Comments on a Book Review

Yesterday, on this site, a book entitled “Ethics and Economics ,” authored by      Mr. Wight,was discussed. The review raised a few points that were a bit unclear to me.

One of the points made was that the government lacks knowledge about society. This is a bit surprising since the Bureau of Labor Statistics, the Commerce Department, and the Board of Governors at the Federal Reserve are probably the largest suppliers of raw economic data in the United States.  If, as a review of the book states,  legislators often act in a manner contrary to the public interest, perhaps a review of the Supreme Court’s recent Citizens United Case, which allows for virtually unlimited campaign contributions should be in the cards.

Like most conservative analysis, Mr. Wight ignores the basic concept of externalities.  When the state improves the highway system, this helps all by providing economic growth via ease of transportation.  When an entity pollutes, passing on the cost of cleanup to the wider society, this is a negative externality.  A purely market-driven economic policy will not provide positive for the wider society.

An examination of the 2008-2009 financial crisis demonstrates the folly of totally unregulated markets.  The institution at the core of the debacle was the insurance giant A.I.G. and its subsidiary A.I.G. Financial Products.

A.I.G.F.P. was the largest player in the credit default swap market.  Credit Default Swaps are insurance written to guarantee the principle of a bond.  A yearly premium is a percentage of the interest paid on the bond.  A.I.G.F.P. was a leader in insuring mortgage-backed securities.  This market was totally unregulated and unlike most insurance products and derivatives written against currencies or S&P movements, no reserves were required.  The A.I.G.F.P. was in effect renting the rating of the parent company to issue unreserved for insurance.

A.I.G.F.P. was closely monitored by then-C.E.O. Hank Greenberg until he was forced out in an accounting scandal brought on by Elliott Spitzer then Attorney General of New York.  The charges were later dropped but without Greenberg’s oversight, A.I.G.F.P. ramped-up its business, and in the short run was a significant contributor to the company’s overall products.

When the housing market burst, payments were required to fund the credit default swaps written against defaulted mortgages.  Because no reserves had been required, and there was no regulatory oversight for that market, the Federal Reserve Bank of New York was forced to bail-out the company to the tune of about US$180 billion.  Had the activities of A.I.G.F.P. been monitored in thee way Futures Exchanges and traditional insurance companies, the Great Recession and the recovery would have been less severe and costly.

Sometimes, the Government should play a role.

— Les Schreiber

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  1. LarrytheG Avatar

    Les has nailed it. Virtually every “study” that Bacon cites here is some smart ass private party or right wing “think” tank (and I use that word politely) that then reconfigures/corrupts/cherry-picks/manipulates government-collected data to demonstrate just how incompetent and clumsy the govt is… compared to the wonderful bunny-wabbit friend of mankind – the free market.

    Medicare collects data on fraud that the private sector does not (or if it does it does not release it) so that leads to the anti-govt nimcompoops to say “see.. the govt has massive fraud problems and the private sector does not – that PROVES the govt is incompetent). Like I said it takes nincompoops to engage in this..

    Bacon swoons over Uber .. completely ignoring the fact that the GPS satellite system is what make Uber possible.

    He blathers on about “big” data.. when 99 times out of 100.. said “big” data is data collected by the govt.

    He clucks his tongue on those terrible unfunded pension liabilities of the State and Feds.. completely ignoring the more than 5000 corporate pension funds that the govt had to rescue… from that wonderful “free market”.

    Conservatives continue to claim that the govt “forced” banks to give bad loans…via Community Reinvestment Act when the Federal Reserve and others clearly demonstrate that only 6% of sub-prime loans were given by CRA banks and in fact the vast majority of sub prime loans were made by unregulated mortgage companies.

    the philosophy of the FAUX free-market weenies is basically that if something works out right – it’s because the govt was not involved and if it turned into a disaster – it has to be the govt at fault..

    every single day – most every one of us blithely proceeds on green through a govt-maintained traffic light – as we motor on our way firmly seatbelted in to a keyboard to whine about how incompetent the govt is.

  2. John B Avatar

    Les, yes but…

    What is more troubling to me is that the government (BLS) often misses the ball and has to adjust new jobs, unemployment, etc. data a month or more after the fact. In addition unemployment numbers are squishy unless those opting out of the job search routine are considered. What/when do we get to believe what we are fed?

    Even worse are hints that NOAA, for example deliberately manufactures climate data (read temperature readings) to promote their announced global warming position. By no means is this type of obfuscation limited to NOAA, I suspect.

    How does the old saw go about statistics, liars, and damned lies or liars?

    1. JohnHop Avatar

      Your old saw is overly cynical. Anybody attempting to report the timely numbers that the Bureau of Labor Statistics calculates would have to adjust a month or so later. It’s the nature of the job.

  3. LarrytheG Avatar

    yes… a further corollary to the “govt is incompetent.. they can’t even do employment or climate data right..

    Of course in the latter example… we actually have a worldwide conspiracy of incompetent scientists not just US govt scientists but that sounds so bad that even those who believe it is a worldwide conspiracy won’t actually come right out and say it.. any more.. as said conspiracy theories have developed an odor as of late.

    and of course the number of complaints against the BLS rises and falls according to what the current politics are.. apparently they’re 100% accurate with the FAUX free-market (the govt is the problem) types are in charge. Saint Ronald Reagan was a big fan of gov stats… because the theory of cutting taxes to supercharge the economy was clearly validated by BLS stats.. but then apparently BLS was infested later by progressives.. in disguise as statisticians and have to be rooted out with each new GOP administration.


  4. Oh, BullWinkle! How can you say, Les, that Wight doesn’t consider externalities when the very point of his thesis is that social welfare MUST be considered in arriving at an agreement between willing buyers and sellers? There is no bigger externality than that. Adam Smith’s whole point, and Wight’s, is that that wonderful bunny-wabbit friend of mankind – the free market — needs moral mitigation by the parties themselves, especially by willing buyers able to buy elsewhere. If that seems naive to consumers today, used to an alphabet soup of rules and bureaucracies established by special interests on their behalf, consider what it means to look out for your own welfare. Hank Greenberg was in fact looking out for AIG’s best interests when he directed that his people stay away from mortgage speculation, and if we’d let AIG and its ‘too big to fail’ ilk in fact go to failure, that point would have been underscored and become part of good business lore. Instead, the governing philosophy is don’t even consider what’s good for society, do whatever the rules allow and anything else the regulators let you get away with. Sure there’s a place for government protections but we cannot let government define the entire economy.

    Jim had it right when he said, “At bottom, [Wight’s] book is an argument for social justice and a retort to the “modern welfare theory” school of economics.”

    1. BullWinkle? Do you mean BullTwinkie?

      On a more substantive level, you understand Wight correctly. (Or, at least, you understand my understanding of Wight correctly.)

  5. CrazyJD Avatar

    You only have it partly right. AIGFP was indeed one of the principal sellers of CDS’s. But your claim about reserves is not correct, mainly because you ignored the role of free markets in creating such reserves, instead supposing that because the GOVERNMENT didn’t require reserves, there weren’t any. Not so. The various players in the market for these turkeys required reserves against the insurance from each other. When the value of the underlying BBB- bonds went south more than a certain value, I believe it was 4%, the seller was required to post reserves to the buyer for the anticipated loss. Most houses required there to be an actual payment from the other party in this event. The real problem was that when the BBB- inevitably went south, some houses refused to make good on the reserves, especially with small players. So outfits like Cornwall and Scion took it on the chin. They had the last laugh however, because they then sold their “insurance” back to the big players like Deutchbank, Merrill et al. who were finally realizing that the bets they made on subprime were in the tank. Cornwall and Scion made hundreds of times what they had paid in premiums. In the midst of all this, one of the players, rightly thinking that all this wasn’t right, went to SEC enforcement in Manhattan. They promptly did…. nothing. They didn’t begin to understand the problem nor the financial vehicles involved.

    The bottom line is: the government can’t possibly keep up with this stuff. Basically they play whack a mole. Crush one type of money instrument and another rises. This is because if you are Michael Berry or the guys at Cornwall, you are not working for the government. They don’t pay enough. Michael Berry was an Asperger type, neurosurgeon, who quit the doctor business because he could make more being a financial type. He read, and enjoyed reading!!!, virtually all of the prospectuses of the subprime bonds made up of shitty mortgage loans. He understood what very few, if any, other people did, and certainly not the government types: That the government had encouraged lending to, e.g. the Las Vegas stripper who owned 5 buildings with subprime loans and had no idea that her payments would skyrocket in 2-3 years (initial teaser rate) and that she would not be able to refinance using the increased value of her properties to save her ass because in fact the values were on a bubble.

    The next mistake made by the government was intervening to save these idiots from themselves. Further bottom line: markets and their players respond to incentives. The government gave them incentives to create crappy loans. In some cases, the government in effect required it. The institutions who made the loans, understanding how crappy these loans were, sold them immediately. Then Wall Street houses, further responding to incentives, had an incentive to bundle these things up in bond tranches so as to disguise how truly crappy they were and thereby redistributing the risk undertaken by the loan buyers. After all, what person in their right mind would buy such crap. And there were fees for doing the bundling. What’s not to like.

    1. Thanks, Crazy, you said it better than I could have.

  6. To avoid confusion, Jon Wight did not raise the criticism that “government lacks knowledge about society.”

    Chris Edwards with the Cato Institute said that. I can’t speak for Edwards, but I would observe that the idea that “government lacks knowledge about society” is standard Austrian School economics, as articulated by Friederich Hayek. The problem is much bigger than statistics, although one can make the case that statistics are imperfect measures of reality. Government does not understand — no one can understand — all the interactions between the multitude of variables that government tries to manipulate through public policy. Unintended consequences are endemic to government policy.

    That’s not to say that the private sector knows all. It doesn’t. But the private sector doesn’t suffer from government’s hubris in social and economic engineering. You mention the AIG screw-up. Do you really think “regulation” could have caught that problem? Do you think that Frank-Dodd will identify and prevent the next impending financial catastrophe?

  7. LarrytheG Avatar

    re: ” standard Austrian School economics, as articulated by Friederich Hayek”

    there’s your problem…

    the economics world is never one item with one demand but all the theories are predicated on that. Throw in two or three real world variables and the concept of supply and demand becomes enormously complex… instead of one standard sized kumquat of one constant quality – the world is many different sizes and qualities in many different locations with many different markets.

    throw oranges and bananas into the mix and theories go to hell in a handbasket but that’s don’t stop the theorists.

    there’s also a simple answer for govt vs free market.

    you have 200+ counties in the world.

    name the 3 best in terms of free market besting the govt?

    we know this – the best countries in the world without question in terms of economic prosperity, literacy, life expectancy, etc are the ones with uber government… nasty, incompetent, flawed -uber govt.

    we have a 200 country laboratory and the free market – basically sucks as a provider of a more educated, more healthy, more prosperous society.

    we keep saying if only the uber-govt were more free-market they would be better.

    we have 150 countries that are more free market and less govt and none of them are better than the ones with uber govt – already.

    but as I said – that don’t stop the theorists… they just keep on oblivious to that 200 country laboratory… it’s the theory that counts.

  8. Re: “we know this – the best countries in the world without question in terms of economic prosperity, literacy, life expectancy, etc are the ones with uber government.”

    (1) We (which I assume includes me) do not all ‘know this.’

    (2) It’s difficult to figure out what, exactly, defines countries with “uber government,” but if that refers to the sort of pervasive social regulation found in several countries of the Baltic region of Europe, I certainly do not agree that “economic prosperity” or “literacy” are things at which they are “the best countries.”

    Re: “the free market basically sucks as a provider of a more educated, more healthy, more prosperous society.”

    (1) That may be your opinion, but I’ll hold our nation’s prosperity and our educational system and even our health system ON THE WHOLE up as vibrant contradictions of your claim, despite the obvious shortcomings and failings in our sharing of all three, as we talk about often on this blog.

    (2) We can correct factual misinformation and we can discuss and debate differences of opinion, but a rant simply shuts the conversation down.

    1. It would seem to me that the best way to measure “uber government” would be to look at those countries where the government spends the largest percentage of the country’s GDP. A simple and available measure. The “uber government” countries are: Timor-Leste, Kiribati, Cuba, Libya, F.S. Micronesia and Lesotho.

      Perhaps LarryG will decide to relocate to one of these modern paradises.

  9. LarrytheG Avatar

    the best countries in the world are OECD. and “we” do know this by virtually dozens of different metrics but I would certainly welcome alternative views… just lay it out.. . what do you judge nation success by ?

    Here’s one that aligns roughly with OECD – Human Development Index

    you cite our health care which costs 2-3 times as much as the other OECD countries and is essentially run by the govt if you’re thinking of the 150 million folks who have employer-provided or the other 50 million who get Medicare and millions more on MedicAid and TRICARE and the VA. All of these are heavily involved with govt.

    employer-provided would be no different than ordinary market insurance if not for the govt :

    1. – a 40% tax break given to those with employer-provided – not given to others who also work full time and need insurance not offered by their employer. How come they can’t go buy market insurance and get the same 40% tax break?

    2. – an insurer for any employer-provided insurance is REQUIRED by the govt to not deny insurance to folks with pre-existing coverage – unlike the treatment given to other full-time workers without employer-provided who COULD and were (before Ocare) denied insurance in the open market.

    3. an employer-provided insurer also cannot charge any subscriber more than any other subscriber regardless of their health status and all insured have the same plan whether they need all benefits or not.

    We have folks who think employer-provided insurance is “free market”.

    I’d not call this free-market .. in any way, shape or form. It’s uber govt
    rules… for health insurance… without those govt rules there would be no tax break and no protection from denial of insurance or price discrimination.

    there is virtually no truly unfettered free market in the US… virtually everything is subject to regulation but within that framework – there can be a competition of sorts between equally regulated products and services.

    if one truly wants far less govt regulation and far more actual free markets – I’d suggest the 160 countries that are not OECD. Lots to choose from. Usually when you present that option to who say they believe in the free market – they find many other things they don’t like in those other 160 countries – a lot of having to do with govt .. with a lack of govt that we take for granted in this country even as we pine away for “free market”.

    why does giving an opinion shut the conversation down? do you not have a voice?

    please explain.

    what drive me – is to find and face the reality – not be drawn into something that feels good and comfortable philosophy-wise.

    and that’s why I challenge the free market ideas espoused because they are so full of holes.. when you try to test them against the real world.

    I’m not defending govt – at all – I’m acknowledging the reality of it – and the reality of it – in my view is that the most developed countries on the planet – also have the most developed governments.. and the least developed countries in the world have much less govt…

    and I suppose in some folks minds there is the concept of “good” govt but it’s seldom mentioned in the free market discussion much less compared point for point with “bad” govt as in what’s “good” about OECD govt and what’s “bad” about non-OECD govt.

  10. Jonathan Wight Avatar
    Jonathan Wight

    Dear Les,
    I think you are responding to Jim not to my book. My book in many places points out the problem of externalities. I also devote a whole chapter to the financial crisis and to the myopia that led to deregulation of the financial markets, thinking that markets work magically without proper regulation in some areas. Adam Smith, the founder of modern economics, supported financial market regulations so as to reduce risk.
    So please, take a moment to check out my book. 🙂

    1. LarrytheG Avatar

      so apparently Jim B is getting something different out of his reading than you and Smith actually intended?

      I wish we could get a firmer context out of writing that make it obvious when someone takes something out of context and runs with it –

      at the end of the day – this is not about the legitimacy of Govt to regulate – it’s about different folks ideas of what Goldilocks regulation is or is not.

      and the fundamental mistake made over and over is the one where people essentially say that Traffic Signals are a failure because there are terrible accidents occurring at them……………

    2. Cville Resident Avatar
      Cville Resident

      I read your book and had a different takeaway than Mr. Bacon.

      As a utilitarian, I didn’t agree with your conclusions. However, it was an interesting read that I’d suggest to free market types who believe that somehow a “market” is anything but a reification of values. Whenever I hear people talk of “the market” as an independent entity from morality, policy, utility, etc., I just tune them out because they obviously don’t have much to contribute.

      If you don’t mind me asking….Did you read The Relentless Revolution by Appleby? If so, what did you think of her thesis that capitalism is just as much a social/political construct as an economic construct?

      1. Jonathan Wight Avatar
        Jonathan Wight

        To Cville Resident,
        I have not read The Relentless Revolution by Appleby, but I accept the claim that markets and society are inextricably bound together.

        1. I would also suggest “Bailout” by Neil Barofsky. Barofsky was a liberal Democrat hired by the Obama Administration to be the “TARP cop”. He details the appalling mis-handling of the entire TARP fund by our government. Anybody who believes that our government is competent must not have bothered to understand how TARP was managed.

  11. LarrytheG Avatar

    let me provide the Heritage Foundation definition of Economic Freedom:

    ” Q.1. What is economic freedom?
    Economic freedom is the fundamental right of every human to control his or her own labor and property. In an economically free society, individuals are free to work, produce, consume, and invest in any way they please. In economically free societies, governments allow labor, capital, and goods to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself.”

    note the role of government… and not the absence of “free market”.

    and note the caveat: ” refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself.”

    the phrase: ” to protect and maintain liberty itself”

    is the proverbial mega fly in the ointment…

    to me – that implies that something has to protect and maintain and if it is not done – there can be a loss of liberty.

    to me – a pure free market – … does NOT “protect and maintain Liberty”.

    I suppose one can also disagree as to what “Liberty” actually means

    but most discussions about the free market – portray it as a struggle to be free from govt… not depending on govt.. until of course one points out free markets in 3rd world countries.

    what I’m after – is a more forthright and honest discussion of the legitimacy and need (or not) of govt in free markets..

    1. “what I’m after – is a more forthright and honest discussion of the legitimacy and need (or not) of govt in free markets..”

      Wrong question. Nobody doubts the legitimacy or need for government in free markets. Not Adam Smith, not Jim Bacon, not Thomas Jefferson. Nobody.

      The question is the extent of government’s involvement and to whom the government should be accountable.

      I believe our government is excessively involved in all aspects of society and is accountable only to the monied special interests who stuff the peckets of our professional political class.

      1. Cville Resident Avatar
        Cville Resident

        DonR (and Jim Bacon if you are reading):

        I have a serious question.

        I tend to agree that government at the state and federal levels is out of control/incompetent/unaccountable in many ways.

        But I believe this unaccountable incompetence is a product of the lack of campaign finance controls and the Citizens United decision.

        Why are politicians only accountable to the monied interests? Because money dominates the election process rather than voters. We have the wild west of political campaigns in which billions can be poured into elections.

        The only real solution to returning accountability to voters is campaign finance laws/regulations that limit money in the election process.

        But I see almost zero willingness on the right for such laws.

        However, I don’t think anyone can look at DC and Richmond the past few years and not come away with the distinct impression that the legislators and executive branch have been captured by the monied interests and voters are simply a sideshow in the process nowadays.

        1. LarrytheG Avatar

          I’m of the view that Citizens United corrupts the very basis of Democracy and point out that other OECD countries pretty much outlaw money in politics.

          However, having said that, are we so ignorant that we can’t figure out where some of these Ads are coming from?

          and I guess the answer is – yes.. as an electorate – we can and are so lazy that we are easily swayed by disinformation campaigns.

        2. TooManyTaxes Avatar

          My problem with critics of Citizens United is their often failure to tie either everyone’s hands or no ones. A couple of examples follow.

          I’ve lived in other states where corporate political contributions are illegal, but not those from unions. Why the difference? The Internet has clearly leveled the playing field between non-traditional media and other entities that offer economic, social and political opinion and traditional media, yet the Federal Elections Commission is looking at imposing restrictions on the former (positive endorsements or negative ones could be campaign contributions) but not to the later. Why are the WSJ and WaPo different? Some on Twitter or Facebook have much larger followings that do newspaper editorialists.

          Why do we obsess over businesses (and labor unions) attempting to influence public policy, when we aren’t considering restrictions on all nonprofits (or at least those who have employees)? Why is it OK for a private foundation to spend money commissioning a study on climate change, but not a group of coal companies or electric utilities? How come the Sierra Club can have a nonprofit arm and a PAC? How come nonprofits can outspend PACs.

          If you want to get rid of Citizens United, you need to impose drastic limitations on traditional media and nonprofits. If not, the government is regulating speech based on its content. Uncle Joe Stalin did that.

      2. LarrytheG Avatar

        re: ” I believe our government is excessively involved in all aspects of society and is accountable only to the monied special interests who stuff the peckets of our professional political class.”

        Now if I could just get you to agree on specifics with Bacon and a few others.. we might be cooking with gas.

        failing that- what we have is a humongous torch and pitchfork crowd all shouting different ideas…

  12. “If, as a review of the book states, legislators often act in a manner contrary to the public interest, perhaps a review of the Supreme Court’s recent Citizens United Case, which allows for virtually unlimited campaign contributions should be in the cards.”

    There are several problems with that statement. First, there is considerable precedent for the Supreme Court’s decision in Citizens United. Second, the Supreme Court justices are appointed for life and don’t need the kind of campaign contributions supposedly supported by the Citizens United decision. Finally (and most importantly) our elected politicians have all the power they need to amend the US Constitution. However, they have no intention of amending the Constitution to rectify the flaw uncovered in Citizens United. Why should they? They have been bought and paid for by the people benefitting from Citizens United.

    I’ll believe the liberal outrage against the Citizens United decision when I see an honest effort to amend the Constitution to get the money out of politics. Until then, the complaints remain just another high pitched screech emanating from liberal politicians who are perfectly happy with the present system.

  13. LarrytheG Avatar

    re: ” I’ll believe the liberal outrage against the Citizens United decision when I see an honest effort to amend the Constitution to get the money out of politics. Until then, the complaints remain just another high pitched screech emanating from liberal politicians who are perfectly happy with the present system.”

    Don – have you been paying attention to the right’s recent angst over SCOTUS and talk of impeachment and worse?

    The “screaming liberals” are paragons of law and order compared to the right these days when it comes to government.. or have you not noticed?

  14. TooManyTaxes Avatar

    Larry – people have been ranting over judges, especially Supreme Court justices, forever. Remember history class and FDR’s proposal to enlarge the Supreme Court because it didn’t uphold his programs? Court-packing, I believe it was called. Impeach Earl Warren too. It’s all political noise.

    Amend the Constitution if you want to overturn Citizens United or Obergefell, for that matter.

    1. LarrytheG Avatar

      TMT – I totally agree – but until recently I’ve never heard folks talking about impeaching the POTUS, recalling them, making them take Ocare, etc..

      do you support impeaching the SCOTUS or making them stand for election?

      I totally think the Citizen United has corrupted the Democratic principles of this country.. I strongly disagree with the SCOTUS but I do not support impeaching them nor making them stand for election.

      I DO support electing a POTUS who will replace them… because I support the way the Constitution was written.. I believe in the wisdom of the forefathers in setting up 3 parts of government.

      I’m become convinced that the right gives a rat’s butt about the Constitution. They basically want to rule with their beliefs.. and the means to achieve it justify the end .

      They used to claim to be strict constructionists.. no more.. many of them believe that the SCOTUS are outlaws…

  15. Les Schreiber Avatar
    Les Schreiber

    In reference to Citizens United, the NYT reports today that of all the money already donated for the 2016 Presidential race about 1/2 has come from 400 donors.

  16. LarrytheG Avatar

    The absolute corruption of Citizens United is to allow dark money. The entire concept of letting people “speak” with their donations is totally corrupted when they give to PACs and no one knows where the money came from – left or right.

    Anyone who thinks this is what the founding fathers wanted, I’d strongly disagree and just point out that the SCOUTS has not always got things right and sometimes it takes a while to get it right…

    that’s our system… the idea that we should change our system to elect or appoint the SCOTUS is – not coming from the left..

    1. TooManyTaxes Avatar

      The right to spend money in an election is the equivalent of speech. If the WSJ or the WaPo write or otherwise publish an editorial related to an election, they incur costs. Editorial board members are paid. Candidates often tout being endorsed by this or that media outlet. An endorsement is the same as a campaign contribution. If Murdock or Bezos can spend their money to affect an election, why can’t anyone else?

      What I fear is regulation of speech based on content. That is hundreds of times worse than allowing rich people to spend money on elections. The risk of regulation of speech based on content is one of the reasons we have the 2nd Amendment.

      1. Cville Resident Avatar
        Cville Resident

        You make good points. But I suppose if you accept your points, you end up in a dead end of how to make politicians and government officials accountable to VOTERS. The First Amendment would bar any regulation of newspaper endorsements.

        And that’s what this nation is struggling with….whether it’s the right (Tea Party) or left (Sanders/Warren), they’re both “fed up” with the fact that the nominees are basically handpicked by billionaires up and down the federal ballot.

        And there’s zero accountability so long as the politicians/gov’t officials do the bidding of the donors. Not the voters.

        The voters have become the sideshow in this democracy. What occurred this weekend with the Kochs and a few GOP candidates is obscene and is the rule and not the exception. Striptease for billionaires to get their support and who really cares about the voters’ preference?

        I’ve never heard anyone answer this riddle: Why is it that in this day and age….10 voters in a Congressman’s district who are not wealthy could ask for a meeting with a Congressman….and they’d be lucky to meet with a 21 year old receptionist. An out-of-state corporate contributor with zero ties to the district who gave five thousand dollars to the Congressman can ask for a meeting and he’ll be on the schedule within a week. In what rational world is this representative democracy?

        It’s why I might say, “What the heck” and vote for Trump or Sanders or Webb if they are on the Virginia primary ballot. At the very least, I don’t feel like they are completely beholden to their contributors.

  17. LarrytheG Avatar

    TMT – how do you feel about identification of the people giving the money?

    I have no fears based on content… and I’d be with the folks opposed to any attempts to regulate content but be careful of what you wish for – it works both ways.

    I’m far more worried about the identity of the donors.. and what their known positions are.

    1. TooManyTaxes Avatar

      Mixed feelings on identification of donors. We’ve generally required identification of who gives to what campaign or cause. But, at the same time, we have the important case of NAACP v. Alabama ex. Rel. Patterson, 357 U.S. 449 (1958). In that case, the Supreme Court held the right of private association includes the right to keep membership lists confidential. I’m not sure where disclosure of donations bumps into the right of privacy in membership.

      I’ve read about situations where people opposed to an issue look up donors on the other side and harass them. Both extreme right and left have done this. It’s wrong. I’m not sure where to draw the line.

  18. LarrytheG Avatar

    to allow secret money in elections is to destroy Democracy.. in my view.

    if someone is going to harass someone else for ANY REASON there are laws for that.

    but if you allow unlimited secret money in elections, then you’ve undermined the essential reason for elections.

    I don’t know about you guys TMT – ya’ll don’t seem to get what is really important sometimes.. my view.. all due respect.

    do you not think unlimited secret money is a threat to Democracy?

    1. TooManyTaxes Avatar

      Larry, I get it. As I’ve written on numerous occasions, I could support a constitutional amendment that limits campaign spending to a reasonable amount per year per live human being who is a citizen of the United States. No PACs, no bundling, no corporations, no unions, no nonprofits, no foreigners. I’d go so far as to prohibit any donations to any candidate the donor is not eligible to vote for. No trips by Virginia politicians to New York or Hollywood.

      But unless that amendment is passed, I support Citizens United. What is more dangerous than the Kochs or George Soros is the idea that certain people can operate media organizations and be exempt from the laws. The WaPo and the WSJ can write editorial after editorial (and refuse op-eds as desired) without it being a campaign contribution. Yet if you and I from a PAC, we are limited and regulated. There is no reason to treat media, nonprofits with affiliated PACs, academia, etc., different than anyone else, including Soros and the Koch Brothers. Frankly, absent Citizens United, it is more than likely the federal government will put its thumb on the scale. All we need to look to is Richard Nixon and Barack Obama for precedent.

  19. LarrytheG Avatar

    TMT – when you talk about who owns Media and how they operate, have you considered FOX news and the new owner of WSJ?

    You seem to be equating media with PACs..

    surely you do not support putting controls on Media like we would for PACs?

    In terms of Koch and Soros – what I advocate is not controls on their spending – but reporting requirements for their spending.

    Right now – if a candidate runs an AD – at the end they have to say “I authorized this message”.

    That’s what we need to have for Ads paid for by PACs.

    we need to have a statement that says what PAC paid for the AD and a full accounting of where their money came from – in the style of VPAP – simple database of the donors and the amounts they donated.

    I’m NOT in favor of controlling the PACs message nor the Media much less editorials.

    jesus TMT – you really want to control editorials?

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