Superstorm Sandy’s economic and election impact

Here is a link to my appearance on AirTalk with Larry Mantle today. 

Superstorm Sandy is headed north, and for much of the East, the worst is over. But with extensive flooding and major damages to several big cities lining the coast, this is just the beginning of a long entanglement with the storm and the wake of destruction it left.

Power outages are affecting millions of East Coast homes and businesses, New York City subways and tunnels are flooded, underground garages have filled with water, and cities up and down the coast are littered with debris from the storm. Because cities like New York don’t see storms of this caliber often, Sandy came as a surprise, even to local hospitals, whose backup generators began failing last night, forcing evacuations. Even though the storm is passing and the sky is clearing, rescue and rehabilitation efforts are sure to take a good deal of time and money for the cities hardest hit by the storm.

What will the economic impact be for cities whose public services have been damaged by Sandy? How long will relief efforts take, and at what cost? What effect, if any, will this have on the presidential election next week?

Guest:

Jessica Levinson, Professor of Law, Loyola Law School; Research focus on election law and governance issues

Gregory Daco, U.S. Economist, IHS Global Insight

Sandy & Election 2012

Scheduled to be on "AirTalk" today at noon talking about the affect of Sandy on the election.

Do Ballot Initiatives Foster the Darker Side of Political Spending?

Californians will soon go to the polls to weigh in on no less than eleven ballot initiatives. These initiatives could change the law on everything from the death penalty to the labeling of food.

I have previously written here about the pitfalls of the initiative process. This mechanism of direct democracy, designed to guard against the power special interests held over our elected officials, is now similarly controlled by special interests. Money is the driving factor behind which proposals qualify for the ballot.

Large sums are spent not only to pay signature gatherers to get proposals placed on the ballot but also to support or oppose those measures once they qualify for the ballot. One need only to open the mailbox or certain websites, or turn on the television or radio, to see the enormous amounts of money being spent to attempt to sway voters on these eleven initiatives.

Last week I wrote about a large donation, $11 million to be exact, given by an Arizona non-profit corporation to two ballot measure committees in California.

This post is, in part, an update on events that occurred last week. Currently members of the voting public only know that a group called "Americans for Responsible Leadership" donated that large sum to a committee opposing Proposition 30 and supporting Proposition 32. Proposition 30 is Governor Jerry Brown's tax initiative. The initiative would raise income taxes on high wage earners and sales taxes for all and put that increased revenue towards public education. (I previously discussed Prop 30 here) Proposition 32, while styled as good government reform, is in fact an effort to reduce the political power of unions in California. (I wrote about Prop 32 here).

Other than the name of the organization, the place it "resides," and the committees to which it donated money, the public knows little to nothing about Americans for Responsible Leadership. In an effort to give the public vitally important information about the identity of this organization, the State's political watchdog organization, the Fair Political Practices Commission (FPPC) sued the organization.

The court held a quick procedural hearing last week, and will hold a hearing on the merits of the case next week, one week before the election. It remains to be seen whether the public will obtain information about this group before the election. I am, however, hopeful that this experience and the quick actions by the FPPC will prevent this scenario from repeating election after election.

Read this post on KCET.org. 

Large, Undisclosed Sums Given to Support or Defeat California Ballot Initiatives

The outcome of 11 ballot initiatives on the November 6 statewide ballot hangs in the balance. One thing is already clear: The amount of money being given and spent to urge members of the electorate to vote "yes" or "no" on these measures is significant. A report published last week puts the amount of money given in favor of and against ballot measures at almost $300 million.

And this money is not divided evenly among the eleven ballot measures. A number of wealthy individuals have given large sums to support certain ballot measures. Attorney Molly Munger, for instance, has given almost $33 million in support of her proposed ballot initiative,Proposition 38, which would raise the income tax on most Californians and put that increased revenue into the public school system. (For more on it and and the competing proposition, Prop 30, read this article on KCET's Ballot Brief.)

It is important to note that the $300 million figure reflects money given to ballot measure committees more than two weeks before the election. We can only expect that figure to rise as the election nears (Ballot Brief updates who's funding what a couple times a week. Keep trackhere).

Because of a number of Supreme Court decisions, the amount of money spent to get voters to vote "yes or "no" on ballot measures (not to mention to elect or defeat candidates) is unlikely to ebb. At least in the short term, it seems likely that the only way to regulate money flowing throughout the political marketplace will be to disclose the source and use of that money.

But last week a non-profit group based in Arizona gave $11 million to committees supporting or opposing two California ballot initiatives. From my perspective, the problem is that we know very little about this group. If, as the Supreme Court says, money is the equivalent of speech, then the identity of the speaker is vitally important. It is human nature to weigh an argument based on the identity of the speaker. Such information helps people to determine why an individual or entity would spend large sums concerning ballot measures. Without proper disclosure, the electorate is left only with the message funded by such donations, but not the source of that message.

Finish reading this post on KCET.org. 

Campaign watchdogs say Arizona group's $11 million donation exploits loophole in California law

Quoted in this article in the Sac Bee. 

Here is an excerpt:

In California's ever-expensive ballot wars, voters typically know who funds advertisements that hold great sway with the electorate.

But that may be changing.

An Arizona-based nonprofit named Americans for Responsible Leadership gave $11 million this week to defeat Gov. Jerry Brown's tax initiative and curb unions' political power without saying where a single dime originated.

Read more here: http://www.sacbee.com/2012/10/18/4920421/campaign-watchdogs-say-arizona.html#storylink=cpy

Campaign watchdogs say such donations exploit a loophole in California campaign finance law. Nonprofits can shield donors as long as money was never earmarked, with the burden of proof falling on state regulators already deluged with work.

"It is vitally important information for the public," said Jessica Levinson, a professor atLoyola Law School who formerly worked at the watchdog group Center for Governmental Studies. "The identity of a speaker allows the public to evaluate the credibility of the claims that are made by using this money."

Read more here: http://www.sacbee.com/2012/10/18/4920421/campaign-watchdogs-say-arizona.html#storylink=cpy

News from Cal: State measure spending among highest yet

Quoted in this piece in the SF Chronicle. 

Here is an excerpt:

Identifying supporters

Ann Ravel, chairwoman of the California Fair Political Practices Commission, which oversees campaign contributions and spending, said she is more concerned with the disclosure of donors than with the amount of overall spending.

"As long as the information is disclosed and people know who is spending to support or oppose ballot measures, it's hard to say that it's corrupting, which I think is the issue of campaigns," Ravel said.

But Jessica Levinson, an associate clinical professor at Loyola Law School who follows money in politics, said high spending is both a fact of life in modern campaigns and a problem.

"The amount of money being spent in campaigns is really overwhelming," she said. "It gives the impression that politics is a game for monied interests. I think it drowns out other voices."

Levinson said it's not realistic to try to lessen the amount of money spent, given the U.S. Supreme Court's ruling that money is the same as speech, but she said federal entities including the Internal Revenue Service and the Federal Election Commission should be stricter about what qualifies as a nonprofit that does not have to disclose donors.

 

Campaign watchdogs say Arizona group's $11 million donation exploits loophole in California law

Quoted in this one in the Sac Bee. 

Here is an excerpt: 

In California's ever-expensive ballot wars, voters typically know who funds advertisements that hold great sway with the electorate.

But that may be changing.

An Arizona-based nonprofit named Americans for Responsible Leadership gave $11 million this week to defeat Gov. Jerry Brown's tax initiative and curb unions' political power without saying where a single dime originated.

Campaign watchdogs say such donations exploit a loophole in California campaign finance law. Nonprofits can shield donors as long as money was never earmarked, with the burden of proof falling on state regulators already deluged with work.

"It is vitally important information for the public," said Jessica Levinson, a professor atLoyola Law School who formerly worked at the watchdog group Center for Governmental Studies. "The identity of a speaker allows the public to evaluate the credibility of the claims that are made by using this money."

Read more here: http://www.sacbee.com/2012/10/18/4920421/campaign-watchdogs-say-arizona.html#storylink=cpy

Does Bad Behavior Turn Off Voters?

Last week two debates between federal candidates made national news. The first was, of course, the Vice Presidential debate between incumbent Joe Biden and Congressman Paul Ryan. As I watched both the debate and my twitter feed a few things became clear. First, this was a much livelier debate than the first presidential debate between President Barack Obama and former Governor Mitt Romney. Second, we were going to spend a good deal of time talking about Biden's smiles, chuckles, tone, and other mannerisms.

This is another way of saying that we judge candidates on their appearances and affections all of the time. Many of us spent a good deal of time talking about the fact that in the first debate it looked like President Obama might want to be somewhere else. Substance matters, but appearance and style matter as well. But what happens when two candidates agree on most of the substance but have markedly different styles?

Well, that brings us to the second debate to capture national media coverage: the matchup between incumbent Congressmen Howard Berman and Brad Sherman. This has been a nasty race from the beginning. The two Democrats from the San Fernando Valley were drawn into the same district, thanks at least in part to the fact that an independent redistricting commission drew legislative lines for the first time in the state's history. In addition, because of the new top-two electoral system, two candidates of the same party can faceoff in the general election as long as they received the greatest number of votes. The two also share many of the same political positions.

The public has become all too accustomed to politicians behaving badly. By which I mean they call each other names, stretch the truth, and figuratively sling mud at each other. But a funny thing happened at the debate between Berman and Sherman last week, that figurative slinging of mud almost turned literal. At one point Sherman put his arm around Berman and aggressively questioned, "You want to get into this?"

Berman and the public should say "no." We most definitely do not want to get into "this" if "this" means physical altercations between political candidates. Our system of government is set up to allow for a robust, and at time contentious debate about the issues. Physical altercations are, to be charitable, counterproductive and feed into the dislike and distrust of politicians. Schoolyard squabbles have no place in political campaigns.

Find this post on KCET.org. 

Candidates must stay cool or face Brad Sherman-Howard Berman-style YouTube moment

Quoted in this piece re Berman v. Sherman.

Here is an excerpt:

Embarrassing video moments would seem to hurt mainly the candidates caught in them. But Jessica Levinson, an associate professor at Loyola Law School who studies election law, said such episodes can also reinforce voter disgust with politicians in general, making them a wash.
...
But the upside of the always-on media world is that there will surely be another scandal to feed the 24-hour news cycle. Election Day is 3 1/2weeks away -- an eternity in YouTube terms.

"Voters do to a certain extent have amnesia or the ability to look the other way," Levinson said.

By Election Day, she said, some voters might remember that there was some sort of scuffle between Sherman and Berman, but forget the details. But Berman could try to keep it in their minds by buying campaign ads, Levinson added.

Will Two Competing Tax Initiatives Spell Loss at the Ballot Box for Both?

As most Californians who follow politics know by now, there are two measures on the November 2012 ballot, which, if passed, will increase taxes to fund public education.

The first is Proposition 30, Governor Brown's tax measure. This ballot measure would temporarily increase the sales tax by a quarter of a cent and increase income taxes on those making above $250,000. The increased revenue would go to fund public education. Last year's budget was passed assuming that Prop 30 will pass. If Prop 30 does not pass, so-called trigger cuts to education will go into effect.

Brown tried a number of times, to no avail, to get the needed two-thirds of both legislative houses to agree to his tax proposal. Finding no success in the legislature he is going directly to the people through the ballot initiative process.

But Governor Brown was not the only one with an idea to increase taxes to fund education. Attorney Molly Munger, the daughter of uber-wealthy Charles Munger, the vice-chairman of Berkshire Hathaway, had a proposal of her own. Munger paid to gather the signatures to get Proposition 38, the competing tax measure, on the ballot. Prop 38 would raise income taxes on almost everyone in California and would also put the increased revenue toward public education.

There are a number of differences between the two measures, and I do not purport to give anything here but a very high level overview of the two proposals.

I believe there should be something disturbing about Proposition 38. Even if you whole-heartedly agree with the substance of that proposal, its route to the ballot is an uneasy one -- at least for me. Prop 38, like so many other ballot initiatives, was put on the ballot by someone elected by no one, and arguably accountable to no one.

If Munger's purpose is a broad one -- of increasing taxes to fund education -- it may have behooved her to put the tens of millions she is putting into supporting Prop 38 (and opposing Prop 30) into supporting Prop 30.

Voters now face what may be a confusing choice between two competing measures purporting to do a similar thing through similar means. It seems to me that this was a missed opportunity for two individuals with comparable goals to use a terribly imperfect process to achieve a common aim. Instead Munger tread her own path, and with it, risks losing not only her personal battle, but what seems to be from a general perspective, her larger war.

Finish reading this post on KCET.org. 

Blue Shield's union ties raise concerns about conflicts

Quoted in this piece in the Los Angeles Times. 

Here is an excerpt:

At a time when public-sector unions across the country are fighting to hold on to generous retirement and health benefits, one of the loudest voices standing up for their rights is Dave Low.

A longtime labor activist, Low carries considerable clout as executive director of the California School Employees Assn., a 215,000-member union that represents bus drivers, custodians and other school workers. He also leads a broader group of 1.5 million government employees, including firefighters, police and teachers, called Californians for Health Care and Retirement Security.

But Low had another job as well until recently. He was a consultant for Blue Shield of California, which has secured lucrative health insurance contracts that cover many of the same public workers that Low represents. His contract shows he was to be paid up to $125,000 a year for his work, which went from 2004 until Aug. 31.

Low isn't the only person with union ties pulling double duty for Blue Shield. One of the insurance company's senior executives also works as a lobbyist for the Service Employees International Union, which represents nearly 300,000 government workers statewide.

Experts say those close ties between Blue Shield and key labor unions may give the nonprofit company undue influence over multimillion-dollar insurance contracts for public employees. It's common in California for a joint panel of labor and management officials to pick the winning insurance bidders and set many of the terms.

"This raises red flags about conflicts of interest and self-dealing," said Jessica Levinson, a Loyola Law School professor who studies public corruption. "It really starts to feel offensive when the public money at stake is so huge."

Details behind Yaroslavsky's 2004 Super Bowl tickets in dispute

Quoted in this piece in the Los Angeles Times. 

Here is an excerpt:

Good-government advocates say politicians should never use their office to land tickets and other perks unless there is a clear public benefit.

"Public officials are public servants, and they should be serving and representing their constituents, and not using their office to get perks like tickets to sporting events," said Jessica Levinson, a Loyola Law School professor who studies public corruption.

O.C. High School Students Find Balance in Politics & Money

Last week I had the pleasure of speaking to hundreds of high school students for a "Constitution Day" event in Orange County. My topic was the influence of money on political campaigns.

I made a few observations, which may or may not give us some insight into future members of the California electorate.

Cynicism Abounds

First, my perception is that this was a smart, engaged group who were disillusioned by the influence of money in politics. Some students voiced their feelings that contributions and expenditures are a form of legalized bribery; most agreed that people give campaign contributions and make independent expenditures to get something in return from a candidate.

Second -- again with the caveat that this is just based on my perception of the conversation -- many of the students seemed to believe that candidates and elected officials are amenable to the needs and interests and campaign donors and those who make independent expenditures on a candidate's behalf. It was, seemingly, assumed that elected officials would be in some way indebted to those giving them large sums, or spending large sums on their behalf.

In sum, the students appeared to take it as a given that people give and candidates receive with the understanding that this money is part of a type of business deal. Money is given and spent, and a favor is expected and granted in return.

Money May Talk

While many of the students agreed that money caused problems in the political and electoral processes, many also agreed that money helps candidates reach voters. Students voiced concerns that if the use of money in campaigns was too severely limited it would silence the ability of donors, candidates, or independent spenders to disseminate their messages.

Solutions

In essence the students hit upon the delicacy of the balance that must the struck when creating campaign finance regulations. On one hand, there are significant, compelling, and/or important governmental interests weighing in favor of restricting the use of money in political campaigns. On the other hand, money was and is still needed to help disseminate one's message.

Finish reading this post on KCET.org.