Markets in Everything: Campaign Influence

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James Hoffman, Oregon's GOP challenger in the 2010 Senate race, has an op-ed in the Wall Street Journal today making a rather novel argument: campaign contribution disclosure isn't good for Democracy.  While it informs voters about a candidate's support, he notes, it also informs incumbents about who has supported their political opponents.  And since incumbents are likely to win--and to have a lot of power--this makes businesspeople reluctant to finance challenges.


James Joyner sees this as the inevitable cost of transparency:  

There's no way to simultaneously inform voters about who's backing a candidate and keep that information secret from other candidate, including the incumbent. And it's quite plausible, indeed, that victorious incumbents will hold grudges against those who spent money trying to get them ousted.
Is that rational concern enough to justify making political donations secret? After all, the secret ballot-the notion that it's nobody's business who you're voting for-is a cherished part of of political culture and publishing one's donations pulls the veil off.

I've long toyed with the notion that we should go the other way: allow unlimited donations, including from corporations.  But force them to go through an institutions which strips off the names and pools the money, so it's impossible to see who donated, or even the size of the individual donations.  Once a month, you get a check from the campaign finance bank, and that's it.

I have no idea whether this would pass constitutional muster.  But it would certainly cripple lobbying via campaign contributions, while allowing people to give as much support as they wish to candidates who they think will further their interests.  The overall result would probably be much less money in politics, with candidates much more dependent on small donors.  And it's possible that this could advantage incumbents--who get free television time--even more.

On the other hand, when you think about the evils of a system that produces (at worst) influence peddling and (at best) our politicians wasting phenomenal amounts of time schnorring for $2,000 contributions, it's hard to see how a blind system could be worse.
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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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