Unit 5Quiz 1 review

Political Parties

Political Parties are formed by people who share similar ideas. The goals of the party are to influence and control government decisions by getting their representatives elected into public office.

Conservative generally favor the Republican PartyLiberals generally favor the Democratic Party

We have a 2 party system Why? This does lead to stability

Roles of Political Parties:

Nominating Candidates and support them financially- GET THEM ELECTED!!!!!

Informing and activating supporters

Bonding (Stamp of Approval) – reputation

Governing (check and balance)

Watchdog

Interest Groups

Political Parties Interest Groups

Nominate

Larger Scope and more issues

Obtain votes

Supports one candidate

Supports candidates

Raise $

Solve issues

Members share views

Influence

Compete, inform, activate

Single issues

Multiple candidates

Influence but don’t nominate

Money!!!!!!!!!

Money from

Political Parties

Interest Groups

Big Business

Unions

The largest % of donations for campaigns always come from individuals.

So why don’t individuals have as much influence?

- Organization- The list above contains groups that are extremely organized with a common goal.- Their marginal benefit is much greater than their own share of the marginal social cost.

Political Action Committees

Political Action Committees (PACs): an organization that pools contributions from group members and donates those funds to candidates for office

They win more often than not.

PACs are often created by big business, unions, and corporations

The are also PACs called leadership PACs that are created by other politicians, these politicians raise money for other candidates in the hopes that if the candidate wins the election that they will be rewarded by being promoted to leadership positions.

Remember + 90% of all elections are won by the candidate who spends the most money.

Key: Correlation does not mean causation

Primary goal of contributions is generally to gain access to incumbents.

Why do you think PACS donate more to incumbents (current office holders)

Relations developed between Interest groups and incumbent

Friendship is a Wonderful Thing

Campaign Finance ReformPrior to 2002

Hard money- money directly donated to candidates was limited

Individual- $1000 per electionPAC- - $5000 per election

Soft money- money indirectly donated to candidates (through the party) was unlimited

Bipartisan Campaign Reform Act 2002 aka McCain-Feingold Act

Hard Money

Individual PACS$2,500 per election $5000 per election$30,800 per year to party, $15,000 per party$10,000 per year to state/local2 year cycle- $46,200 to candidates, $70,800 to parties

Soft Money that is given to political parties for the sole purpose of elections is illegal

Soft money used for voter mobilization and “issue” ads but not directly endorsing or criticizing as specific candidate are legal. This is called a 527

Campaign Finance ReformWho cannot contribute?

Foreign nations

Unions and Corporations- they must form a P.A.C.

No cash over $100

No contributions in another name (parents cannot use their kid’s names)

2010

Citizens United v Federal Election Commission

Supreme Court Ruled that funding of independent political broadcast in candidate elections cannot be limited pursuant with the rights entitled by the first amendment.

In short, it is unconstitutional to limit an independent corporation, union, group, or individual from paying for an independent commercial or advertisement. So long as they are not affiliated with a party or a candidate, anything goes.

Applying Supply and Demand to better understand Campaign Finance Reform.

It was believed that PACs, special interest groups, corporations, and unions had a potential unfair advantage by donating unlimited amounts of soft money into elections. In other words, the amount of campaign financing from contributors exceeded the “socially optimal” level.

Congress had a desire to shift the equilibrium points back to an optimal level. They could create a bill that could shift the demand or the supply of campaign financing.

Price- as a measure of time and effort for the politicianQ- as a measure of donationsqe- Quality at equilibrium (natural)qo= Quality Optimal (MSC= MSB)

Q

P

qeqo

pe

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Congress could take a couple of different approaches.

They could limit their own demand (willingness and ability) to collect campaign contributors. This is unlikely because it puts all candidates on equal footing and takes power out of their hands.

D1MSB

p2

Shifting the demand would lower the price for the candidate- in this case the price can be viewed as a measure of time spent and promises made.

This places all candidates on a level playing field.

In a sense this also forces the politician to accept a portion of the blame by implying that it is they who are accepting funds that exceed the socially optimal level.

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qeqo

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They could limit the ability of the suppliers (donators). This increases the need to gain more donators.

MSB

MSC

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MSC

Shifting the supply would increase the price for the candidate- in this case the price can be viewed as a measure of time spent and promises made. This additional burden is more difficult for the challenger to absorb than the incumbent who already has “friends”, money, and most importantly a reputation.

In a sense this allows the politician to pass the blame by implying that it is the donators who are at fault because it is they who are contributing funds that exceed the socially optimal level. The politicians are now “fixing” the problem.

p2

Impact on Campaign Finance laws

The Bill has not resolved the issue.

1. More money than ever is collected.

2. Campaigns are now twice as long, some experts even suspect that the campaign season will never end, we will just simply roll into the next campaign cycle immediately after the election.

3. Politicians now use social media more than ever so it is easier for them to obtain massive amounts of funding without all of the travel.

4. Contributors have circumvented the bill by privately funding their own ads and commercials.

2008 election

So far for the 2012 Election (as of 12/1/11)

It begs the question

If current office holders benefit so much from money why would they want to make it more difficult to raise it?

Hint: Think about the Public Choice theory on why businesses like regulations.

Related capture theory to Campaign Finance

If the majority of people find themselves somewhere close to the middle and the goal of politicians is to earn the most votes, why don’t see more politicians in the middle?

Answers:

Political Parties combined with closed primaries develop candidate that are further from the center because the original voting bases are more to the right or to the left as compare to the general voters in the fall.

Money!!!

Although most people find themselves in the middle and collectively its these people who donate the most, per donation it’s the larger groups on the outside such as corporations, interest groups, and unions that have greater impacts.

10 10 10 10 10 10 10 10 10

People will stay on the beach and in between jettys and eat hotdogsAll vendors are the same, people will eat at the closet hotdog vendors

Median Voter Theorem

Where do you place your hotdog cart if you are by yourself? Why?

Where do you place your hotdog cart if you have competition? Why?

What does a third hotdog vendor do to the situation?

Median Voter Theorem-Nash Equilibrium

The median voter theory, also known as the median voter theorem or Black's theorem, is a famous voting theorem. It posits that in a majority election , if voter policy preferences can be represented as a point along a single dimension, if all voters vote deterministically for the politician who commits to a policy position closest to their own preference, and if there are only two politicians, then a politician maximizes their number of votes by committing to the policy position preferred by the median voter.

http://www.nytimes.com/2010/02/07/business/economy/07view.html

Closed PrimariesForce Candidates to first appeal to the median voter of each party.

This forces the candidates to start further apart and establishes a reputation.

General Elections

Closed Primaries

Closed Primaries- only registered party members may vote in closed primary elections. Resulting in the median voter shifting farther from the center.

During closed primaries candidates attempt to move farther from the center to satisfy their median voter.

This results in general elections that have candidates starting farther apart.

DD

RR

DD

RR

In terms of a general election if a person votes for a 3rd party candidate and that candidate doesn’t win who has voter helped?

Propaganda- click on each link to see examples

Techniques used to influence thoughts, positions and actionsAdvertising and Marketing - InformationTypes

Transfer (symbols)- taking a well known symbol and applying it to the message in attempt to transfer the symbol’s meaning to your message.

Plain Folk- attempting to make connections between politicians and regular people

Name calling or mud slinging- pointing out the negatives of a candidate- usually focuses on record http://www.youtube.com/watch?v=iQ5CIkSlUFI

Glittering Generalities- attaching catching names and words to otherwise boring, non committal, and negative ideas. Often used to cover up real meaning and substance. Examples: dream act, no child left behind, patriot act, fair share Jobs Bill

Band wagon- people want to be associated with the winner

Endorsement/testimonial- Being supported by a celeb.

Emotional- using fear, happiness, security

Card stacking- stacking up information in one’s favor that usually leads to fallacy. Example: 1 % vs 99% http://www.youtube.com/watch?v=YLCeUkg5b94

Fear

Summary

Provide an explanation as to why candidates seem to move away from the center even though most voters are relatively moderate?

Money- Even though collectively more money comes from donations by individuals, when you look at each donation the heavy hitters are the PACs that are created by unions, special interest, and corporations. (law of supply)

Knowledge of Scope and issues- It is impossible to satisfy the needs and wants of every individual and to know exactly why and what each person believes (remember the test 2 to the 60th power). It makes the most sense to appeal to the average position of each issue

Primaries and especially closed primaries force each candidate to appeal to the voting base of the political party (median voter theorem). This moves the candidate further from the center prior to the general election.

Summary

Provide an explanation as to why candidates seem to spend more time on swing states like Pennsylvania and Ohio and not bigger states such as California and Texas?

Reputation- California and Texas have established reputations and these reputations force candidates to decide how to use the scarce resources of money and time.

Law of Supply- With some of the bigger states already “spoken for” the candidates will allocate their resources on larger states that have a history of voting for both democrats and republicans.

Summary

According to Public Choice Theory

Why don’t businesses mind regulations?

Why do incumbents vote for campaign finance reform?

Why do Presidents and members of Congress speak out against Earmarks and Pork barrel legislation?

Why will Congress never vote for Congressional term limits?

Why is deficit spending politically correct?

Why would there never be a balanced budget amendment and why do we also raise the debt ceiling?

Why does 6 and 7 make it difficult to place blame on a specific politician?

How does the political cycle coincide with the business cycle?

The Dinner Party and the Tragedy of the Commons

Congressional Spending