Freedom Line Blog

Political Wire has the astounding sums failed gubernatorial candidate Meg Whitman (R-CA) paid to campaign consultants last year.

Key staffers: Campaign manager Jill Hasner ($948,000); senior adviser Jeff Randle ($550,000); finance director Sara Myers ($439,438); deputy campaign managers W. Todd Cranney ($389,000) and Tucker Bounds ($324,572.)

Overall, the campaign cost Whitman $178 of her $1 billion+ fortune.  All that to lose by 13%; how much to lose by 20%?

Politico usefully rebukes the conventional wisdom about money in politics with a look at this year’s self-financing candidates:

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The one winner in the group is Republican businessman Ron Johnson, who beat Sen. Russ Feingold (D-Wis.), one of the Senate’s most ardent champions of campaign finance reforms that would limit the role of big money in federal races.

In Connecticut, Republican Senate nominee Linda McMahon spent $47 million of her own money. In Florida, Jeff Greene dropped $24 billion attempting to get the Democratic nomination for the U.S. Senate. In California, Carly Fiorina invested $5.5 million out of her own accounts for a shot at the upper chamber, though that number paled in comparison to the $143 million ponied up by the GOP gubernatorial nominee, Meg Whitman. What do they all have in common? They all lost.

For the professional fretters who rent their garments in support of McCain-Feingold and gnashed their teeth over the Supreme Court’s Citizens United decision, there’s a valuable lesson here: money buys you the means to make your case, not the right to have that case accepted by the voters. Big money in political races can be just as much a drawback as an advantage. And if you don’t believe that, just ask the organized labor establishment, whose investment in this year’s races turned out to be a toxic asset.

For political observers looking for a glimpse into former e-Bay CEO and current gubernatorial candidate Meg Whitman’s (R-CA) job creation plan, a 34 page glossy magazine is available for free download (pdf) or delivery.  As both a PR document and a policy manual, the plan is impressive.  After listing the parade of economic horrible facing the Golden State, Whitman moves into prescription mode promising to promote tax cuts and streamline regulations that impede business.

Implementing any of these measures would help California.  Enacting all of them might actually save the state from financial collapse.  However, there is one addition I’d like to see that’s currently missing.

Tell the voters that governments can only create one type of job directly: a government job.  Whether it is a formal state position, a job that is made necessary to comply with a regulation or one to get a government contract, all of these jobs redirect talent and resources towards expanding the tax burden by increasing government spending.

A more sustainable model is implementing the kinds of policies Whitman is pushing; policies that create a tax and regulatory environment favorable to private sector job creation.  The more private sector jobs created means more people have more money, allowing government to lower tax rates while providing the same level of services.

In reality, Whitman as governor can’t create directly a single private sector job without picking winners and losers.  Instead, the most (and the best) she can do is create the conditions for success that allow private business to flourish and add workers.  Who better to educate the public on that point than a person with top-level business executive experience?

Buried amidst the landslide primary victories of GOP candidates Meg Whiteman (governor) and Carly Fiorina (U.S. Senator) is a far more consequential vote.  The passage of Proposition 14, the ballot measure that abolishes partisan primaries in favor of a top-two run-off in a general election, is not the panacea its supporters claim.  Then again, many of the people who voted for it aren’t sure what it will do anyway.  From the New York Times:

That no one actually knows what the real effect of Proposition 14 will be seems almost beside the point to frustrated voters. What mattered, supporters said, is that something fundamental about politics — anything fundamental — had been changed.

As supporters celebrated, they promised to bring the so-called “top two” system to a state near you, with Gov. Arnold Schwarzenegger leading the charge — though his second term, plagued by budget meltdowns and plunging popularity, was, analysts said, one of the leading motivators for the measure.

Whether the measure will empower more independent voters — who were already allowed to vote in Democratic or Republican primaries, provided they requested a ballot — remains to be seen. But what did seem certain was that California was again poised to capture the mood of the country, just as it did in 1978 with Proposition 13, which distilled widespread antitax sentiment into a cap on property taxes.

This time, it is the anger of the electorate that Californians have bottled, experts said, even if they are not totally sure what they are doing.

This kind of thoughtless voting was the same motivating factor in passing the Golden State’s term limits measure in 1990s and the electorate’s more recent decision to have an unelected commission draw legislative and congressional districts.  Like Proposition 14, both have the effect of minimizing accountability by shifting power away from publicly elected officials toward staff, lobbyists, and moneyed insiders.

Perhaps the greatest irony of all is that in modern California politics Proposition 14 is likely to have zero effect on which two candidates are selected to run in the general election.  For over a decade the Republican and Democratic nominations have gone to those with high name recognition and/or independent wealth.  Whitman and Fiorina had tremendous advantages as a billionaire and multi-millionaire, respectively, and benefited enormously from establishment support that cut off their opponents’ ability to raise funds.

When Proposition 14 is implemented in 2011, they still will – only this time the decisions will take place not in an open, voter decided forum, but in informal discussions among special interest groups picking their candidates and clearing the field.

So, way to go California!  By voting for less structure you’ll get less control.  Maybe next year someone will qualify a ballot measure to abolish the legislature and let every citizen decide every issue by popular vote.

What could go wrong?

One of the curious things about business people turned political candidates is how much they retain the language of commerce, yet shuck its practice.  The best example is of self-funded multi-millionaires (or billionaires) spending gobs of their own money at an unsustainable clip while excoriating career politicians for being fiscally irresponsible.  Although you can’t run a government exactly like a business, the notion that spending should match revenue is perhaps the one financial concept that applies to any endeavor not operating on the barter system.

All of which makes a Republican candidacy like Meg Whitman’s for California governor so paradoxical.  Like her political mentor, Mitt Romney, Whitman is loaning her campaign tens of millions of dollars from her personal wealth to fund her run.  The money is going to support a top-notch staff, endless media buys in California, and a slick website.  It is not, apparently, attracting an equal amount of financial contributions from people with a different bank account.  So, in order to make it to the June primary, Whitman will have to cut herself another check.

That approach won’t fly as governor.  One of the chief criticisms of Whitman’s campaign narrative is that she can’t fire underperforming bureaucrats and politicians in Sacramento the way she did as CEO of Ebay.  Now, it looks like her candidacy can’t muster enough popular support to prop up her big spending ways.  Californians already have a political class accustomed to spending money without regard to sustainability.  It is a lesson with consequences they don’t need to learn from a governmental rookie.