S6E3: The Money Problem

Foreign. This is Larry Lessig. I was part of a panel discussion about super PACs earlier this summer. And the great Caitlin Lacasse, who ran the campaign in Maine, question two, that limited spending by foreign entities that involved Maine politics, won that by 86% in Maine and now works for American Promise, was presenting the argument of American Promise. Now, American Promise is one of my favorite organizations in the democracy reform movement. They've been fighting to deal with the problem created by super PAC since the birth of super PAC shortly after Citizens United was decided. And they've adopted a strategy which is an extremely hopeful, edifying, healthy strategy of rallying ordinary Americans to support an amendment to the Constitution. And they haven't done it, done this at the kind of 50,000 foot level. They've been organizing in state by state to build movement of regular citizens to get their politicians to demand an amendment to the Constitution to address the problem of money in politics. And I support their work overwhelmingly. And even if we succeed in ending Super PACs, I support their work overwhelmingly because we need a democracy amendment to the United States Constitution to deal with not just the money and politics problem, but everything else that has been added to our jurisprudence to weaken the effectiveness and responsiveness of our democracy. Rick Hazen, legal scholar, maybe the dean of election law, has a wonderful book about the amendment he would call for. I think it doesn't go far enough. I would support its changes as well as the changes that American Promise was promoting. But in the first two slides, Caitlin presents what I think is an important contrast that should be the focus of our attention in understanding just what's wrong with politics in America today. The first slide describes the out of control election spending, which she describes as continuing to climb. And it's a dramatic graph. In 2016, the total spending of congressional spending and presidential spending was about $6.5 billion. In 2020, it was $14 billion. And it will increase even more today in this election, 2024. But then in the second slide, she says the elite few have too much power. And she says just 1% of super PAC donors accounted for 93.1% of super PAC contributions. Okay, that's the point that underlines the corruption of Super PACs in our political system. I don't actually think, I believe that the money alone is the problem. I mean, Colgate in 2022 spent about $2 billion advertising its soap products across the across the world, and that's 50% more than super PAC spending in 2022. So should we be spending more advertising soap than we are advertising on political candidates, I don't know. I don't know how we would know the answer to that question. So I'm not sure it's the money alone. And certainly I don't like the money when it's being used to promote hate and separation and polarization. So if we need to eliminate the money to eliminate that, I get that argument. But my point is I don't know that it's the money alone. I think it's the concentration in the donors that we need to worry about. Because look, if you raised a billion dollars in small contributions, that says something about the Democratic support for your campaign. A billion dollars in small contributions means you've got hundreds of thousands, maybe millions of people supporting you. But if you raise a billion dollars for one or two people, from one or two people, that doesn't mean you have any Democratic support for your ideas or your position. It just means you've got rich persons support. And so the problem we should think about when we're thinking about super PACs is not necessarily the money, it's the concentration. And indeed it's the concentration when we recognize an important dynamic about how political money works. A great paper published in the early, I think it's 2010 by Marco Shamon and Ethan Kaplan called the Iceberg theory of Campaign Contributions. And the point that they make in that paper is that it's not actually through spending that you have political effect. It's also the threat of spending that has political effect. Because if you're a campaign and you know that somebody's going to spend, somebody spent $10,000 against you, you know you've got to match that. And so that's a burden on you. You've got to find $10,000 to spend in the other way, maybe even more, depending on the nature of the, of the, of the attack. But you are also afraid, based on the credible threat, that they're going to spend that money against you. So many people point out that business PACs often spend money on both Republicans and Democrats. But this helps explain why they do that. They do that because it makes it credible for them to say that if you don't support us in the following way, we might have to spend money against you. And if you know that they spend money favoring Republicans or favoring Democrats, you know that they could spend money against you. So the point is, the threat alone has its effect. The threat alone has its effect. Even without spending a dollar, if you're credible that you could spend that dollar, the threat alone is enough. And that points to what I think of as the most dramatic, maybe most consequential example of how super PACs have had an effect on American politics. And it happened at the very beginning of the history of Super PACs. Most people today don't remember this because most people forget or they're not focused or they were not around when this was true. But it was once the case that the Republican party was deeply engaged in the question, how do we address the threats of climate change? John McCain in 2008 had a climate change proposal that he thought was better than Barack Obama's. I don't know whether it was better or not, but the point is it was credible as a proposal to address climate change. Barack Obama had a competing one. He failed to get that passed. But the point was, in 2008, both parties were invested in finding a solution to the problem of climate change. Then in 2010, the Koch brothers made it known that any Republican who even acknowledged the truth about climate change would find themselves primaried, meaning find themselves in challenged in their primary by someone who was more extreme, who did not believe that there was even anything to worry about about climate change. When they made that credible threat in 2010, that changed the Republican Party because after one or two examples of a climate change aware Republican being taken out by a more extreme Republican who denied climate change, the lesson was learned by Republicans generally. And almost overnight, one political party was taken out of the debate about climate change. More consequentially, one political party would effectively veto any action the federal government would take about climate change. Not because millions of Republicans had decided that John McCain was wrong, not because millions of Republicans had done their work and decided climate change was not real, but because two rich Americans, the Koch brothers, decided they would use their wealth to change the political debate. Those two characters, who themselves benefited from the lack of regulation of climate because they had many industries that would have been affected by by effective climate regulation. Those two rich people had the ability because of super PACs, to change the debate about maybe the most important existential question the American political system had to address. That is the problem with super PACs. You know, when they set up our republic, which the right wing's right to say we don't have a democracy, we have a republic. But the right wing is oblivious because they don't recognize that by republic the framers meant a representative democracy. So when they set up our republic, our representative democracy, what Madison promised us was that we would have a representative democracy that was, quote, dependent on the people of alone. And to be clear, in Federalist 57, he went on to explain, by the people, he meant, quote, not the rich more than the poor. So we were supposed to have a representative democracy that would be dependent upon not the rich more than the poor. But the system we have right now is a system where candidates only get to be candidates who could win if they get the money of the rich more than the poor. And not just money given to them directly, but money given to them indirectly through these super PACs. So we have evolved a system that is the exact opposite of what Madison promised us. A system which is dependent on the rich more than the poor. And in that system, the interest of the rich, the very few tiny. Who are willing to spend their money in the way the Koch brothers did in 2010, their interests control what interests our government can take up. And not just with climate change. With every issue that you think of as important and every issue you should think of as important. Health care, taxes, military spending, ungodly amounts of money we spend on military because the military is so affected by the interests of the defense contractors. The wages that we allow even the poorest or middle class in America to continue to suffer under. We haven't had a real increase in the minimum wage in 50 years. When you account for inflation, none of it. Indeed. If I had the ability to show you a graph, I wish I could right at this point. But if you don't know this, you need to look this up. Here's the thing that is so frustrating about the last 50 years of America politics in American economy. If you look at the graph that shows the rise in wages related to the rise in productivity. So businesses are getting more productive. And as they're getting more productive from around the middle of the night, beginning of the 1950s, through the middle of the 1970s, there's an almost perfect correlation. As productivity goes up, wages go up. And then beginning in the 1970s, and more dramatically after Reagan becomes president, those two lines separate. And productivity continues to climb, meaning profits to corporations continue to grow, but wages don't climb. The average worker in America has not had a real increase in his or her wages in 50 years. 50 years. Because all of that wealth that has been produced by this increased productivity has gone to capital, to corporations, to the stockholders, to the executives, to the venture, whatever. We have seen a dramatic climb in inequality in America because of that change. And then you say, well, maybe that change was just the free market doing what the free market does, deciding who's worth what, blah, blah, blah. No, that's bullshit. That's bullshit. The reason that change happened was because of a series of government decisions about how wealth would be taxed and accounted. And those government decisions are what began to drive this extraordinary gap. As well as government decisions that weaken the power of unions to demand part of the gain that came from this increasing productivity. This extraordinary period of the 1950s to the 1970s, the happy story of middle class America. Everybody's boat rises as the tide rises. All that story was a story that was true because countervailing forces made it so the market had to reward those who contributed to their profit, namely workers. But since the 1970s, that has no longer been true. So you've not had a pay raise in 50 years. If you're an average worker, 50 years, your whole life working, you've not seen a pay raise because of government policy. So health care taxes, military spending, wages, support for unions taxes, the tax system itself. This is the part that's most outrageous to me. We've got a tax system where the wealthiest evade taxes. I don't mean they're not paying as much as I would like to tax them. I'm not saying that there ought to be. Like Eisenhower had a 90% tax for the top bracket. That's not my point. Under the existing rule rules, they're not paying their fair share rules which give them the lowest effective tax rate that we've ever had. They're effectively taxed at a rate that's lower than middle class taxpayers are supposed to pay. But forget that. The point is, whatever the rules are, they're not abiding by those rules. Okay? They're not paying their taxes according to what the rules say they ought to be paying. So the IRS had the genius idea. Let's increase the ability for us to make sure that they pay what they owe. They pay what the law says they must owe. So they set up this program to attack these high. Attack, That's a stupid word here. I don't mean attack. I mean just make sure that these taxpayers are paying what they owe. I pay what I owe. I'm sure that my assistant at the law school pays what she owes. I know that the workers throughout Harvard pay what they owe. We all pay it because it's taken directly out of our salary when we get our salary. So the point is, do these super rich people pay what they owe? IRS set up a special program to do it. They collected a billion dollars in revenue from people who had just not paid what they owed. Okay? The Republican platform for this election includes a provision, a promise, and the promise. And this is doubled down in the 2025 plan, that they're going to scrap the ability of the IRS to collect taxes from the wealthiest, taxes that they owe. They're going to scrap it so that they can get away with cheating on their taxes. Now, the idea that anybody would say that out loud is kind of extraordinary. So you say, why are they doing this? Well, they're doing it for one reason. Those rich people know that it's cheaper to buy politicians than to pay their taxes. It's cheaper to buy the politicians, to get the politicians to remove the IRS enforcement provisions that makes it so they will pay their taxes than it is for them to pay their taxes. So they do the rational thing from the perspective of maximizing their wealth, which is to buy the politicians so that they don't have to pay their taxes. And now we have a party that's arguing that we should remove the enforcement mechanism so that these people don't have to pay their taxes, taxes which the law says they owe. Now, I'm happy to say we ought to have a law reformed in all sorts of ways, but if you've got a law that says you owe certain money in taxes, you damn well better pay it. And the idea you would argue that we should not enforce the law against a certain class of people because they give money to political campaigns is corruption personified. Okay, My point is all of these examples, health care taxes, military spending, wages, support for unions, taxes for the wealthiest. All of these examples are examples because of the corrupting influence of money and especially super PACs. And this is exacerbated by all the things we discussed in season five of this podcast. Let's just take one. The Senate filibuster. As I said in explaining the filibuster in the last season, you're confused if you think the thing we refer to as the filibuster today has anything to do with the filibuster that lived in the 20th century and was basically born in some form in the 19th century in America. The filibuster for most of the history of the United States was a device through which a minority in the Senate could slow the consideration and passage of a bill. If they did something on the Senate floor, namely stand up and speak, and if they didn't hold the floor, if they didn't want to speak, then the Senate could get on with their business and consider and pass or not, any particular legislation. Strom Thurmond, famous Senator Dixiecrat, meaning he was a Democrat originally who did not support civil rights and when the Democratic Party began to support civil rights, he therefore created a separate party, the Dixie Cat Party. Dixiecrat Party. Senator Strom Thurmond in the late 1950s spoke on the Senate floor for 26 hours because he was trying to filibuster the 1957 Civil Rights act, which was the first of the significant civil rights acts that then were passed more aggressively in the 1960s. 26 hours, that's hard work. And though I would say if you look at all the examples of the filibuster so deployed across the history of America that none would defend the things that they actually succeeded in achieving, namely slowing the consideration of civil rights that blocked the passage of anti lynching laws for all of the 20th century until the Civil Rights Acts of the 1960s were eventually passed, nobody could look at the substance of what the filibuster did and say, yeah, this is good that we had this device to achieve these objectives. There are a couple exceptions, but not many. Nonetheless, the point is that system forced somebody to do some work. Then Barack Obama was elected President and Mitch McConnell decided his number one objective was to make sure that Barack Obama served only one term. That's not my words. Those are his. And one of the things he did was to change the norms around the filibuster. So whereas the filibuster before could only be invoked and deployed if somebody was willing to work hard for it, and most senators realized they should not be doing this except for the things that were most important for them. Mitch McConnell changed the exception into the norm. And he. And he changed the rule so that nobody had to do anything. I want to be precise. He didn't change the rule. The rule had been changed before, but the norms still meant that it didn't happen often. Mitch McConnell changed the norm. And the norm now was the default was if any senator just texted the majority leader and said, I want to invoke a filibuster. Minority leader, majority leader, doesn't matter. Any leader could invoke a filibuster and change the rules that would govern whether something could pass the Senate from a simple majority of those voting. So, you know, a quorum is just a majority in the Senate. A majority of a quorum could be as low as 26 votes to get something passed Senate to change that rule from as low as 26 votes to a minimum of 60 votes to even be allowed to vote on a provision. 60 votes. 60 senators actually on the floor casting their vote to allow a provision to be considered. Okay, think what 60 votes means. If it takes 60 votes. That means 41 senators have the power to block any bill from even being voted on in the United States Senate, except for nominations and budget reconciliation bills. 41 senators. So take the 21 smallest states that supported Donald Trump in 2016 by at least 10 points. So these are at minimum 10 point Republican states, the 21 smallest of them. Those 21 smallest states would give you 42 votes in the United States Senate. Those 42 votes in the United States Senate have the power to block anything except budget reconciliations and certain nominations. Okay, those 42 votes would represent 21% of the American public. So 21% of the American public have the effective opportunity to block legislation except for nominations and budget reconciliations in the United States Congress. You know, and this is not like a veto of the President that can be overridden. If the Senate doesn't pass something, it doesn't pass. So we've gone from a majoritarian system. The reason we got rid of the Articles of Confederation and passed the Constitution was that the articles in Confederation had super majority requirements for ordinary legislation. We got rid of that system when we adopted a majority system where a majority is supposed to be able to pass a law. But Mitch McConnell shifted it into a presumptively minoritarian system where a super majority, maybe as much as a majority representing 80% of America, is necessary to pass something into law. Okay, now the point of that rant is just to get you to think about how much money affects this system. I don't mean how much money, but how much money affects this system. Because if you've only got to assure that 41 senators are supporting something on the margin, it's not going to cost a lot to block anything in the United States Congress. So a lot of things get blocked because either the money has been spent or the money has been threatened to be spent. That's the iceberg theory again. Those senators know what they can do and what they can't do. They become good at understanding how what they do will affect their ability to raise money or affect the super PACs that are interested in supporting or opposing them. So the money gets amplified inside the system. We have a minoritarian system, a minoritarian system that amplifies the power of money. Because money, especially the money of super PACs, money that a tiny, tiny fraction of America controls, that money blocks our government from taking up and addressing the most important issues that our government might need to address. Okay, so this is our so called democracy that the tiniest fraction of the 1%. Geez, the tiniest fraction of the 0.001% are given the power, the capacity to veto anything they don't want our government to do. Tiny, tiny fraction of the wealthiest in our society, through the mechanism of super PACs, have the power to veto anything they don't want our democracy to do. I know this is the age of Newspeak, and this is going to sound a little old fashioned, but that's not representative democracy. That's not, in the words of our framers, a republic. That's a system that has been corrupted, not corrupted by the amount of money in politics, corrupted by the fact that a tiny, tiny few have the power to leverage their money through the dependencies it creates, to veto at least, and maybe to force support for the things they want government to do and not do. Super PAC spending is the most consequential and polarizing spending in American politics today. It is the worst of money in politics today. And though this used to be the issue every democracy reformer spoke about, though this used to be the issue that triggered the creation of great new organizations like Free Speech for People and Citizens United represent us. Increasingly, this issue is invisible. All right? Now it's invisible for two different reasons. One reason is healthy, one reason is ugly. The reason it's healthy is just reality. If you think the only way you're going to address the corrupting influence of super PACs is by amending the Constitution, Then I get why you work on other problems. I mean, I don't think you should. I think you should support American promise. I think you should do everything you can to amend the Constitution. If that's the only way to address this corrupting influence of money in politics, or if you think the only way we're going to address the corrupting influence of money in politics is to reverse Citizens United and you can count to five on the Supreme Court and realize it's going to take a lot of changes on the Supreme Court before we get five that are going to reverse Citizens United. I get why you're going to spend your time doing something else. Like, you know, we only get one life, and it's not actually that long. And so in the short life that we get, I get why it makes sense to spend your time working on other issues than the issue of money and politics. But that's one of the most important reasons why I'm doing what I'm doing in this podcast and talking about question one in Maine. Because you might not believe the Supreme Court's going to do the right thing. You might not think it's going to follow its own precedent. You might think there's nothing they could do which is good and true and right. But you got to recognize that there's at least a real shot that they'll do what is true and right given their own jurisprudence. And if you believe that, then you ought to believe that there is a shot here, a shot we need to take to address the most consequential and polarizing speech in America today. Not because we're against speech, but because we're against corruption. Because a system that creates the dependence that this system has created is a corrupt system. It's not what Madison promised, a representative democracy dependent on the people alone, not the rich more than the poor. It is a system dependent on the rich first that's happy to help the poor as long as the rich are okay with it. Okay, that's reason one. Second, reason is more ugly. One of the greatest books of our time by a non jirid Herrades tells the general story about how policy advocates in America have changed the policies they advocate to assure that those policies not just advance their substantive objective, but also advance the interest of the wealthiest. That in a world where we have to plead with the rich to get the resources to do policy work, the strategy has become pick the policies or the strategies that make a win win argument easy. So we say to the wealthiest, you can help the poor and you don't have to worry this will hurt you at all. Win, win. And in that fight, there are certain topics just that just cannot be addressed in that fight. Certain reforms are just pushed off the table. Okay. Against the background of Anand's story, it becomes easier to understand perhaps why democracy reform in America has shifted away from a focus on money and politics to the focus on the many other issues that we recognize we need to address as well. Ranked choice, voting, final five primaries, gerrymandering. These are all important and difficult problems of democracy. The fight for the John Lewis Freedom to Vote act, that was an important fight too. To end the suppression of votes on the basis of race or politics, whatever, those are important fights. But increasingly I think that when you ask why aren't organizations that were born to fight the corrupting influence of money fighting the corrupting influence of money might be because it's hopeless or because they realize their funders aren't interested in that fight anymore. Okay, it's that anxious thought that will come back at the center of episode four of this podcast. Stay tuned. This is Larry Lessig. Thanks so much for listening. These podcasts are produced by Equal Citizens. This season, we're producing them to support the work of the main citizens to end super PACs, the ballot question committee that is promoting question one in Maine on the November ballot. That question will address whether super PACs can be regulated. The ballot question specifically limits contributions to committees that spend money independently of political candidates to just $5,000. That will trigger the fight that will get to the Supreme Court and we think give the court a chance to do what it's not had the chance to do so far, namely address the question of whether money in politics in America must be dominated by super PACs. You should support that committee. You can find them@citizenstoendsuperpacts.org if you're in Maine, please support them by volunteering, by turning out the vote, by doing whatever you can to spread the word why this fight is so important. If you're outside of Maine, you can also support them by your contributions. 10, 20, $30, whatever it takes to give them the resources they need to make sure they win this fight. We usually say, you should help us Citizens United. I'm not making that pledge. But if you want to give us feedback, I am making this plea. Please do so at Equal Citizens Us Another way where you can find a form to give us feedback. Give me feedback. And the other plea that I'm making in every episode is that you do what you can to spread this word. We do politics. Fighting the algorithm. In America, some people can do politics by exploiting the algorithm. Those people are people doing the politics of fighting, of hating, of spreading, polarizing and dividing speech. That's necessary. I'm not saying they're evil for doing it. I'm just saying that it's easier for them because the algorithm likes their speech and spreads it broadly and affirmatively. But stories like this one, stories about issues that don't divide us, stories about issues that make it so a Trump campaign leader can stand next to me for 10 hours of the 13 hours that I stood gathering signatures in Hollis, Maine. And these stories are not as interesting, they're not as sexy, they're not the sort of thing that the algorithm is going to approve of. And so therefore, if we're to get this word out, you can't depend on it spreading on its own. You need to do your work, share it with your friends, share the season with your friends, share this episode, share whatever episodes you want, but share it directly in an email, maybe on Facebook or a tweet, whatever. Those are less effective again, because they fight the algorithm. Emails don't make them spammy emails. Don't worry, don't need to worry about the algorithm as much and so therefore they are more effective to getting the word out. Spread this to your friends in this movement and who need to be in this movement because we need to build the support to make sure we have the chance to get get us a democracy back. This is Larry Lessig again. Still, thanks for listening. Stay tuned for episode four. Sa.