Greek debt restructuring.

The important point I mean to make with this, is that political structure and market structure are mutually re-enforcing institutions that are shaped-at least in part-by political choices. I say this point is important, because in the process of lionizing the free market that political representatives often engage in, we lose sight of the actual complexities of markets themselves.

The basis for the appeal the "free market" has as a political slogan is rooted in an oversimplification of the idea. The internal logic is that market outcomes are must be by definition just, since the patterns of the market are inherently non-coercive. This leads all kinds of silly post hoc rationalizations for unseemly conduct because; if patterns of a free market only produces just outcomes, then the outcomes of the free market can only be just. (For an example of the genre, read Michael Levin's defense of Ebeneezer Scrooge.)

What this kind of simplistic exhalation of the market ignores is the very real dynamics of how political and cultural institutions influence the market itself (and how the markets influence those institutions). The government of Greece is much more willing to push for austerity in part because those that would suffer more under austerity are underrepresented relative to those who would suffer more under debt restructuring. To seek to understand these dynamics is the accept the fact that economic outcomes does not always occur in a vacuum of political influence, that markets are shaped many factors, and that the justice of those factors is not always clear.

How (Not) To Sell Your Candidacy

Ezra Klein critiques Tim Pawlenty for being uncompelling with the rationale for his presidential candidacy.

On one hand, I do see Klein's point. Candidates need to be salesmen, and that means they need to effectively market themselves to voters. Answers like:

"You know, I turned 50 last year, and I’m realizing I’m — if I’m not in the fourth quarter, I’m in the third quarter of the chronological clock."

are not particularly energizing, and Klein makes the appropriate point that Pawlenty is going to have to do better than “because I’m getting older” and “I didn’t want to start taking it easy yet.”

On the other hand! Over at The Atlantic, I'm throughly sympathetic to Conor Friedersdorf's point that Pawlenty's answer is refreshingly normal. Politicians are people too, and sometimes they don't have the best answer for everything.

In the same way that romantic comedies shape our expectations about relationships in unrealistic ways -- "I knew from the first time I saw him that we'd spend our lives together" -- the conventions of presidential elections cause us to imagine that there should be some compelling narrative version of what brought someone into the race.

I'd like to place the correct answer somewhere in between the two. Candidates should be honest about the intentions and motivations of their candidacy, but that the same time need to offer voters a vision or platform to get behind.

The best answer Pawlenty (or any candidate) could have given, would have been something along the lines of "I can't give you the exact moment I decided that I wanted to run for the presidency, but I can tell you that my decision was ultimately cemented by the vision and leadership I can offer the American people."

Good salesmanship doesn't always equal dishonesty, but bad salesmanship does make your honesty harder to swallow.

UPDATE: I think Daniel Larison gets to the underlying point of Klein's Pawlenty critique:

Pawlenty’s candidacy doesn’t have any obvious rationale. In fact, the former Minnesota governor has trouble coming up with a reason why he is running at all. He doesn’t unnerve any major constituency in the party in the way that Huntsman does and Daniels did, but he isn’t that closely identified with any of them. He inspires neither intense loyalty nor especially strong dislike. (Bold mine - JG)

It's not so much that Pawlenty's answer to Michael Crowley wasn't that compelling, but rather the rationale for Pawlenty's campaign as a whole is underwhelming. Klein's critique of Pawlenty's answer isn't valid on the answer itself, as it is on the overall motivations of his candidacy.