Campaign Finance Regulations Eviscerate Free Speech

Posted on by Eric D. Dixon

I can’t let Nick’s post in favor of campaign finance reform pass without rebuttal. It can be easy to miss the connection between free speech and direct contributions to campaign efforts, so it’s understandable that many people don’t think of it as a free speech issue. That aside, the Bipartisan Campaign Reform Act (BCRA, aka McCain-Feingold) was one of the most blatantly unconstitutional pieces of legislation ever to pass the initial scrutiny of all three branches of government. State-based efforts to regulate campaign funding aren’t as wide-ranging, but are still almost universally terrible ideas.

Nick assures us that "The goal of campaign finance reform isn’t to destroy the 1st Amendment," which is undoubtedly true, but beside the point — destruction of the First Amendment is not the goal, it’s a side effect. Even though killing free speech isn’t the overt purpose of campaign finance reform, we can’t judge legislation solely on what it intends. The need to ferret out unintended consequences is one of the most important lessons of economics.

But really, the most obvious restrictions aren’t even unintended. The BCRA explicitly banned broadcast ads mentioning the name of a federal candidate from appearing within 60 days of a general election, or 30 days of a primary. This notwithstanding the fact that the importance of unrestricted political speech is a primary reason we have the First Amendment in the first place. And, as Jonathan Rauch pointed out, "Educating voters influences them, which is the whole point. ‘Electioneering’ is not distinguishable from other forms of political speech, even in principle."

The real driving force of the campaign finance reform movement has been politicians who want to be protected from competition. Make no mistake, campaign finance reform doesn’t level the playing field; it stacks the deck even further in favor of incumbents by restricting ordinary people from speaking out against those in power — those who already have plenty of exposure in the public eye on their own terms. Ryan Sager of the New York Sun has it exactly right: "Money has never been the issue. Cleansing our speech of impure thoughts about politicians is the real agenda."

Fans of campaign finance reform inevitably respond that "money isn’t speech," or that nobody is prevented from speaking, it’s just that groups are prevented from buying airtime. Semantic issues aside, I don’t know of anybody who ever claimed that money is speech. Money buys many things, and one of them is access to an audience. I’ve said it before, and I’ll say it again: Without the freedom to pursue such an audience, the freedom to speak is practically worthless. How much regulation will it take before advocates of campaign finance reform come to their senses and realize that the laws they favor promote real, actual government-mandated censorship? How about a law banning personal conversations that mention a political candidate within 60 days of an election? Maybe not: "You’re still free to speak. You can stand inside a locked closet and shout about whatever you want, to your heart’s content. Relax — the First Amendment is just fine."

For those who still think something needs to be done to "fix" political speech, there are solutions available that don’t happen to tear parts of the Constitution to shreds. Roger Pilon, director of the Cato Institute’s Center for Constitutional Studies, provides a guide for real reform (emphasis added):

[F]or some time now we have heard a chorus of calls in Congress and in the nation for campaign finance "reforms" that would almost certainly compromise political speech and hence the First Amendment. At a general level, I join that chorus, for there is something fundamentally wrong with the way political campaigns in America today are financed. But the reforms I would advocate would take us in a very different direction than that charted by most others in the chorus. Indeed, many of the problems that most reformers see in our present arrangements are the products of earlier reforms. Thus, if we are serious about addressing those problems we should look first to those earlier reforms. Far from needing further restrictions on political speech, we need fewer. Deregulation not only would be consistent with the Constitution but would solve the problems regulation brought into being. Here, as in so many other areas, the Founders had the better of it when they set us on a course of freedom rather than regulation. […]

There is a measure, however, that will withstand judicial scrutiny, the aptly-named "Doolittle bill," introduced in the 105th Congress as H.R. 965, the "Citizen Legislature and Political Freedom Act," sponsored by Rep. John Doolittle and co-sponsored by 70 other members of the House. In essence, that bill would remove the campaign contribution limits now in place and require instead that candidates and parties promptly report their financial transactions to the Federal Election Commission for disclosure to the public. The bill would, in short, deregulate the process and open it up to the public. Its simplicity is its virtue.

I’ve already spent much more time on this blog entry than I should have, so I’ll stop here for now, and let my colleague David Stokes tell everybody tomorrow why public funding of elections is one of the worst ideas under the sun.

Bit by Bit

Posted on by Nicholas Loyal

The Post-Dispatch ran an article this morning about a pair of bills recently introduced in the General Assembly that would seek to drastically change Missouri’s policies on political contributions for state contests. The first, introduced by Senate Majority Leader Charlie Shields (R–St. Joseph) seeks to eliminate the contribution limits established by Missouri voters after a 1994 petition. The second, brought by Sen. Jeff Smith (D–St. Louis) takes a more populist view by instead promoting a system of public funding revolving around a number of small donations.

Shield’s bill is the latest in a decade-long back-and-forth debate between supporters and opponents of campaign finance limits that has already seen a U.S. Supreme Court decision (that helped pave the way for a certain piece of federal legislation that I’m rather fond of), and a Missouri Supreme Court decision. Removing limits, supporters claim, will actually increase transparency by eliminating the need for wealthy donors to shuffle money through PACs. This argument, though, has been echoed for years. Much more exciting, in this author’s opinion, is Sen. Smith’s idea:

"[Smith] wants to ‘draw a contrast’ between special interest-funded campaigns
and his model, where candidates would get public funding if they
garnered a certain number of $5 donations."

The goal of campaign finance reform isn’t to destroy the 1st Amendment (although this may be disputed by some of my colleagues). Instead, limits exist in order to ensure that the voices of a few with extraordinary means don’t drown out the words of others who can’t (financially) shout as loud. Smith’s bill hopes to correct this disparity by giving those who have proven their support through small donations the public financing they need to compete with candidates receiving the backing of a few massive donors. Although public financing has often been disputed for its ineffectiveness in campaigns, I think the populist nature of Smith’s bill does more to promote the idea of free speech than the removal of any limits ever could.

It’s a good idea. It’s a shame even he doesn’t think it will pass.

Beyond Ivory-Tower Dome: Two Men Enter, One Man Leaves

Posted on by Justin Hauke

I agree with Dave’s post about the lunacy of the "Textbook Transparency Act." There are obviously additional options out there for the savvy consumer. And I think student groups should focus on educating students about those options, rather than turning to the government.

But one thing I think Dave overlooks is that the college textbook market encourages collusion between the university and professors. For example, call me a cynic, but I’m inclined to believe that many professors choose textbooks based on the book’s associated royalties, rather than perceived academic quality (in economics parlance, it’s a principle/agent problem; see, I can use $2 words, too). I can’t count the number of times that my “required textbooks” have been authored, coauthored, edited, or refereed by the professor teaching the course. Either that, or the author is the professor’s dissertation advisor, faculty co-member, or otherwise within six degrees of separation from Kevin Bacon.

In fact, the one piece of the bill Dave supported was the part I was most wary about — financial aid for textbooks. That’s like ringing the dinner bell, in my opinion. You mean professors can rack up royalties by passing the bill through financial aid and onto the taxpayers subsidizing higher education? Even the Marxists would enjoy that kind of profit-seeking.

I should also mention the fact that college bookstores only sell the most recent editions of required textbooks. These editions are generally identical to previous editions, but sell at a premium (and, of course, the secondary market doesn’t include royalties … I wonder why colleges only sell new editions …). I actually think including a revision history would be a good idea, from a consumer-information perspective. You’d then know whether the premium price for the most recent edition was worth the cost. Of course, requiring this disclosure would also drive up textbook costs, so it’s kind of a silly provision (and it probably should be handled by the student groups anyway … or just go online, people, geez …).

Anyway, I agree that the bill is a little misguided. But I would not consider the college textbook market to be a true competitive market, either. Kind of like OPEC, but with actual pricing power.

Texas Thinks Outside the Lane on Transportation Planning

Posted on by David Stokes

Texas is attempting to address its long-term transportation planning needs in a fairly radical way. "Radical" often has a negative connotation, but I mean it here in a good way — sort of like how our Founding Fathers were radicals, which they were. The New York Times Sunday edition had a major article on Texas and its proposed use of public-private partnerhips to build new highways during the next few decades.

From the article, here are the basics of the plan:

The plan envisions a 4,000-mile network of new toll roads, with car and truck lanes, rail lines, and pipeline and utilities zones, to bypass congested cities and speed freight to and from Mexico.

The reasons behind the new ideas are also pretty clear:

Critics abound, but experts say Texas is addressing a problem certain to worsen nationally in coming decades: the price of gasoline may be rising but revenue from gasoline taxes is not, and with the rise of more fuel-efficient vehicles, less money is being raised for highway projects, even as traffic grows.

So transportation planners are increasingly looking to the private sector to put up construction money for toll roads in return for revenue from motorists.

“We’re relying on 1993 income for 2008 output,” said Robert Harrison, deputy director of the Center for Transportation Research at the University of Texas in Austin. “It’s unsustainable.”

The obvious question here is whether Missouri should consider similar ideas. Please note that Texas may be thinking bigger than other states, but California, Virginia, Florida, and other states are embracing public-private partnerships for transportation projects, too. In my opinion, Missouri should give very strong consideration to these ideas — although on a smaller scale — for the near future, at least.

For one thing, Missouri is not growing nearly as fast as the states listed above, so our needs are not as great as Texas’. However, we do have major transportation needs that we may be best able to address through PPPs. The success of the only toll remaining in our state, at the Lake Ozark bridge, demonstrates the opportunities available in PPPs. (I should be clear that the Lake Ozark bridge was not built as a PPP, but as it’s a toll it is comparable.)

The Show-Me Institute, along with the Reason Foundation, will be releasing a major study on this topic around the end of this month. Much more to come from us on this issue then!

What Are They Teaching Kids (and Legislators) These Days?

Posted on by Dave Roland

It appears that some students over at the University of Missouri?Columbia still have a lot to learn.  Mizzou’s student newspaper, the Maneater, is reporting (article spotted via Combest) that the Missouri Students Association and the Associated Students of the University of Missouri, concerned by the high costs of college textbooks, are pushing the General Assembly for a "Textbook Transparency Act."  The bill apparently has a head of steam behind it, because 40 representatives have signed on as co-sponsors.

The bill has three elements: one good, and two that are outright ridiculous. The good point is that it would allow students to use excess financial aid toward the purchase of textbooks, which makes plenty of sense. But the bill would also require textbook publishers and bookstores to inform professors and students (respectively) about the books’ pricing, the history of textbook revisions, and whether the books are available in other formats, as well as requiring campus bookstores to offer textbooks and their supplementary materials as
separate items — even if they would normally be sold in a bundle.

These latter two provisions are senseless for at least three reasons. First, all of this information is already available to anyone with the inclination to look it up online. Second, they imply that professors should choose their texts with more concern for the cost of the books than for the quality and currency of the material — even price-conscious students should recognize that part of what distinguishes the value of a college course is the wisdom of a professor’s selection of reading material, not just her skill as a lecturer or instructor! And finally, these requirements would force the publishers and bookstores to take on additional costs in order to generate and communicate this information to "prospective purchasers." Any additional costs for the publishers will, of necessity, end up being passed on to student purchasers in the form of higher prices!

As the veteran of eight years of higher education, I can sympathize with students suffering from textbook sticker shock. But there are many solutions out there that would provide much better results for them as consumers. For example, instead of purchasing a textbook from the bookstore, look to an online bookseller such as Amazon.com or Half.com. While local bookstores can offer immediate ownership of the texts, online sellers can usually offer better prices because of the volume in which they deal, and it only takes a few days for the books to arrive. Even better, online vendors allow non-affiliated sellers to offer their own used and new books, usually at a substantially lower price than one could find through a corporation. Another trick for the cash-strapped student is to try to locate textbooks in either the university’s library or another local library.

The bottom line here is that the information that these students are trying to highlight is already available, readily and easily, to any student wishing to look for it — as are any number of lower-cost options for purchasing textbooks. The students will actually be harming their cause if they are able successfully to enlist the legislature to impose additional burdens on publishers and bookstores, because it will only drive up costs and, therefore, prices.  A far better use of these students’ time and energy would be to educate their fellow students about wiser ways of securing the books required for their classes.

Learning Languages

Posted on by Sarah Brodsky

Schoolhouse Talk links to a story in the Columbia Missourian about 6th-grade public school students learning Chinese. The kids learned Chinese names and greetings, and ate Chinese food as part of a 12-week program:

“Our goal is to promote understanding between China and the United States," Wiedmeyer said. "Language is an important part of it. Currently Chinese is not included. So we would like to make Chinese language a regular part of public school curriculum in Columbia.”

Most public schools stick to a few languages, which usually include French, Spanish, and German. Broadening course offerings to include Chinese is a great idea. However, nobody can learn a foreign language in three months. This program is probably so limited because it’s a new idea, and traditional public schools are notoriously cautious about innovation. Compare the 12-week Chinese program with the French curriculum at this Kansas City charter school, which starts immersion in kindergarten. Charter schools have more freedom than traditional public schools to experiment and specialize, so they can start language instruction earlier. And lest you think charters just focus on the same handful of languages that have always been taught in high school, take a look at this Chinese language charter school in Massachusetts, where 75 percent of the 1st-grade curriculum is taught in Chinese. Here’s another Chinese-immersion charter school, this one in Minnesota. Other charter schools teach Arabic, Japanese, and Greek.

Exposing kids to Chinese is a nice idea, but if they really want to gain fluency, it would be wise to start a charter school around the theme.

“Other People’s Money” – StL-Style

Posted on by Justin Hauke

On Wednesday, Macy’s Department Stores announced that it will cut 850 jobs and close its Midwest regional headquarters in St. Louis.

The Post-Dispatch opined on the subject in this morning’s paper. And while the editorial has some merit (a discussion of the need for a well-educated work force, public safety, etc.), it slips into xenocentric regional pride:

Whatever the reason, the loss of a corporate headquarters does hurt the region, and the hurt goes beyond the loss of jobs. There’s a loss of regional pride and bragging rights. Local development officials have a tougher job in recruiting new business for St. Louis. […]

Cities may score an occasional coup by luring a factory or headquarters from out of town. But most regional economic success is home-grown. It means spawning small companies and helping them grow into large ones.

No, no, no. Wrong. Cities shouldn’t promote “home-grown” industries for the sole purpose of familiarity and pride (I mean, look at Detroit). It’s the city’s responsibility to promote a healthy business environment, one that’s fair and competitive. We don’t live in a compartmentalized world of “regional economic success.” Think of the increases in standards of living during the past 50 years. How lucky are the citizens of St. Louis that they aren’t forced to rely solely on their own regional production? The mobility of capital and labor has made St. Louis a much more vibrant and economically healthy place than it ever was before. The increases in material wealth, broad home ownership, the availability of cheap food, clothing, and consumer electronics: Were those things obtained from erecting tall city walls to keep the rest of the world out? Or did the increase in competition from across the world bring prosperity to all?

What ever happened to the fur industry and river shipping? The railroad and meat packing? The buggy builders and the blacksmiths? Is St. Louis worse off because those jobs are now gone? What about the pride of those workers and the city’s roots?

Industries are born and industries die. Jobs are lost and jobs are created. That’s part of growth. The St. Louis region netted 25,000 new jobs last year, a 2 percent gain. Those jobs were created because capital was allocated to the areas where it was most productive, not because bureaucrats squandered it into industries slowly bleeding to death on taxpayer subsidies.

Do I sympathize with those who lost their jobs? Of course, we all should. But how lucky are they that they live in a world where competition ensures that their family’s next grocery bill will be only $100 instead of $400? They live in a world that encourages growth — a world which will offer them new jobs and opportunities.

In summary, I end with a quote from the classic 1991 film “Other People’s Money”:

“This company is dead. I didn’t kill it. Don’t blame me. It was dead when I got here. […] Let’s have the intelligence, let’s have the decency to sign the death certificate, collect the insurance, and invest in something with a future. ‘Ah, but we can’t,’ goes the prayer. ‘We can’t because we have responsibility, a responsibility to our employees, to our community. What will happen to them?’ I got two words for that: Who cares? Care about them? Why? They didn’t care about you. They sucked you dry. You have no responsibility to them. Take the money. Invest it somewhere else. Maybe, maybe you’ll get lucky and it’ll be used productively. And if it is, you’ll create new jobs and provide a service for the economy and, God forbid, even make a few bucks for yourselves.”

Here We Go Again

Posted on by Sarah Brodsky

Some people scoffed when I complained last year that encouraging schoolchildren to lobby will lead to a lot of frivolous legislation. So I wonder what they think about this:

In their quest to designate the ice cream cone as Missouri’s official desert [sic], a group of 19 St. Louis-area students made their case before a Senate committee Wednesday. […]

Besides the dairy association, the Missouri Restaurant Association, the Division of Tourism and the owner of several Cold Stone ice cream shops also spoke in favor of the measure.

Back in the days when kids’ bills were limited to animals, nobody in particular stood to benefit. After all, the box turtles didn’t care. Now that kids have broadened their efforts, real industries are looking to benefit. Some rent-seeking is an inevitable part of politics, but the restaurant and tourim associations should pay full-grown professionals to do their lobbying work.

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