Freedomnomics: Why the Free Market Works and Other Half-Baked Theories Don't by John Jr. (books that read to you TXT) 📕

of Nontransferable Property Rights on the Efficiency of Political Markets: Some Evidence,” Journal of Public Economics , vol. 32, no. 2, March 1987, 231-246. Jeffrey Milyo and Timothy Groseclose, “The Electoral Effects of Incumbent Wealth,” Journal of Law and Economics, 1999, 699-722. Jeffrey Milyo, “The Economics of Political Campaign Finance: FECA and the Puzzle of the Not Very Greedy Grandfathers,” Public Choice, December 1997, 245-70.

24 Much of the discussion in this section is based on John R. Lott, Jr. “Campaign Finance Reform and Electoral Competition,” Public Choice, 2006.

25 Given that many state senate races will involve candidates who have held previous elected office, the arguments discussed here can apply even when there are no incumbents in a race. Similarly, the advantage possessed by incumbents will be mitigated to some extent when challengers have held other offices such as the state assembly or city council.

26 This discussion is based on John R. Lott, Jr., “The Effect of Nontransferable Property Rights on the Efficiency of Political Markets: Some Evidence,” Journal of Public Economics, vol. 32, no. 2, March 1987: 231-246; John R. Lott, Jr., “Brand Names and Barriers to Entry in Political Markets,” Public Choice, vol. 51, no. 1, 1986: 87-92; and John R. Lott, Jr., “Explaining Challengers’ Campaign Expenditures: The Importance of Sunk Nontransferable Brand Name,” Public Finance Quarterly, vol. 17, no. 1, January 1989: 108-118.

27 Norman J. Ornstein, Thomas Mann, and M.J. Malbin, Vital Statistics on Congress: 2001-2002, (Washington, D.C.: The American Enterprise Institute, 2002). Reed and Schansberg found that the U.S. House of Representatives experienced a large, sudden increase in tenure during the mid-1970s. After examining alternative explanations such as increased gerrymandering or increased congressional compensation, they concluded that the increase in tenure length arose from suddenly “greater incumbent advantages as the source,” (198). W.R. Reed and D.E. Schansberg, “The Behavior of congressional Tenure Over Time: 1953-1991,” Public Choice, 1992, 183-203.

28 John R. Lott, Jr., “Campaign finance reform and electoral competition,” Public Choice, 2006, 263.

29 McCarthy raised a total of $11 million in 1968, an amount that was equivalent to almost $55 million in 2000. By contrast, George Bush had raised $67 million by the first primary in 2000. George Thayer claims that “The bulk of McCarthy’s campaign funds came from a wealthy few.” See George Thayer, Who Shakes the Money Tree, (New York: Simon and Schuster, 1974) 92. Among those making these donations were Stewart Mott, Jack Dreyfus and his wife, Marin Peretz, Ellsworth Carrington, and Alan Miller. “David Hoeh, the organizer of McCarthy’s New Hampshire campaign, recalled later that a single ‘financial angel’ saved their media effort at a crucial point” (CATO, A Free Speech Kind of Thing, http://www.cato.org/pub_display.php?pub_id=5331). For information on the number of donors giving to Bush see Michael Isikoff, “The Money Machine,” Newsweek, January 24, 2000, 46.

30 Four years later, George McGovern was able to continue his 1972 presidential primary campaign against four other senators, several congressmen, and a governor solely thanks to extremely large donations from a single person, Stuart Mott. Mott provided McGovern with a total of almost $600,000 ($212,361 in donations and $377,500 in loans that were likely forgiven). See “Who’s Who Among the Big Givers,” Time, October 23, 1972.

31 If regulations reduce the amount raised and spent on campaigns, the benefit for incumbents will decline the longer the rules are in effect, though the initial impact will never be offset. While equal reductions in spending during the election benefits the incumbent because of his relatively large stock of reputation, over time as restrictions affect the amount raised and spent in more and more of an incumbent’s past elections, the stock of reputation that the incumbent has in future elections will decline, thus somewhat reducing the gap between the incumbent’s and the challenger’s total reputation.

32 The case was Victoria Jackson Gray Adams, et. al. v the Federal Election Commission, et. al. The brief was largely based on an article Stratmann had co-authored with Francisco Aparicio-Castillo, “Competition Policy for Elections: Do Campaign Contribution Limits Matter?” Public Choice (2006).

33 Given his assumptions, Stratmann’s theory holds true for cases in which a well-qualified candidate competes against a lesser qualified one. But in races between two candidates of equal quality, reducing the amount of available information about the candidates would increase win margins and lower competitiveness.

34 “Bowen wants changes to initiative system,” Sacramento Bee, September 6, 2006.

35 John R. Lott, Jr., “Campaign finance reform and electoral competition,” Public Choice, 2006, 263-300. The information on expenditure limits is available in an earlier working paper version of that paper.

36 Ibid. States with such regulations for state offices during at least part of the period examined by that study included: California, Colorado, Hawaii, Maine, Massachusetts, Minnesota, Nebraska, New Hampshire, Oregon, Rhode Island, Vermont, West Virginia, and Wisconsin.

37 Levitt and Dubner, Freakonomics (2005 Ed.), 11-12.

38 Congressional Quarterly’s CQPolitics.com offers an analysis of the 60 races determined by less than 10 percentage points (http://public.cq.com/public-content/2007Jan3-Chart.pdf). There are some uncontested races where fund-raising levels will generally not affect the races’ outcome. In these races, however, incumbents will often raise money to assist other candidates from their party. Thus even in uncontested races fund-raising can still be productive.

39 Http://www.nydailynews.com/front/story/485008p-408347c.html.

40 “Clinton Enters ’08 Field, Fueling Race for Money,” New York Times, January 21, 2007.

41 For a small selection of this research see: Gary C. Jacobson, Money in Congressional Elections, (New Haven: Yale University Press, 1980); Kevin Grier, “Campaign Spending and Senate Elections, 1978 - 1984,” Public Choice, December 1989,201-19; Gary C. Jacobson, The Politics of Congressional Elections, 2nd ed. (New York: Little, Brown, 1987); John R. Lott, Jr., “The Effect of Nontransferable Property Rights on the Efficiency of Political Markets: Some Evidence,” Journal of Public Economics, vol. 32, no. 2, (March 1987): 231-246; and John R. Lott, Jr., “Explaining Challengers’ Campaign Expenditures: The