Thursday, December 5, 1996

FISCAL FITNESS: Campaign reform unlikely

A consensus is building that we are in dire need of major campaign finance reform. It was one issue that Bill Clinton, Bob Dole and Ross Perot all agreed on.

But don't get your hopes up. The likelihood of significant and effective campaign finance reform is remote at best. Furthermore, it may not be as desirable as you might think.

In the recent elections it's estimated that approximately $1 billion was spent on federal, state and local campaigns nationwide. Especially during the last few weeks of the campaign, the airwaves were inundated with political ads and mail boxes overflowed with flyers.

It's important to recognize why so much is spent on elections. The problem, essentially, is that over $2 trillion per year is at stake. That's how much local, state and federal governments spend per year.

Most elected offices have four-year terms. Over $8 trillion was at issue in the elections we just had. The amount spent was only about one-tenth of 1 percent of the amount of government expenditures at stake.

The total spent amounted to only about $10 per voter. Compare that with how much you'll pay in taxes over the next four years. The wonder is that so little is spent on elections.

Nevertheless, the general feeling is that money has become too big a factor in politics. We have a vision of all citizens commanding approximately equal power. All citizens, however, are not equally affected by government. It's unrealistic, and maybe unfair, to expect all citizens to be satisfied with some maximum amount of influence on elections.

Laws such as limitations on campaign contributions necessarily must rely mostly on voluntary compliance. For voluntary compliance to work, people have to think that the law makes sense and is fair. Virtually everyone obeys traffic lights because it's obvious what would happen if they did not.

The reasons for campaign finance limitations are far from being inherently logical or universally supported. For example, the current law prohibits individuals from contributing more than $1,000 per candidate.

That amount has been unchanged for more than 20 years. Could anyone explain how that amount was determined in the first place? Yankee ingenuity always figures out a way to overcome obstacles when there is a strong incentive to do so, especially when people believe the obstacle has no business being there in the first place.

The limit per individual is what spawned political action committees. PACs are a good example of "unintended consequences." In making laws, it's easier to aggravate a problem than to alleviate one.

Perhaps the greatest dilemma inherent in campaign finance reform is its conflict with our basic freedoms. How do you restrict a person's ability to spend money on something he believes in without restricting his political freedom? That conflict of goals is one of the specific reasons why the finance limitations fail to have general support.

One reason even more money isn't spent on elections is that there is not that much real difference between the major parties. Sure, the government has a big impact on your pocketbook, but most people are unconvinced it matters much if Republicans or Democrats are in power. The overriding objective of most political ads is to convince voters that there is a difference between the parties and between the candidates.

Many of the largest campaign contributors give money to both parties and both candidates. It's not so much that they have a strong opinion about who they want to win, it's more that they want to have a sympathetic ear from whomever the office holder is. Of course, when someone contributes to both parties, it's not a competitive advantage for either. The effect is mainly to raise the general noise level.

Contrary to what they say publicly, neither of the major parties is wildly enthusiastic about campaign finance reform. They've grown accustomed to the existing system and rules of the game. In fact, they are significant beneficiaries of them. Their hearts will not be in the crusade for reform.

Effective reform will take considerable wisdom and energy. Keeping the reform bandwagon moving will not be easy.


FISCAL FITNESS: Campaign reform unlikely - North Coast Journal December 1996

Ron Ross Ph.D. is a former economics professor and author of The Unbeatable Market. Ron resides in Arcata, California and is a founder of Premier Financial Group, a wealth management firm located in Eureka, California. He is a native of Tulsa, Oklahoma and can be reached at

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