News & Views from 465 California Street

Drowning Democracy

Clint Reilly

When it happened, no one is quite sure. But during the late 1970s and early 1980s, the stream of money flowing into our political system began to swell. Since then, the river has become a raging flood that is now drowning our democracy.

I remember managing my first victorious campaign in the 1970s. We spent less than $20,000 on a major race and won handily.

Another time, I was able to win a campaign for my client by spending less than $2,000. We placed brochures on the seats of every transit rider and delivered our literature door to door with teenage volunteers.

During those lean years, I needed a day job to support my forays into political campaigning. I opened a store on the San Francisco waterfront at 33 Filbert Street just to pay my bills.

I would have starved to death if I had tried to live on my pittance wages from running campaigns.

But by 1980, my fee alone for running a single congressional race in Los Angeles was well over $100,000. In 1987, my firm earned millions when I was hired to direct a package of initiatives on the California ballot. And our bill was only a slice of the nearly $80 million spent on the races.

At the time, I thought this huge sum would become a high water mark for spending. In fact, the amount has been exceeded multiple times in the intervening decades.

The mega sums now spent on elections are nothing compared to the gusher of cash paid out by special interests for lobbying and public relations.

Political consulting firms now also have lobbying arms that flak and spin for labor unions, corporations, professional associations and trade groups.

Consider these numbers:

Last year, corporations and interest groups spent $3.47 billion lobbying Congress on various issues. $430 million was spent lobbying Congress against health care and insurance reform alone! This doesn’t include lobbying at the state and local level.

Citizens craving change are sidelined as Washington lobbyists eviscerate banking, health care and energy reform like a pack of hyenas attacking a wounded antelope.

But instead of ringing alarm bells, all hands are still deep inside the cookie jar. The politicization of almost everything continues unabated as hired guns point their six shooters at whatever pot of public money they seek to rob.

In the mayhem it’s increasingly difficult to identify the thieves.

Politicians are simply unwilling to say no to special interest groups with large war chests capable of defeating them with a barrage of 30 second TV spots. They’d much rather have those same groups funding their campaigns.

So, they scuttle reform, rely on gimmicks and delay the inevitable. But America’s day of reckoning may soon be at hand.
For instance, generous pay and pension packages are threatening the long term solvency of cities, counties and states throughout the country. Vallejo has already declared bankruptcy.

Contra Costa Times journalist Dan Borenstein’s dogged reporting and analysis on public employee pensions has uncovered a deep well of excess, obfuscation and abuse. And that’s only the tip of a national iceberg. Experts estimate that the unfunded pension liability of local and state governments ranges between two and three trillion dollars. Such sky high numbers presage a potential tidal wave of future government defaults.

British historian Niall Ferguson warns that American economic hegemony is not necessarily assured. “Most imperial falls are associated with fiscal crisis, sharp imbalances between revenues and expenditures,” he notes in a recent issue of Foreign Affairs.

Politicians and lobbyists who treat government like a piggy bank for special interests are jeopardizing the goose that lays the golden eggs.

Comments (6)

  • It should come as no surprise that our democracy is drowning in money.
    We have witnessed an unprecedented growth in government over the period
    you note. As the percentage of GDP consumed by various levels of
    government has increased dramatically over the last 40 years, and as the
    scope of government rules and regulations have exploded, the stakes have
    gotten much higher. Less and less do we have markets allocating
    resources, and more and more we see politicians like Nancy Pelosi and
    Tom DeLay allocating resources. Any entity with any economic interest
    would be a fool to sit on the political sidelines.

    Hold on to your seats! With the “historic” passage of healthcare
    “reform,” it is only going to get worse. Just witness the backroom
    deals that have already been made to secure support for this bill.

    Keep writing thought provoking and insightful peices. Even though I
    usually disagree with you, I enjoy starting my day with your column.

    David B

    Posted by: D.B. | March 23rd, 2010 at 8:24 am

  • I was happy to see your support of Daniel Borenstein’s expose’ of the egregious pension ‘spiking’ affecting state and local government agencies. I agree with your thesis:Political contributions by organized interests are a ‘rent’ and not a gift.

    Posted by: Tom H. | March 23rd, 2010 at 9:27 am

  • Love the col but you were far too lenient with public employee unions today. Read Plunder by Greenhut, just off the press. A tsunami of unfunded public employee pension benefits is about to inundate cities all acros the nation.

    Posted by: Bud | March 23rd, 2010 at 9:28 am

  • I find your latest column right on the mark.

    I find it, however, ironic to hear this complaint from one who celebrated
    the rise of liberal power expanding government employment at 150% the cost
    of private jobs and just voted to spend another trillion dollars as if it
    were pocket change.

    All of it begs the question: At this rate are you even going to find the
    goose that lays the golden eggs anymore?

    It may have flown off to warmer climates.

    This reality has sunk in and spawned the tea party movement. Both political
    parties have been feeding on the public trough, the current lot promised
    change but brought more of the same, actually redoubled it. Hence your
    headline would more appropriately be Drowning Democrats this coming

    Erich K

    Posted by: Erich K. | March 23rd, 2010 at 10:05 am

  • Thanks for the history lesson on money and politics. Next I’d like to read your proposals to remove or restrict the current life blood of politics. When money, not ideas or qualifications, win elections it undermines public confidence in our political system and creates a pessimistic voting population who develop a knee-jerk response to all things asked of the voters – No.

    Does any California voter not know that Meg Whitman’s only tactic in the upcoming gubernatorial election is to out-spend the competition? How is this different, or unexpected, than any other political campaign? The media reports a candidate’s or issue’s “war chest” and pick the one with the largest as the winner before the votes are counted.

    Posted by: John B. | March 23rd, 2010 at 12:51 pm

  • I was very disappointed to see your positive reference to Dan Borensteins hit pieces on pensions for Media News. He has made an impact by intentially lumping all government pensions with the two real problem sources which have yet to be corrected; medical benefits after retirement and the Safety Retirement System offering 3% @ age 50 retirements. The basic CALPERS system is strong and will remain solvent if adjustments are made and politicians stay out of pension management. The results of pushing the savings of the average worker into the hands of the financial services industry is all too clear now. We need a solvent pension system and Social Security System now more than ever. Small basic corrections will provide the security our nation of non-savers requires.

    Posted by: Dan C | March 27th, 2010 at 8:13 am

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