tbd if this silly title wrecks my email-open rate like the last one i tried did I have been saved from by hubris by the substack title test function
Photo by Giorgio Trovato on Unsplash
The Democratic party, especially the more progressive side, is pretty leery of the general concept of “money in politics”. Groups like End Citizens United are pushing for limits on outside spending (generally IE spending), and Democratic candidates periodically pledge to reject certain types of donations, or tout their small dollar fundraising credentials. This is all at a time when Democrats have raised staggering, record breaking quantities of money, especially for national races.
Cards on the table, I think much of the anxiety about money in politics is pretty silly. Yes, it’s a bit weird that we light this much money on fire every cycle, but are other likely uses for that money any more virtuous? Would we rather it sat in rich people’s pockets? I haven’t seen much evidence of “corrupting effects” of taking donations, other than a strong, strong bias towards “anything that keeps getting us donations”. This doesn’t usually mean switching policy views, just doubling and tripling down. Which is, to be clear, bad and annoying, but would still happen if you halved the overall $$.
A somewhat-formative piece of literature for me was the Ansolabehere paper on “Why is there so little money in US politics?”, which (in addition to having a very decent overview of campaign finance rules) walks through the logic of: if spending money in politics produced any sort of clear financial benefit, wouldn’t there be *way more* money in campaigns? I.e. if you really could buy certain outcomes, and it was an efficient investment, wouldn’t it happen way more? This paper frames political spending as an expressive good, which matches what I see happening in practice. Donations are mostly on vibes and a desire to look like a good person, not because specific outcomes are expected.
Virginia’s campaign finance laws are approximately “go for it”. There’s no limit to contributions to campaigns, from either individuals, PACs, parties, anything. This includes in-kind contributions, which can be things like running mailers for a candidate, handing over polling data, or other varieties of goods and services. Normally, you’d need to strictly avoid coordinating with a candidate and keep your spending classified as “independent expenditure”. In a state with no limits, you don’t have to worry about that.
This absence of spending limits means that you can meddle in the VA elections extremely freely. You could go drop a million dollars into a candidate’s account tomorrow, if you cared to (and had a million dollars to spare). VA is an outlier in this. Eleven states (Alaska is in court about this) allow unlimited individual contributions, nineteen do not restrict party spending, and seven allow unlimited PAC spending (see the NCSL for more). Those states mostly don’t overlap, although I haven’t been able to pull together a nice map of this. Point is, VA is *weird*.
Anyways, it is possible I’m hideously wrong here and political spending is secretly corrupting us all. I raise the Virginia example, because *if* political spending has negative effects, you’d expect to be able to see them in the most go-hog-wild off-cycle state.
So, what do we actually see?
If spending in VA politics is meaningfully skewing outcomes and governance in the state, via something like corruption, bribery, or just weird incentives, I would expect:
Outsized spending, particularly in less competitive races
Altered election outcomes, reflecting different patterns from the rest of the country
Tax policy favoring the very wealthy, and corporations
Labor laws doing the same
A limited social spending regime, or low state spending overall
Looser regulations, particularly on safety issues
I’d also expect that VA would be notably different from comparable states in a way we could attribute to that spending.
Let’s go through those points.
This is going to be a pain to measure, particularly because VA runs Gov/State Legislative races in off years when everyone has money to burn and not much to do. Also, state legislative spending data is a disaster. NJ is the easiest comparison, since it runs on the same cycle.
It looks like, in 2021, about 59 million dollars was spent on the races for the NJ Assembly. [The best source I could find here was a whitepaper by the NJ Election Law Enforcement Commission, link here] The Assembly is the lower house chamber, with 80 seats. For VA’s House of Delegates (100 seats), in 2021, it looks like about 84 million was spent [thank you VPAP]. That is more! It’s like 730k vs 840k per seat. This isn’t a precise comparison at all, but I would treat that as notably more spending.
Is that spending going anywhere unusual that might indicate non-competitive purposes? Hard to tell, but doesn’t look like it. VA has really great disclosure laws, and at a glance it doesn’t seem like sure-thing candidates and races are getting unexpected piles of money. You can also see if business donations are a large part of campaign spending, and it looks like not really.
So, outsized spending: ehhhhh, maybe a little
Do VA’s election trends look really different from the rest of the country?
Not really. VA has gotten increasingly blue as education polarization has set in, and college educated white voters have swung increasingly towards Democrats. The state has gone back and forth between Democratic and Republican governors, and control of the state legislature has been tightly contested (tbt when they literally drew a name from a hat). It also doesn’t seem to have any huge gaps between Presidential results and local results that you might expect if local votes are super skewed.
There’s two possibilities here. One, the money influence is roughly split evenly by partisanship, so it doesn’t drag election results in any given direction. Two, it just doesn’t matter that much.
Altered election outcomes: nah
Absolutely NOT my area of expertise, but I found this website from the “Tax Foundation” that ranks states by tax policy (which is to say, they highly rank states with low taxes). I disagree with their fundamental conceits, but as far as I can tell they are reporting numbers accurately. The wild disagreement also makes their website a very funny read: high taxes, the horror!
This site ranks VA as 28th in their “state tax competitiveness index”, which is right in the middle. The index rates states with lower taxes higher (Wyoming is 1st) and high taxes, lower (NY is 50th). It seems like their sales taxes are on the low end, income taxes are a bit higher, and corporate taxes are basically in the middle. There’s no estate or inheritance tax, which is a win for the very rich, but those things don’t seem to be particularly common, so I can’t ding the state too much.
[PS, I am lightly haunted by this section in their writeup:
“Tax competition is a little like WAR—not conflict, but Wins Above Replacement. The term comes from baseball, where it is intended as a sabermetric statistic to measure how many more wins a team can claim due to a specific player above the amount that would be generated by a replacement-level player. It’s much the same way in public finance: a well-structured tax code won’t make the Wyoming Basin a metropolis, nor will poor tax structure make Manhattan a ghost town.”
It really is the same everywhere, huh?]
Tax policy: basically normal, I think, probably
VA has a right-to-work law, a $12/hr minimum wage, and otherwise pretty normal labor rules, per Oxfam. It looks pretty dang good when compared to its southeast neighbor states. It gets a B from the Commonwealth Foundation on labor laws overall.
You could argue that VA is somewhat behind very blue states in terms of labor laws, but it also looks wildly better than NJ. If you compare to the also very competitive PA, VA looks better. I’m not too surprised by the right-to-work law, given how southern the state is.
Labor laws: no effect
According to the Urban Institute, completely normal. Per capita public welfare spending looks on the high-middle of the range, especially using the per-low-income-individual metric. The state expanded Medicaid in 2019, with a trigger law that will cut coverage if Trump cuts Medicaid funding.
Social spending: no effect
Absolutely all the sources on this are right-leaning, and some of them seem to be literally counting the number of times the phrase “shall not” appears in state law. Is this really representative of burden? I have no idea. Presumably the regulatory state also varies a lot by topic, but I’m not clear what topics I should try to use as a model, or really how to do that.
As a very, very initial cut, the Mercatus report on regulatory burden puts VA in the middle on “number of restrictions”. Again this seems like a really odd way to measure anything, but it’s what I’ve got. There’s also a rating of states by theoretical friendliness to small business, with VA again in the middle. I never realized just how many websites there were handing out “bad grades” to liberal states, lol.
Regulation: no effect
I mean, this is not a greatly detailed investigation. I haven’t really touched the specifics of donation behavior, or who the major donors are. There’s also the entire blob of whatever is going on with Dominion Energy, which is a major VA donor and also utility, which may have specific political asks I am simply unaware of.
But from the metrics I set: not really!
Along the handful of measures that I expected to be skewed or altered by unlimited campaign spending, VA looks pretty dang normal. It looks roughly like what you’d expect from a blue-but-competitive state. There’s a bit more spending than in other places, but not a huge amount. It’s all kind of.....meh.
*If* there is an effect of the bonus money, it’s awfully muted. You can argue that the competitive nature of VA mutes the effect, or maybe the strict disclosure requirements do. But if those things are enough to stop the negative effects of money, that money isn’t very powerful in the first place.
You could do an expanded version of this analysis where you try and correlate spending limits and dark-money-volumes with state policy, or trace particular VA spending to outcomes/actions by legislators. There’s a lot more that could happen here. My meta-argument, however, is that such a corrupting effect should be *obvious*, which it sure isn’t.
Maybe money in politics doesn’t actually do all that much.
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