Incumbency and Democratic Spending

Dennis Mueller’s discussion of campaign contributions and Grier’s empirical study of the effectiveness of spending by incumbents and challengers is bolstered in a recent New York Times article by Michael Luo and Griff Palmer. The article discusses directly a divide between spending on Democratic campaigns and on Republican ones on current campaigns, but provides real world evidence for Grier’s 1989 findings.

Firstly, one of the Congressional races discussed is that of New York’s 20^th District. There, the sitting Congressman is Scott Murphy; the Republican Chris Gibson is challenging the seat. The money spent collectively by Gibson and his supporters on his campaign totals $1.1 million, whereas the figure for Murphy is $1.7 million. This is a great illustration of Grier’s model, which predicts that the each marginal dollar spent by an incumbent will bring fewer votes than each marginal dollar spent by a challenger – campaign contributions have diminishing returns beyond a certain inflection point. That inflection point roughly corresponds to the difference between incumbents and challengers and is a reason that Murphy’s campaign is costing more.

Further, the article puts forth total spending figures for democrats and republicans on the current midterm campaigns. Democratic candidates in races that the article looks at have spent a total of $119 million compared to a Republican total of $79 million. This is a reflection of the greater number of incumbent Democrats. Luo and Palmer mention this correlation but do not concern themselves with its economic implications.

The "Kick Them All Out" Project

Lately I've been seeing a lot of bumper stickers which carry a simple message: "Fire Congress!" Given the fervor of advertising on the Congressional races, I thought I would look at what these people are actually about. For so many people to stick these on their cars, the Kick Them All Out Project must be a serious group. Yet, upon reading their main goals in the FAQ, it is clear they need to get some facts straight. I specifically take issue with their perception of the relationship between special interest groups and congressmen.

In order to stop these people, we must understand how they accomplished the hostile takeover of our government in the beginning. First, they took control of Congress by making it legal for their corporations to interfere. They accomplished this by planting a loophole in the Constitution. Then the loophole was exploited to award "human rights protections" for artificial corporate entities, which gave corporations the right to directly interfere with government and elections.

Special interest groups generally are playing a big part in government and elections, but not because "human rights protections" have been awarded them, whatever that means. Congressmen run frequently and need funds to run their campaigns; it usually takes much more money than they have to run one. Contributions come from people who support them and want to see them elected. According to the studies made in Mueller's Public Choice III, PACs contribute for the same reasons. In fact, in 20.3.2 on page 487, he says, "the results from most of these studies seem to imply that contributors are not merely trying to increase the election probabilities of candidates whom they favor, but are trying to influence the votes that they will cast on specific issues, or to obtain specific political 'favors.'" Yes, corporations themselves can't stand in the voting line with everyone else, but they can affect the system by giving candidates the funds for advertising, flyers, etc., they need without asserting things like "human rights protections."

If the group was directly criticizing the fact that PACs are allowed to contribute along with the individual citizen, then their opposition would be valid. However, this group has completely missed the mark; I don't think taking away human rights protections from corporations will work. These people need serious schooling in Public Choice.

The long lasting externalities of Porn

In this article, the case is made by Chris Dillow (in support of Larry Flint’s $5 Billion government bailout request for the porn industry) that porn has many positive externalities on society. He calls it a “strategic industry, the driving force behind many technologies”. He furthers this idea by asserting that without Internet porn, computers wouldn’t have been as successfully sold. Porn also creates skilled workers for other industries (actors and cameramen that switch from the porn industry to other industries). But mainly,

“sex has been a major source of comfort during the recession. Battered bankers and finance sector professionals have been seeking solace from the turmoil, by relying on the sex industry (apparently more for comfort that for any actual sex).”

If we happen to believe this: that porn has a net positive externality on society, and because government doesn’t support this industry (at least not yet), this good will be undersupplied by the market. And thus government should not only positively respond to Larry Flint’s request, but should seriously consider secularly subsidizing the industry.

I personally do not believe that porn has a net positive externality on society because of how overwhelming the negative externalities are. As a lot of feminist groups claim, porn has dramatically and negatively altered the way women and their bodies are viewed in society. What’s interesting about this case is that even if the government imposes a tax (which was discussed in congress several times) to internalize these externalities, the harm already inflicted might remain unchanged, and in that case the internalization of this cost on society might fail. Which is practically, a good reason to oppose the imposition of a tax on porn (because marginal costs on society are basically zero at this point) and also to resume the consumption of porn if it was previously abandoned because of the guilt felt for contributing to such a societal cost.

N.B: Do not read the comments left bellow the article that I attached, and don't click on any of the links in those comments.