2024 Presidential Election Prospects

 

               It’s a little early to be handicapping the 2024 presidential election, but there are some things that we can reliably expect.  Assuming the race is between any Democrat and any Republican, California is going to vote for the Democrat and Idaho is going to vote for the Republican.  If they don’t, then – wow!  Something really unexpected will have happened.  Given the state-by-state results of the 2020 Biden-Trump race and polls showing little change in the (un)favorability of both candidates, we can narrow down the swing states to seven: Pennsylvania, Georgia, Arizona, Wisconsin, Nevada, North Carolina, and Michigan.  These seven are the only states where the difference between the candidates’ 2020 votes are less than 3%.  On rare occasions, a state's results will change more than that in the course of four years, but it's rare, and in 2024, we're looking at a rematch of candidates.

               One might reasonably eliminate Michigan and North Carolina from the list of swing states though.  If Trump is able to win Michigan, it is likely he’ll win enough other swing states to secure a victory.  A Trump victory in Michigan probably would require a Republican wave election.  The reverse is likely to be true if Biden is able to win North Carolina.  It would mean a Democratic wave election, but more on this below. 

Realistically, the electoral math gives us only five true swing states:  Pennsylvania, Georgia, Arizona, Wisconsin, and Nevada.  Setting aside these states, Biden can count on 241 Electoral College votes and Trump can count on 235.  Biden will need 29 more to get to 270 and win reelection.  Trump will need 34 more to get to 269 and tie the vote.  With a tied vote, the final result will be determined by a majority of state legislatures, giving Trump the victory. 

So, what are the paths to victory for Biden and Trump?  Simply put:

Biden needs: [PA & (GA v AZ v WI)] v (GA & 2 swing states).

Trump needs: (PA & GA) v (PA & 2 swing states) v (GA & AZ & WI).

The current Electoral College math is in Biden’s favor, but each of these states was extremely close in 2020.  With so much time until Election Day, anything can happen in any of those states.  Much will depend on the local politics in each swing state.  Let’s turn to that.

NEVADA

Biden’s best chance for winning a swing state is Nevada and it’s a very good chance.  Despite its vast expanse of uninhabited land, Nevada’s population is extremely urban which favors Democrats.  In 2020, 69% of the voters lived in Clark County, home of Las Vegas.  Another 8% lived in Reno and in towns near Lake Tahoe.  Biden won Clark County by 90,822 votes and won the state by 33,596 votes.  Clearly, Biden’s victory was due to his performance in the Las Vegas metro area.

Historically, Nevada looks good for the Democrats.  They have won all the statewide races since 2016, except for the Attorney General race in 2018 which they lost by a mere 0.66%, and the 2022 gubernatorial race which they lost by 1.5%.  Their record in statewide races against Republicans is 8-2.  Of course, the best news for the Democrats is that Trump lost in both 2016 and 2020 by 2.42% and 2.39% respectively.

The 2022 race should give the Democrats pause, though.  Not only did the Republicans win the gubernatorial race, but their House candidate in District 1 (essentially Las Vegas) did much better than usual.  He still lost, but he did well enough to flip the aggregate votes in the House races to the Republicans.  Republican House candidates beat Democratic House candidates by 3.49%. 

If Biden can maintain even half of his 2020 advantage in Clark County, he'll almost certainly win Nevada.  Unfortunately for Biden it will do little to reduce the paths that lead to a Trump victory.  While Nevada might come into play, because it provides only six Electoral College votes, it just isn't terribly important. 

PENNSYLVANIA

               Biden’s second-best chance is Pennsylvania.  Trump defeated Hillary Clinton in 2016 by a mere 0.75%, but he was defeated by Biden in 2020 by 1.17%. That tells you how close this election could be.  A couple things give Biden a slight edge in Pennsylvania. Voters soundly rejected Trump-endorsed candidates in 2022.  Mehmet Oz lost his bid for the Senate by 5.03% and Doug Mastriano lost his bid for governor by a whopping 15.4%.  Like in Nevada, Democrats have an 8-2 record in Pennsylvania statewide races since 2016 (Trump and Sen. Pat Toomey by 1.5%, both in 2016).  Unlike Nevada, Pennsylvania Republicans have a better record in voting for House candidates.  Pennsylvania seems to swing back and forth in the aggregate vote for Republican and Democratic House candidates.   

               Republicans also can take some comfort in a report in Politico that says many people in the State Party – and possibly the Biden campaign – are critical of the performance of the chair of the State Party, but thus far, I find no substantiation of the report which is based on unnamed sources.

The Pennsylvania House of Representatives is dead even right now.  All of the House members will be up for election in 2024.  That could make abortion access an important issue in the state and help Biden.  We’ll also get a clue about the importance of abortion access to Pennsylvania voters this November, when they vote in a special election for a Supreme Court judge.

If Biden wins Pennsylvania, Trump will need to win Georgia, Arizona, and Wisconsin.  If Trump wins Pennsylvania, Biden will need to win Georgia and any two swing states. 

GEORGIA

               Here’s another squeaker.  Trump beat Hillary Clinton by 5.13% in 2016 and lost to Biden by only 0.24% (11,779 votes).  The Republicans out-polled the Democrats in statewide races 7-4, and none of the Democratic wins were by more than 2.81%.  The 2.81% win was against Hershel Walker, possibly the most unqualified candidate running for national office that year.  Additionally, Republican House candidates consistently out-perform Democratic House candidates statewide. 

Democrats should not let themselves become overconfident because of Biden’s success in 2020 and their recent narrow victories in Senate races by Jon Ossoff and Raphael Warnock.  What should give them some solace is that Governor Kemp, Secretary of State Brad Raffensberger, then-Lt. Governor Geoff Duncan, and Attorney General Christopher Carr (all popular Republicans) have testified against Trump before the grand jury in Trump’s Fulton County RICO trial.  We can expect them to be called to testify again at the trial.  A lot will depend on the RICO trial and how it’s covered in the Georgia press.

Democrats can also find comfort in that the GOP in Georgia appears to be quite divided.  Some of its past officers are actually defendants in Trump’s RICO trial.  Another is identifiable as an unindicted co-conspirator.  As a result, Trump is not likely to get coordinated support from the Georgia Republican political class, and when a substantial portion of prominent Republicans say that moderates and independents aren’t going to vote for Trump, it just might become a self-fulfilling prophecy.  

               If Biden wins Georgia, Trump will need to win Pennsylvania and two swing states.  If Trump wins Georgia Biden will need to win Pennsylvania and either Arizona or Wisconsin.

ARIZONA

               Arizona is a completely crazy political mess.  The statewide races are pretty evenly split, but slightly favoring Democrats 6-4-1.  (The 2022 Attorney General race was decided for the Democrat by 280 votes!  For present purposes, I consider that a tie.)  Moreover, a lot of Arizona voters often opt for third party or independent candidates.  If Sen. Krysten Sinema decides to run as an independent, there’s no telling how she will affect the presidential race.  

               A couple things might help the Democrats.  The Republican State Party is a big part of Arizona’s crazy political mess.  Earlier this year, Republican first-term State House Member Liz Harris was expelled from her seat by a 2/3 majority for knowingly arranging for the false and potentially libelous testimony of a hearing witness.  In response, the pro-Trump/Kari Lake faction of the Party censured 18 Republican House members who voted for Harris’s expulsion.  They even censured two more who voted against expulsion, but acknowledged that Harris violated the House’s ethics rules.  The pro-Trump faction also censured the Maricopa County Board of Supervisors for not reinstating Harris.  There may be no Republican State party in the country so divided as in Arizona.

               Another thing that might tip the balance in favor of the Democrats is a ballot measure that pro-abortion access groups are looking to put on the ballot.  If they succeed – and I know of no reason they won’t – it will be a lot easier to get unenthusiastic Democratic voters out to vote.  It might just be what tips the balance to Biden.  Still, Arizona’s politics are complicated beyond description, so anything could happen.  

If Biden Arizona, his chances of winning are of course improved, but not by much. The same is true for Trump.  Pennsylvania and Georgia are the big players in the Electoral math.

WISCONSIN

While not completely insane like Arizona, Wisconsin is razor, razor close. Together, the last two presidential races in Wisconsin were closer than anywhere else in the country.  Trump beat Hillary Clinton by a mere 0.77%, but then Biden beat Trump by even less: 0.36%.  The Democrats do have a 7-3 record in statewide races.  Two of the Republican wins are attributable to just one politician, Sen. Ron Johnson who won his last race by just 1.01%.  That bodes well for the Democrats.  Like Pennsylvania, the aggregate vote for Republican and Democratic House candidates swings back and forth, so it’s hard to gauge just how much of an advantage anyone might have there. 

Republicans are having difficulty recruiting a candidate to challenge the popular Sen. Tammy Baldwin in 2024.  Their two top potential candidates have decided not to run.  Other potential candidates are relatively unknown, with the exception of former Milwaukee County Sheriff and Trump supporter David Clark.  Clark has taken no steps toward running.  Without a strong, well-funded Republican Senate candidate on the ballot, Trump will be on his own to get out the Republican vote.

As elsewhere, the abortion access issue might help Democrats in Wisconsin.  Wisconsinites came out strong in an April special election for a progressive Supreme Court candidate.  Janet Protasiewicz ran primarily on the promise to protect abortion access.  She won by 11%.  Only Sen. Baldwin in 2018 racked up a score like that.  While not a high-profile race, Protasiewicz’s victory raises the Democrat’s statewide record to 8-3 and could be a harbinger of the future.

Wisconsin was historically part of the Democrat’s “blue wall.”  Whether Trump’s 2016 victory and his near miss in 2020 have changed that remains to be seen; but like Arizona, there’s no telling what will happen in Wisconsin – at least for now. 

As with Arizona, winning Wisconsin is helpful for either Biden or Trump, but not that much.  Keep your eyes on Pennsylvania and Georgia.

 NORTH CAROLINA

               I began this review with the assumption that North Carolina is certainly enough a Republican state as to be not included in any possible Biden path to victory.  I don’t seriously doubt that, but the methods I am using to determine swing states and to assess the two candidates’ chances yields a story more favorable to Biden.  Trump beat Biden by 1.34% which on my criterion would make North Carolina a swing state.  Furthermore, the Democrats’ record for winning statewide races is 6-4, which should give Biden some hope. 

A closer look, however, reveals that all of the statewide Democratic victories are for State-level offices (Governor, Secretary of State, and Attorney General), and all of the victories for the Republicans are for National-level offices (Senate and President). Additionally, Republican House candidates routinely out-perform Democratic House candidates by sizeable amounts.  It seems North Carolina voters like to put Democrats in charge of the State and send Republicans off to Washington.  I’m keeping North Carolina in the Trump column – at least for now.

MICHIGAN

               Considering Michigan as a swing state is the biggest stretch of all.  It’s probably as safe for Biden as Florida is safe for Trump.  Trump eked out a win in Michigan with 0.2% in 2016 and then lost to Biden by 2.78%.  The Democrats’ winning record in statewide races is 9-1.  Trump’s 2016 super-narrow victory was the only Republican victory.  Republican House candidates did out-perform Democratic candidates by 3.56% in 2016, but they never again beat the Democratic House candidates.  Finally, in 2022, Democratic Gov. Whitmer won her race by 10.6%, Democratic Secretary of State Jocelyn Benson won her race by 14%, and Democratic Attorney General Dana Nessel won her race by 8.9%. 

To further aggravate matters, the Republican State Party is suffering a deep ideological division (a common theme in swing states) and a severe lack of funding.  The Party’s chair is Kristina Karamo, an outspoken Trump supporter who lost the 2022 race for Secretary of State by 14%.  Karamo defeated Matthew DePerno to become the Party’s chair.  DePerno lost his 2022 race for Attorney General by 8.9% and has been criminally charged with due possession of a voting machine, willfully damaging a voting machine, and conspiracy to gain unauthorized access to a computer or computer system.  They represent two opposing wings of the Party.  At least two physical fights have broken out between Party officials.  

Republican donors have begun to give money to Michigan’s Republican House candidates through channels not under control of the State Party, which is so broke it closed its office and is operating out of a condominium unit.

The Michigan segment of the “blue wall” seems about as sturdy as ever.

CONCLUSIONS?

               Biden’s Electoral College advantage in the non-swing states gives him a head start, but for now Pennsylvania and Georgia look to be the where the race will be decided.  There’s a lot about the swing states that should give the Democrats hope.  In particular, the Republican State parties are often divided on ideological grounds and abortion access could continue to be a salient issue, but all of the swing states are extremely competitive with a lot of time left before Election Day.  Other issues could easily capture the attention of voters.  Inflation might increase again, the country might slip into a recession, the Russian war in Ukraine might disrupt geopolitics and the global economy, Trump’s legal troubles might take unexpected turns, issues related to immigration could fuel a nativist uprising, or other social issues could dominate the political discourse in ways that would change voter choices.   

What seems like an advantage now, might easily disappear overnight.  What isn’t likely to change is the importance of Pennsylvania, Georgia, Arizona, Wisconsin, and Nevada – or roughly 15% of our country’s population who will determine who our next president will be.  I guess that’s American-style democracy for you.

The Bodhicaryavatara / Santideva -- Crosby and Skilton, trans., Oxford: Oxford University Press, 1995

The eighth century Indian monk Santideva ranks among Buddhism's greatest writers.  His most important work is a ten-chapter poem entitled The Bodhicaravatara (Introduction to the Practice of the Bodhisattva) which concisely expresses the highest ideals and philosophy of the Mahayama tradition. 

The Four Noble Truths are rightly understood as a central -- if not the central -- concepts in Buddhism. Those truths are accepted and venerated by all Buddhists; however, for the Mahayana tradition, the concept of the bodhisattva is equally important.  The bodhisattva is a being that has vowed to forever work for the enlightenment of all sentient beings.  This amounts to a rejection of the earlier Buddhist traditions which sought to train monks to achieve their own individual enlightenment.  

The first step in following the path of the bodhisattva is "bodhicitta," i.e., taking a vow to seek the enlightenment of all sentient beings.  Santideva explores a distinction between two forms of bodhicitta: (1) making the determination to follow the path of the and (2) in fact setting out on the path of the bodhisattva.  He goes on to explain the characteristics of a bodhisattva which Buddhists have come to name "the six perfections:" generosity, obedience to the moral law, patience or forbearance, energy, meditative stability, and wisdom.  

The perfection of wisdom is the highest of these virtues.  Santideva provides a seminal treatment of wisdom in the nineth and longest chapter of the poem. Wisdom requires a bodhisattva both to exercise the other five virtues and it is necessary for the perfection of those virtues.  Most of all, gaining wisdom requires a true understanding of the world.  Crucially, this requires a deep and intuitive understanding of "sunyata," usually translated as "emptiness," and the understanding that all things are empty.  

Early Buddhist traditions do make mention of sunyata, but its first full expression appeared in the work of the second century Madhyamaka Buddhist writer Nagarjuna.  Santideva's treatment of sunyata is an excellent, concise treatment of Nagarjuna's formulation.

In the course of the work, Santideva presents a method by which one can develop compassion for others, known as "the exchange of self and others."  It is based on the idea that to achieve a sympathetic disposition toward all sentient beings, one should proceed in stages.  First, one should imagine that the well-being of someone you love, someone very close to you, is as important as your own well-being.  This should not be hard.  One should then go on to imagine the same is true for others not so close to you and then imagine the same for people for whom you have neutral feelings.  Finally, you should imagine that the well-being of people you dislike is as important as your own well-being.  By engaging in this exercise, one can develop compassion for all sentient beings and work more easily for their enlightenment. 

There are few works more important to the history of Buddhism than The Bodhicaryavatra. It is especially important to Tibetan Buddhism and is often mentioned by the Dalai Lama as the most influential work to his own thinking.    

Above Average Carbon Emitters Among Low Income Households

I recently did a little research attempting to understand the effects of Citizens' Climate Lobby's carbon fee and dividend proposal on people in the lowest quintile of income earners.  Below is the result of that research.

Above Average Carbon Emitters Among Low Income Households[*]

Alan Mattlage, Ph.D., M.L.S.

One of many strengths of Citizens’ Climate Lobby’s (CCL) carbon fee and dividend proposal is that it provides a net benefit to 86% of households in the lowest quintile of income earners (Ummel, 2016).  The progressive distribution of benefits is driven by the fact that lower income households tend to have lower than average carbon footprints but will receive a modified equal per capita share of the revenues from the fee (one share for each adult and one-half share for each child up to two children per family).  This makes the proposal one of the most economically progressive methods for transitioning to a de-carbonized economy.  See Figure 1.  Benefiting 86% still leaves 14% of the lowest quintile worse off – that’s about 2.8% of all American households or about 3.5 million households (U.S. Census Bureau, 2016).  The following is an attempt to understand why these households are made worse off, how significant the burden is, and what can be done to relieve that burden.

The short answer is that we cannot know precisely who is burdened, but there are data that can give us a general understanding of the circumstances that will tend to make a household worse-off.

Figure 1 – Distribution of benefits and burdens across quintiles

Why are households made worse-off?

The obvious reason households are made worse off is that their dividend is less than the cost they incur from the carbon fee.  This is true no matter which quintile the household is in.  To answer the question why are 14% of the lowest income households made worse off, we need to understand why a household might have above-average emissions.  Some of those reasons will be particularly common to low income households. 

A net financial loss is probably the result of some combination of the following factors:

1. the household is composed of a single person,

2. the household’s electricity is provided disproportionately by a carbon-intensive fuel, like coal,

3. the household is located in a particularly harsh climate,

4. the household is poorly insulated and has inefficient HVAC equipment and appliances,

5. the household’s transportation costs are particularly high, and

6. the household buys an unusually large amount of carbon intensive consumer goods and services.

1. Household Composition

Perhaps the most important factor of all is the household’s size.  Single person households will receive only one dividend share, while needing to cover the entire cost of maintaining the household, e.g., utilities, transportation, and necessary household consumer goods.  Meanwhile, a two-adult household will receive twice the dividend, but they will share many of the costs of maintaining the household.  Consequently, single person households are likely to be disproportionately represented in those households suffering a loss no matter what income quintile they are in. 

This has been borne out by the household impact study conducted by Kevin Ummel for Citizens’ Climate Lobby.  Ummel compared the net benefits going to two household types: “minority households” and “elderly households.”  Minority households are composed of more members (sometimes more than two adults which compounds the dividend).  Elderly households are, by definition, composed of only one or two adults.  These households have similar incomes, but the mean benefit accruing to minority households would be significantly greater than the mean benefit accruing to elderly households:  $148/year for minority households versus $2/year for elderly households considering all households (Ummel, 2016, p. 31; U.S. Census Bureau, 2016).  For households in just the lowest quintile, 99% of families of four are benefitted, while 81% of elderly households are benefitted.  The mean benefits for these households are $596/year and $138/year respectively.  These disparities show that living in a small or single person household contributes to a financial burden under the fee and dividend proposal.

2. Local Carbon Intensity of Electricity

Ummel also broke down the consumer habits of each income quintile into nine categories and determined the carbon tax burden for each category.  See Figure 2.  The largest single category for all but the top quintile is “utilities.”  Consequently, households that run on especially carbon intensive electricity would be disadvantaged by the carbon fee, while households running on clean energy would tend to benefit (Ummel, 2016, p. 34).  The importance of this factor is suggested by comparing Figures 3 and 4.  There is a rough correlation between the geographic distribution of the carbon intensity of the electricity supply and the financial impact on households in the lowest quintile.

3. Harsh Climates

Little need be said about this.  Households in especially cold or hot climates certainly will have higher utility costs than households in milder climates; however, in light of Figure 4, this factor does not seem to be particularly significant as many regions of the country experiencing harsh climates tend to enjoy

Figure 2 – National tax burden by quintile

 Note: From BEA NIPA Handbook (https://www.bea.gov/national/pdf/NIPAhandbookch6.pdf): “Private fixed investment (PFI) measures spending by private businesses, nonprofit institutions, and households on fixed assets in the U.S. economy. Fixed assets consist of structures, equipment, and software that are used in the production of goods and services. PFI encompasses the creation of new productive assets, the improvement of existing assets, and the replacement of worn out or obsolete assets.”

relatively greater benefits, e.g. New England, Florida, the Southwest, and Montana.  With inevitable changes to the climate, many climates will become harsher, increasing the importance of this factor.

4. Poor Insulation and Inefficient HVAC Equipment and Appliances

Again, it is obvious that households which live in poorly insulated housing and have inefficient HVAC equipment and appliances will bear a greater burden from a carbon tax as more energy will be required to achieve the same results.  This is a particularly significant problem for poor, low income households.  Such households often live in rental property, the owner of which is unconcerned about energy efficiency since the utilities are paid by the tenants.  Low income housing stock is significantly less efficient than average.  If low income housing were brought up to the national average, low income households would see a 35% reduction in their utility costs (Drehbol and Ross, 2016).

5. Transportation

The second largest category is “gasoline,” but while our common acquaintance with gasoline as a fossil fuel might lead us to think this would be the most significant factor in establishing a household’s carbon footprint, it actually makes up less than 25% of the total carbon footprint of U.S. households.  Still, if a household uses more gasoline than the national average, this factor will contribute to reducing the benefit they would receive from the carbon dividend and might, like other carbon-intensive factors, push them into a net loss. 

Figure 3 – Carbon intensity of energy supply

       

Figure 4 – Lowest quintile households benefited by fee and dividend

However, simply comparing gasoline costs between the lowest quintile and other quintiles might not be very revealing, since a disproportionate number of households in the lowest quintile likely will not have cars.  This means the gasoline costs borne by households in the lowest quintile will fall mainly on the car-owning households.

6. Indirect Costs

Utility costs and gasoline costs are “direct” energy purchases.  For the lowest income quintile, they make up 50% of the total costs.  The other categories are “indirect” energy purchases that appear as embodied energy in the goods and services that a household purchases.  Any household which purchases goods and services which are in total more carbon intensive than those purchased by the average household will find their net financial benefits lowered by these categories of expenditures, possibly pushing them into a net loss.  Because indirect purchases make up 50% of the lowest quintile’s energy purchases and even larger percentages of higher quintiles, these purchases are especially important in determining a household’s net benefit.  Indirect costs are the primary factor that burdens the higher quintiles and benefits the lowest income quintile, but lowest quintile households that purchase consumer products with an above average carbon footprint, nevertheless, will be penalized by these categories of purchases.

                                          

If a household remains well-enough below average in enough of the consumption categories, it will likely benefit from the fee and dividend mechanism, despite a high carbon footprint in other categories; however, if their consumption is in total above average across these categories, they will suffer a loss.  The worst-case scenario would likely be a single-person household, reliant upon carbon-based electricity, in a harsh environment, living in a poorly insulated house, with a long commute, purchasing unusually carbon-intensive goods and services.  Surely not every one of these conditions need hold to push someone into a loss, but various combinations of these factors could do so.  No single profile of a low-income household can tell the story for all 3.5 million households.

How significant is the burden?

Forty-seven percent of all households suffer a loss and their median loss amounts to $195/year.  Among the lowest income quintile, only 14% of households suffer a loss and their median loss is only $96/year or $8/month.  Consequently, the absolute burden is least for households in the lowest income quintile, but their median loss amounts to 0.79% of their income while the median loss nationally is only 0.25% of income.  So even as the lowest quintile is much more carbon virtuous than higher quintiles, their low income could make managing their loss nevertheless more difficult.  

There are additional considerations that are aggravating factors:

1. steadily rising fee,

2. limited conservation options for households in the lowest income quintile, and

3. the ability of higher income quintiles to achieve conservation savings.

CCL’s fees are proposed to begin at $15 in the first year and rise $10 in each subsequent year.  This means that the households (in all quintiles) that benefit will gain greater benefits as more revenue is collected, but burdened households will be made increasingly worse-off.  This could become a significant problem over time for households in the lowest quintile, unless those households are able to reduce their carbon footprint.  In many cases, we cannot reasonably expect this.  Furthermore, if households in higher quintiles are able to reduce their emission faster than households in the lowest quintile, less revenue will be collected without a comparable reduction of costs for the lowest quintile.  Households in the lowest quintile might be left behind in the race to reduce carbon emissions. 

There are several mitigating factors, however.  Ummel’s study does not seek to predict how the quintiles will fair in future years, but another study by Regional Economic Modeling, Inc. has projected the consequences of the fee and dividend nationally and regionally.  It provides some consolation that the fee and dividend will boost economic growth and create 2.1 million jobs in the first ten years.  These potentially could help reduce the harms across the board and soften the burden for the lowest quintile.  There are, however, more immediately recognizable mitigating factors:

1. the pass-through assumption,

2. under-reported high quintile expenditures,

3. price insensitivity among high income quintiles,

4. home ownership,

5. family wealth, and

6. temporary loss of income.

1. The Pass-Through Assumption

Perhaps most significant mitigating factor is that Ummel has assumed that 100% of the fee is passed on to consumers.  This undoubtedly will not happen.  For excise taxes generally, businesses commonly assume roughly 25% of the cost by reducing returns to capital and restricting or reducing wages (Tax Policy Center, 2017).  To some extent, as wages are reduced across all wage levels and as stockholders tend to be in higher income quintiles, the costs borne by the business will largely burden households in the higher quintiles.  So, the 14% of low-income households or 3.5 million households that are projected to lose financially is an overestimate.  Other analyses use different pass-through assumptions.  For example, the Department of Treasury’s Office of Tax Analysis assumes no costs are passed on to the consumer (Horowitz, 2017). 

2. Under-Reported Expenditures

Ummel also noted that there is a discrepancy between expenditures reported in the Bureau of Labor Statistics’s Consumer Expenditure Survey and the Personal Consumption Expenditures component of the U.S. Bureau of Economic Analysis’s national accounts.  The consequence of this is that reported expenditures are known to be underestimates of actual expenditures.  Utilities, gasoline, and a few other expenditures are reported more or less accurately, but other categories were under-reported by 47%.  Importantly, expenditures made by households in higher income quintiles are disproportionately under-reported.  Nonetheless, Ummel assumes that under-reporting is uniform across all income levels.  In a footnote, he recognizes that this will underestimate spending among the rich (Ummel, 2016, p. 4-6).  Underestimating these expenditures means that the aggregate revenue will be larger than estimated, and the dividend to the lowest income quintile also will be larger.  This is especially important as the underestimated expenditures are indirect expenditures and make up 60% of the expenditures of the highest income quintile.  Again, this will not only increase the dividend to all households, it will reduce the percent of lowest income households that are expected to be made worse off by the fee and dividend. 

3. Price Insensitivity

Perhaps one of the reasons that expenditures are under-reported by households in the higher quintiles is that they are less concerned about their expenditures than less well-off households.  Consequently, they do not notice those expenditures.  They also are likely to be less price sensitive than the less well-off.  They will be willing to make the same purchases even as prices rise somewhat.  According to Randy Schnepf of the Congressional Research Service, this is true for consumers making food purchases, “low-income consumers who spend a significant share of their household budget on food are likely to be … more responsive to price changes … than high-income consumers with lower food budget shares” (Schnepf, 2013, p. 28).  In the long run, this is very good news for households in the lowest income quintile.  That households in the higher quintiles will be relatively insensitive to price changes will mean that the lowest income households will be better able to keep pace with any conservation efforts made by those in higher quintiles.

4. Home Ownership

Not everyone who is in the lowest income quintile is poor.  Many people have substantial wealth in their houses.  Retirees who have paid off their mortgage can live comfortably with a relatively low income.  Others may have substantial savings conservatively invested.  While their income is low, they nonetheless could enjoy a lifestyle that involves higher than average expenditures and large carbon footprints.  Nationally, there are 6,896,000 homeowners with incomes less than $30,000 who are 65 years old or older (U.S. Census Bureau, 2015).  Some of these still might be carrying a mortgage, but the number is likely small.  While they may not have the security of people in the highest quintiles, their ability to afford the increased costs of a carbon fee might be similar to middle class households.  The existence of these households reduces the percent of households about which we should be acutely concerned.

5. Family Wealth

Like homeowners with low incomes, other households in the lowest quintile are not poor in the concerning sense.  They may be nominally distinct households, but benefit from their wealthy families.  Some college students would be good examples of these “households.”  While officially falling within the lowest quintile, they could have resources that allow them to make above average expenditures and thereby be among the households that are made worse off by the fee and dividend.  Roughly 20.5 million students attended college in fall of 2016.  A plurality of them came from the highest income quartile of families, i.e., families with an income of at least $116,000.  87% of high school students in the highest quartile went on to college (National Center for Education Statistics, 2017; Pell Institute, 2016).  Again, many “households” composed of college students from this stratum of society might be nominally in the lowest income quintile, but well-able to afford an increase in the cost of carbon intensive goods and services.

6. Temporary Loss of Income

The unemployment rate is currently 4.3% or 6.86 million people and the average length of unemployment is about 26 weeks.  Only a quarter of the unemployed remain unemployed for longer than 26 weeks (U.S. Bureau of Labor Statistics, 2017).  Loss of employment will surely send some number of households into the lowest income quintile for a time.  All other things being equal, they will likely not moderate their consumption habits significantly, if they have some savings to tide them over the period of temporary unemployment.  As household consumption correlates strongly with income, some number of them likely will be above the national average.  What this means is that some number of households with large carbon footprints will be in the lowest quintile only temporarily and will have greater resources in future years to recoup whatever burdens they experience during their weeks or months of unemployment.  These households will, in essence, be more likely to have high consumption habits and be more financially secure than those with chronically low incomes.  Recent research has revealed that in addition to people losing employment, income is often temporarily lost because of reduced hours during a business downturn (Morduch and Schneider, 2017).  The same situation faces small business owners suffering temporary losses.  We, of course, should be concerned about all of these groups, but their plight can be distinguished from households with chronically low incomes and for which we should be acutely concerned.

These six mitigating factors or categories of households all reduce the number of households and the burden they would suffer from the fee and dividend.  That is, each will reduce the percent of households in the lowest income quintile that are made worse off by the fee and dividend, such that 14% is an over estimate of households that will be significantly or chronically disadvantaged.  Additionally, the first three factors (the pass-through assumption and under-reported expenditures and price insensitivity by the higher income households) should increase the dividend for everyone and the mean net financial returns for the lowest income quintile.

Finally, data indicate that the burden among the lowest quintile will fall less on the lowest decile (Ummel, 2016 and Horowitz, 2017).

What can be done to relieve the burdens that remain?

Despite the expected reduction in the number of households that will suffer a net financial loss and the expected reduction in the size of that loss, some households in the lowest income quintile will continue to suffer losses.  Consequently, it will be important to find ways to relieve those burdens.  One simple way would be to modify the formula for distributing revenue.  CCL is promoting a modified per capita distribution (one share for each adult and one-half share for each child up to two children per family).  CCL believes the simplicity of this formula will be a political selling point, but it tends to burden single person households.  Other distribution formulas, nearly as simple, could be implemented that would protect those households.

Another significant method to protect people in the lowest quintile would be to reduce their carbon intensive expenditures.  As the largest single category of expenditures is utilities, significant relief can be achieved by de-carbonizing electricity generation.  This is precisely what the carbon fee and dividend is most likely to accomplish.  With rising costs for generating coal and gas fueled electricity, wind, solar, and other clean energy sources will gain greater and greater market share.  Already, coal-fired power plants are closing around the country and are announced to be retired sooner than initially planned.  If, ideally, all electricity was generated from clean sources, the carbon-based expenditures of the lowest quintile would be reduced significantly.  As this expenditure is proportionately larger than expenditures by higher income households, the net benefits to the lowest income households would further improve.  As electricity becomes cleaner, the carbon fee burden associated with consumer goods would also fall.  Businesses will seek to reduce their production costs by making use of low-carbon inputs, thereby reducing the cost of the fee to consumers.  So, the success of the fee and dividend would reduce both the fee and the dividend, essentially making it less and less relevant to household finances.  The problem of the steadily rising fee would be counter-acted by the reduced number of goods and services to which the fee applies.

The increased cost of gasoline production would stimulate more fuel-efficient transportation.  Already, hybrids and electric vehicles are gaining market share.  Countries such as Norway, India, China, and France have already announced intentions to promote or move entirely to electric vehicles. These are, of course, foreign markets, but they indicate the direction that the automobile industry is heading.  Virtually all major auto manufacturers are now producing an all-electric car.  While the upfront cost of new hybrid or electric vehicles will be beyond the reach of most all low-income households, more efficient vehicles in the used car market will become within reach.  As these vehicles appear on the market, the carbon-intensity of transportation expenditures by the lowest quintile will fall.  Here, too, the fee and dividend is designed to make itself obsolete.

There are a number of ways to reduce the cost of the fee to the lowest quintile that lie outside the fee and dividend proposal:  local, state, and federal support for energy efficiency upgrades for affordable housing, support for “Energy Star” appliances, “cash for clunkers” programs, and progressive utility rate structures are a few obvious tools.  Money for these programs could be raised by allowing households to voluntarily decline their dividend.  Checks would come to them with a notice that if they chose not to cash the check in a specific time period, the money would be used to support energy efficiency programs or perhaps research and development into alternative fuels.  Given that most of the revenue generated would come from the highest quintiles and that these checks would make up typically only about 0.2% of their annual income, many well-off households likely would be willing to make this contribution.

Finally, the costs and benefits examined here are only financial.  De-carbonizing our economy will benefit vulnerable communities located near polluting power plants.  This is a significant concern among environmental justice advocates.  Cap-and-trade carbon pricing plans do not address this problem.  Under a cap-and-trade system, polluting power plants can purchase off-sets and continue to operate polluting plants usually affecting poorer neighborhoods.  In contrast, a fee and dividend plan puts market pressures on all fossil fuel plants equally, thereby promoting healthier conditions for vulnerable communities.  The study conducted by Regional Economic Modeling, Inc. for CCL found that CCL’s fee and dividend plan would prevent 230,000 premature deaths in the courses of 20 years. 

While we cannot expect that all households within the lowest quintile will be benefitted by CCL’s carbon fee and dividend, it is clear that the proposal is extremely progressive and that the estimate that 14% of the lowest quintile will suffer a burden is an overestimation.   There are clearly ways in which the households in the lowest quintile can be protected.  Among these is simply the fact the fee and dividend plan is designed to make itself obsolete, particularly in those expenditure categories that are most damaging to the lowest quintile.  

Sources

Drehbol, Ariel and Lauren Ross, “Lifting the High Energy Burden in America’s Largest Cities: How Energy Efficiency Can Improve Low Income and Underserved Communities,” American Council for an Energy-Efficient Economy, April 2016.

Horowitz, John, et al., “Methodology for Analyzing a Carbon Tax,” Working Paper 115, Office of Tax Analysis, U.S. Department of Treasury, January 2017.

Morduch, Jonathan and Rachel Schneider, The Financial Diaries: How American Families Cope in a World of Uncertainty, Princeton: Princeton University Press, 2017.

National Center for Educational Statistics, “Fast Facts,” U.S. Department of Education, 2017 https://nces.ed.gov/fastfacts/display.asp?id=372, retrieved 6/26/2017.

Nystrom, Scott and Patrick Luckowk, “The economic, climate, fiscal, power, and demographic impact of a national fee-and-dividend carbon tax,” Washington, D.C., Cambridge, Mass.:  Regional Economic Modeling, Inc. and Synapse Energy Economics, Inc., June 9, 2014.

Pell Institute, “Indicators of higher education equity in the United States: 2016 historical trend report,” 2016, http://www.pellinstitute.org/downloads/publications-Indicators_of_Higher_Education_Equity_in_the_US_2016_Historical_Trend_Report.pdf, retrieved 6/26/2017.

Schnepf, Randy, “Consumers and food price inflation,” Congressional Research Service, Sept. 13, 2013. 

Tax Policy Center, “Briefing Book,” Urban Institute and Brookings Institution, 2017, http://www.taxpolicycenter.org/briefing-book/who-bears-burden-federal-excise-taxes, retrieved 6/26/2017.

Ummel, Kevin, “Impact of CCL’s proposed carbon fee and dividend policy: A high-resolution analysis of the financial effect of U.S. households,” prepared for Citizens’ Climate Lobby, Working Paper v1.4, April, 2016.

U.S. Bureau of Labor Statistics, 2017, https://www.bls.gov/home.htm, retrieved 7/6/2017.

U.S. Census Bureau, “America’s Families Living Arrangements,” 2016, https://www.census.gov/data/tables/2016/demo/families/cps-2016.html, retrieved 6/26/2017.

U.S. Census Bureau, “American Housing Survey,” 2016, https://www.census.gov/programs-surveys/ahs/data/interactive/ahstablecreator.html#?s_areas=a00000&s_year=n2015&s_tableName=Table1&s_byGroup1=a1&s_byGroup2=a1&s_filterGroup1=t1&s_filterGroup2=g1, retrieved 6/26/2017

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[*] I would like to thank Rebecca Schaaf, Ellyn Dooley, David Brittain, and Danny Richter for editorial comments and general guidance.  

The Trump Administration and Fossil Fuels

The American media are paying close attention to the investigations into the relations between Russia and Donald Trump’s administration and campaign.  One of the animating questions is whether the Trump Organization has financial interests in Russia or debts owed to Russian banks.  The idea that an American president might have personal interests great enough to affect foreign policy decisions is too juicy for an “adversarial media” to disregard, and Trump’s refusal to release his tax returns keeps that question alive, but Trump’s treatment of Russia can be seen differently when it is put in the context of many of his other actions and political appointments.  It falls into perhaps the most consistent pattern of behavior exhibited by an otherwise extremely inconsistent man.  Donald Trump is consistently defending and promoting the fossil fuel industry.

Consider his appointments. 

The leader of Trump’s transition effort seeking to find a suitable Administrator for the E.P.A. was Myron Ebell, the Director of Global Warming and International Environmental Policy at the Competitive Enterprise Institute and he has been the group leader of the Cooler Heads Coalition.  According to its website during Ebell’s tenure as group leader, “members of the coalition point out that the science of global warming is uncertain, but the negative impacts of global warming policies on consumers are all too real. Coalition members also follow the progress of the international Global Climate Change Treaty negotiations.”  Ebell has been among the world’s most vocal climate science skeptics.  He asserts that while climate change is happening and humans have a role in it, the extent of that role is uncertain.  The organizations for which he has worked appear to be funded by the fossil fuel industry, though a complete record of their finances is not available to the public.

Next, we have Scott Pruitt, Administrator of the E.P.A.  He too can be described as a climate change skeptic.  Like Ebell, he acknowledges that the climate is changing and that humans have a role in causing that change, but he too denies the conclusions of nearly all of the world’s scientific societies that the human role is dominant.  Ebell is an economist and Pruitt is a lawyer, but for some reason they feel qualified to reject the scientific consensus on climate change and continue to pretend that there is some meaningful disagreement among climate scientists.  Pruitt made his name nationally as a dogged opponent of President Obama’s clean energy efforts and he filed numerous law suits against the E.P.A. as Oklahoma’s Attorney General, particularly against President Obama’s Clean Power Plan.  So once a leading opponent of the E.P.A., he is now its head.

Then we have Ryan Zinke as Secretary of the Interior.  As if reading from the most current edition of the climate skeptics’ script, Zinke intoned the very same views on climate advanced by Ebell and Pruitt during his Senate confirmation hearing.  Though as a state legislator in 2010, he called for "comprehensive clean energy jobs and climate change legislation," by 2014 he was claiming that climate change "was not settled science."  Zinke appears to have got the memo regarding how a respectable skeptic characterizes the issue: it’s happening, it’s partly us, but maybe not so much.

Regarding public policy, Zinke seeks to reduce the restrictions on selling public land to the private sector and to defer to the states the ability to manage national monuments.  A primary beneficiary of both of these policies would be fossil fuel companies seeking mining and drilling rights on public lands.  At the end of May, Zinke ordered the drafting of a five-year plan to expand offshore drilling.  Later that month, he repealed the Bureau of Land Management’s moratorium on issuing coal mining leases.  In June, he took the first step to open up oil and gas extraction from the Arctic National Wildlife Reserve by authorizing a review of the oil and gas contained in the Reserve and is allowing the venting, flaring, and leaking of methane on public and tribal lands pending judicial review.  These are all moves that the fossil fuel industry has long desired.  President Trump’s 2018 budget for the Department of Interior has increased funding for oil and gas programs, including offshore drilling, despite a general cut in the Department’s budget, including a cut in renewable energy programs.  Additionally, the American Petroleum Institute hired Ryan Zinke’s former deputy chief of staff Megan Bloomgren, potentially strengthening the relationship between the Department of Interior and the oil and gas industry.

Former Texas Governor Rick Perry became the Secretary of Energy, ironically after he had run a presidential campaign that promised to abolish the department.  Perry once called the science behind climate change “unsettled” and a “contrived, phony mess.”  He consistently questioned the reality of climate change even as recently as 2014, but at his confirmation hearing he acknowledged that the climate was changing, attributing it to both natural and human causes, without stating their relative importance.  He went on to say that action to address climate change must be done in a way “that does not compromise economic growth, the affordability of energy, or American jobs.”  Since then, he has asserted that the role of humans is not a primary cause of climate change and has promoted the idea of establishing government funded “red teams” that would be tasked with undermining established scientific findings about climate change.  He has ordered a review of the national electric grid to determine if the reliability of its "baseload" power has been compromised by government support for wind and solar energy.  Perry’s remarks indicate that he assumes it has, so the review can be seen as an effort to undermine wind and solar energy as they are important fossil fuel competitors and guarantee a role for fossil fuels in the future.  The man managing the grid study will be Brian McCormack, a former utilities lobbyist and fierce opponent of renewable energy. 

Perry often is praised for the expansion of wind energy in Texas, but he was also a strong supporter of hydraulic fracturing and called for the lifting of the moratorium on deep-water drilling put in place following the Deepwater Horizon disaster.  He signed into law a permanent extension of tax breaks for “high cost” natural gas in an already relatively low-tax, low-regulation environment.  Perry might have been an authentic “all of the above” energy proponent, but his sympathies for fossil fuels are undeniable.  He is touting “clean coal” and natural gas, particularly liquid natural gas, saying that natural gas can be just as effect as the Paris Accord at limiting greenhouse gas emissions.  In the future, Perry might have much less to do with renewable energy as President Trump’s 2018 budget would cut the budget of the Department of Energy’s Office of Energy Efficiency and Renewable Energy by 70%.  

Also in the Department of Energy is William Bradford, head of the Office of Indian Energy Policy and Programs.  His views on climate change are revealed in his tweets: “unicorns, money trees, moderate Democrats, free lunch, & manmade [sic] climate change — things that don't exist,” and “soon, ‘climate change’ cultists will be pitied as the nuts they always were.” 

(Bradford has a checkered professional history as a law professor at Indiana University for three years, and even more briefly at the William and Mary Law School and the United States Coast Guard Academy.  Most recently he was employed at the United States Military Academy for one month before resigning.  He has a documented history of lying about his military service and his rank as well as being awarded a Silver Star.  His tweets about unicorns and climate change are actually moderate in comparison to other racist and sexist tweets he posted about President Obama, Mark Zuckerberg, Megyn Kelly, and interned Japanese citizens during World War II.  His Twitter behavior and general attitudes appear consistent with President Trump’s.)

Alex Fitzsimmons is now a senior adviser in Department of Energy's Office of Energy Efficiency and Renewable Energy.  He was formerly at the free market think tank the American Energy Alliance, where he wrote blog posts critical of state mandated renewable energy portfolio standards, “green energy cronyism,” and other efforts to promote clean, renewable energy.  Recently, he worked to promote oil and gas production via the “Fueling U.S. Forward” campaign.  With Fitzsimmons advising the Office of Energy Efficiency and Renewable Energy, we have another example of the fox guarding the henhouse.

Inside the Justice Department, President Trump has nominated Jeffery Bossert Clark to serve as the assistant attorney general for the Environment and Natural Resources Division.  Clark is a strong critic of the E.P.A. referring to it as “pursuing an agenda of control” and saying that it was "reminiscent of kind of a Leninistic program from the 1920s to seize control of the commanding heights of the economy."  He served as attorney for an advocacy group called “Consumers’ Research,” challenging President Obama’s Clean Power Plan.  In one legal brief, he argued against the E.P.A.’s endangerment finding based on easily debunked criticisms of the climate science consensus.  Clark also represented BP in suits stemming from the Deepwater Horizon oil spill.

Kathleen Hartnett White is the expected nominee to head the White House’s Council on Environmental Quality.  She current works at the Texas Public Policy Foundation which has the mission “to defend liberty, personal responsibility, and free enterprise in Texas.”  The Foundation denies that there is a consensus among scientists regarding the cause of global warming.  White has been promoted to lead the C.E.Q. by coal industry executives and conservative think tanks.  Her views on climate change are in line with other appointments.  She is quoted as saying that “it is likely” that human activity is contributing to climate change, but she says the extent to which it does is unclear.  For her, the science is not settled.  In recent years, she has also heaped praise on CO2, pointing out that our bodies are built on carbon and that it is essential for photosynthesis.  She is the author of a paper entitled, “Fossil Fuels: The Moral Case” and is the co-author of a book entitled, Fueling Freedom: Exposing the Mad War on Energy.

Within the Council on Environmental Quality, Mario Loyola was hired as the associate director of regulatory reform.  Previously, Loyola worked for the Wisconsin Institute for Law and Liberty.  He also worked for the Texas Public Policy Foundation.  As a frequent writer for the National Review, Loyola has often asserted that the science of climate change is not certain enough to inform policy decisions.  In January, he wrote that scientists have an “extremely limited ability to quantify the relationship between CO2 increases and temperature increases precisely enough to support an informed choice among policy alternatives."  Loyola’s primary interest appears to be the rollback of environmental regulations of all kinds.  He was a critic of President Obama’s Clean Power Plan.

Finally, we come to Secretary of State Rex Tillerson, former C.E.O. of Exxon Mobil.  On the surface, he appears to be the model of an enlightened fossil fuel executive.  Tillerson not only publicly supported U.S. commitments made in the Paris Climate Accord, he has made cogent arguments in favor of a carbon tax.  His views on climate change, though, are the skeptic’s current party line:  climate change is happening, humans are partly the cause, but how much?  We don’t know.  Prior to Tillerson becoming C.E.O. of Exxon Mobil, the company was a leading force in dismissing concerns about climate change and poured a great deal of money into “think tanks” that had as their missions to distort and confuse the public perception of climate science.  This happened despite a history of Exxon scientists presenting internal reports confirming the climate science consensus.  Support for denialist institutions appears to have changed with Tillerson’s arrival at Exxon Mobil, though the lack of public records makes this hard to confirm.

Currently, the New York Attorney General Eric Schneiderman is investigating Exxon Mobil to determine if its reports to shareholders understated the danger of climate action to the company’s future profitability.  These understatements would have been made while Tillerson was C.E.O.  Schneiderman has gone so far as to write in a legal document that Exxon Mobil’s reports to shareholders were “a sham.” 

Tillerson’s argument that the U.S. must retain “a seat at the table” in international discussions of climate change does not mean he has any interest in agreements that will compromise fossil fuel development.  Even his support of a carbon tax might be a ploy to ensure that he has the standing to advocate a tax that is high enough to blunt the criticism of climate activist and low enough to keep Exxon Mobil in business.  Finally, Tillerson’s relationship with Russia reveals a long-standing interest in seeing Exxon Mobil involved in the development of Russian oil and gas fields, particularly in the Russian controlled Arctic. 

This, of course, leads us to our original question?  What is Trump’s interest in Russia?

Trump may have personal financial interests in Russia and he may have an emotional attachment to personalities like Vladimir Putin, but it is hard not to fold Russia into the evidence of his administration’s symbiotic relationship with the fossil fuel industry.  After all, Russia is a petrostate and as of March 2017, Putin is on record denying the role of humans in changing the climate.   Putin has even asserted that global warming is good for the planet.  Drawing from statistics reported over the last few years, Russia is the world’s largest oil producer, the world’s second largest natural gas producer, and the world’s sixth largest coal producer.  It is the world’s largest exporter of hydrocarbons.  (Given the rapid, recent rise in natural gas production in the U.S., Russia’s position may have slipped since these numbers were compiled, but its position certainly must remain very high.)  Consequently, it is in the interest of international fossil fuel companies to maintain good, working relationships with the Russian government.  Rex Tillerson has been quite adept at this, receiving the Russian Order of Friendship award from Putin in 2013 after signing deals with the state-owned oil company Rosneft to partner in the exploitation of Russian oil reserves in the Arctic Ocean and the Black Sea.  The operation was halted, however, after the U.S. placed economic sanctions on Russia following its invasion of the Crimea.

Time and again, the Trump administration has taken actions that both symbolically and substantively support the interests of the fossil fuel industry.  Whether is it killing President Obama’s Clean Power Plan, reneging on commitments made in the Paris Climate Accords, making Saudi Arabia his first international trip, boasting about his support for coal, attacking E.P.A. regulations to limit methane leaks in both pipelines and underground storage facilities, slashing budgets for energy conservation, approving the Keystone XL Pipeline and the Dakota Access Pipeline, opening federal land for fossil fuel exploitation, or supporting offshore drilling, the pattern is undeniable – the Trump administration is acting aggressively and often effectively in the interests of fossil fuels.  It is entirely plausible that his efforts to thaw relations with Russia is first and foremost a part of that effort.

President Trump has yet to fill many important positions in his administration. Given his track record, we can expect more appointments that will support the interest of the fossil fuel industry.  With a sympathetic Congress, our best hopes to reduce greenhouse gas emissions are currently via court cases and the emerging economic strength of clean, renewable energy.  The former will depend on the forward thinking of state and federal judges.  The latter will depend on technological advances and popular support for a livable future.

How to Rig an Election

There has been a great deal of talk about rigging elections this year.  The Democratic Party has criticized Republican attempts to institute voter ID laws, Bernie Sanders’s supporters have claimed that the Democratic National Committee tipped the scales in favor of Hilary Clinton during the Democratic primaries, and now Donald Trump is warning us that his election will be stolen by voter fraud.  Among these accusations and others, some have more merit than others, but all of them overlooked the real way in which this election -- and all our elections -- have been rigged.  

A Brief History

The simplest and certainly the most effective way to rig an election is through the private funding of campaigns.  Elections in the U.S. always have been funded primarily privately, mostly by rich people associated with businesses, but the modern period of campaign finance began in the last years of the 19th century with the activities of Mark Hanna, a key campaign adviser to William McKinley.  Hanna was especially skilled at eliciting campaign contributions from bank executives.  He expected them to contribute money in proportion to their bank’s share of the nation’s prosperity.  Hanna is reported to have once said, “There are only two important things in politics.  The first is money, and I can’t remember the second.”  With the election of 1896, the excesses of the “Gilded Age” had come to affect politics as never before.  This produced a reaction that brought about a number of important electoral reforms, including a 1907 law prohibiting corporate contributions to federal political campaigns.  Still, this did not end the influence of big money in politics.  Business owners and other wealthy individuals remained able to make large personal contributions as well as illegal contributions, due the absence of a dedicated regulatory agency.  They did so for several decades, but again, a reaction resulted in the Federal Election Campaign Act of 1971 which capped campaign spending on media buys and required the disclosure of campaign contributions.  The Watergate scandal is often seen as a scandal about a burglary, but at its heart, it was a campaign finance scandal.  Millions of dollars in secret cash were delivered to the Committee to Re-elect the President in suitcases and satchels in order to avoid the disclosure requirements of the Federal Election Campaign Act. 

In the wake of the Watergate scandal, Congress passed the 1974 amendment to the Federal Election Campaign Act.  This placed limits on campaign contributions and spending.  It also established, for the first time, a dedicated regulatory body:  the Federal Election Commission; however, in Buckley v. Valeo (1976), the Supreme Court struck down spending limits for both candidate political committees and independent political committees.  This opened the way for individuals to influence elections through contributions to numerous political action committees (PACs), federal, state, and local party committees, and “leadership PACs” established by prominent politicians.  Many of these committees were exempt from disclosing their donors.  Consequently, Buckley v. Valeo undid the most significant elements of campaign finance reform and established the legal precedent that any amount of spending was protected by the 1st Amendment.  This was defended (and criticized) with the slogan “money is speech.”

As before, the excesses of money in politics led to new calls for reform, resulting in the passage of the Bipartisan Campaign Reform Act of 2002 (BCRA), sponsored by Senators McCain and Feingold and Congressmen Shays and Meehan.  Importantly, the BCRA (1) made party political committees and independent PACs subject to federal constraints and it (2) prohibited the airing of “issue advocacy ads” within 60 days of an election, if the ad mentioned a candidate by name.  It also (3) prohibited all issue advocacy ads that were paid for by corporations, unions, and non-profit advocacy groups.  It should be no surprise, though, that moneyed interests again were able to skirt the restrictions.  They did so by using political organizations defined under Section 527 of the Internal Revenue Code.  These “527s” were not covered by the BCRA.  Worse yet, all three important restrictions established by the BCRA soon were struck down by the Supreme Court.  F.E.C v. Wisconsin Right to Life, Inc. (2007) permitted party and independent PACs again to raise and spend money without federal restrictions.  Citizens United v. F.E.C. (2010) permitted non-profit corporations to produce issue advocacy ads mentioning candidate names and air them at any time.  Since then, both rulings have been reaffirmed and broadened by the courts.  Citizens United has been broadened to permit the unlimited funding of PACs by corporations and unions.  Consequently, we now live in the most unregulated, private campaign funding environment since before 1907.

Two Ways to Rig an Election

A private campaign finance system may not be a sure mechanism for directly electing specific individuals, but it certainly loads the dice in favor of certain kinds of candidates.  First and most obviously, campaigns which are well-funded have the ability to conduct larger and better developed political communication campaigns. They can open offices and hire professional staff members who can then – with greater resources – conduct polls and focus groups, analyze the electorate, design effective messages, purchase advertising that will help shape the issues upon which the election will be decided, and mount an effective get-out-the-vote campaign. These advantages mean that a candidate that meets the approval of and therefore receives the financial support of donors will have a greater chance of winning office than candidates who do not receive the largess of donors.  It is important to recognize that this advantage does not depend on bribery or selling one’s legislative power to donors.  The system simply benefits those candidates with whom donors agree.

This leads us to the second way in which our private system of campaign financing rigs (or loads the dice) of our elections.  It is true that a relatively large campaign treasury will not guarantee the election of the candidate, but according to research done by the U.S. Public Research Interest Group examining the 2000 congressional elections, better funded campaigns won general elections 94% of the time and the results for primary elections were similar (90%).  If we understand elections as periodic, society-wide events that install thousands of federal and state officials, the effect of our private campaign finance system becomes clear.  If well-financed candidates have a much better chance of winning an election, officials who get elected will tend to reflect the preferences of campaign financiers; not simply because candidates seek to curry favor among the donor class, but because the campaign financiers will only donate to candidates who are in line with their preferences.  This will lead to legislatures and executive officers that will enact public policies that serve the interests the donor class and not necessarily the entire body politic, since the interests of these two groups are not always aligned.

Let’s look at some of the data about this.  First of all, people making contributions to political campaigns are comparatively well-off.  According research by Douglas Phelps, 90% of donations in the 2002 congressional primaries came in amounts at or above $500 – donations much larger than what the average citizen makes.  These donations were made by just 0.1% of the voting age population.  So very few of us make campaign donations and those of us who do usually make rather large donations.  Phelps goes on to report that a survey conducted just five years earlier revealed that nearly 80% of those who donated $200 or more in the 1996 congressional elections earned more than $100,000 per year.  That is, four out of five campaign financiers were in the top 14% of the country’s income earners and the vast majority of those who gave larger sums and donated to numerous candidates earned more than $250,000 per year.  That is, people who were the most influential donors were in the top 1.5% of earners.  It should come as no surprise that in the decades since these studies were done, F.E.C v. Wisconsin Right to Life, Inc., Citizens United v. F.E.C.,  and other court rulings have only made this problem worse. 

This amounts to rigging not just individual elections, but to loading the dice for all elections in a way that serves the interests of the donor class.  It occurs not because of the conscious actions of a small conspiracy stuffing ballot boxes or suppressing the vote, but as the natural and inconspicuous consequence of the election laws that have been put in place by successful politicians.  The result is that public policies passed into law conform to the preferences of the economic elite and only incidentally reflect the preferences of the general population.  This was demonstrated recently in research done by Martin Gilens, Professor of Politics at Princeton University and Benjamin Page, Professor of Decision Making at Northwestern University in their article “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens.”  Gilens and his graduate students examined survey data indicating the preferences of American citizens regarding 1,779 policy issues. They recorded the political preferences of citizens with median incomes (typical incomes) and the preferences of citizens at the 90th percentile of incomes (wealthy incomes).  They then compared these two sets of preferences to actual policy changes that occurred within four years of when the surveys were done.  They discovered that policy changes strongly correlated with the preferences of the wealthy citizens, but correlated with typical citizens’ preferences only when they happened to be the same as the preferences of the wealthy.  Giles and Page wrote, “The central point that emerges from our research is that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while mass-based interest groups and average citizens have little or no independent influence.”  Let that sink in.  "Mass-based interest groups and average citizens have little or no independent influence" over public policy.

The influence of wealth in our political system is greatest at the highest levels of government, but it exists at the state and local level as well.  Normally, if  candidate at lower levels of government conforms to the interests of the wealthy, they become potential candidates for office at higher levels.  Their track record at lower levels is what makes them able to attract large donations early in higher level campaigns, thereby driving out less well-funded competitors and then raising yet more money later on.  This early pursuit of campaign donations was put in the spotlight by the PAC, EMILY’s List, which is an acronym for “early money is like yeast.”  This is why the first phase of federal and state-wide campaigns involves prospective candidates making the rounds of known big donors to try to excite interest.  Failing to get support from big money donors early on means the candidate’s chances for election will be slight and he or she will not be taken seriously by the media.  The effort to procure this early money has been dubbed “the wealth primary.”  Very few candidates ultimately succeed who do poorly in the wealth primary. 

What we must keep in mind here is that the private campaign finance system allows people who can afford to make large contributions much greater political influence, not just over what our officials do, but over who our officials are.  A single donor who can give $100,000 dollars in an election cycle has the same influence in the wealth primary as one thousand donors who can give only $100 dollars, and of course there are billionaires and multimillionaires who donate much more  than  $100,000 dollars in an election cycle.  The political influence of Tom Steyer and his wife Kathyrn Taylor would be equal to the influence of a city of 672,862 people or roughly Detroit, Michigan, and the influence of Sheldon Adelson and his wife Miriam would be equal to the influence of a city of 473,572 people or roughly Kansas City, Missouri, if each of their residents including infants and children contributed $100 dollars. Thus, we are left with a system that does not ensure effective, equal political participation on the basis of one person, one vote.  Instead, we have a system that affords political influence based on how rich a person is.  This is the very definition of plutocracy.

In summary, it seems clear that the wealthy are able to effect public policy to their liking, while the rest of the population is excluded from the decision making process.  This is the natural consequence of an electoral system which produces officials that were made viable for office by the wealthy donor class.  While high school civics teachers, media commentators, and elected officials are largely united in saying that we live in a democracy, on closer examination we see that it is a plutocracy – a government that is not of, by, and for the people, but of, by, and for the wealthiest people.  Elections – the ostensible hallmark of democracy – are, in the U.S., a public ritual in which we legitimate the officials that have been chosen for us by the wealthy.  At best, we are given the role of arbitrating political disagreements between competing sectors of wealthy people.

Rigging Re-election

Once in office, officials have numerous ways of rigging their own re-elections.  They, of course, have a much greater ability to load the dice by making contacts with like-minded wealthy donors and their prominent position gives them a powerful pulpit for campaigning year-round among those donors.  They generally do not have to worry about establishing “name recognition.”  In a 2012 study, Stockemer and Praino report that between 1952 and 2008, incumbents running for a seat in the U.S. House won reelection at rates between 89% and 99%, demonstrating just how strong the incumbent advantage is.  More specifically, Abramowitz, Alexander, and Gunning (2006) found that “the reelection rate of House incumbents has increased from 87% between 1946 and 1950 to 94% between 1952 and 1980, 97% between 1982 and 2000, and 99% in the 2002–2004 elections.” 

The greatest advantage of incumbency, however, is the opportunity to participate in drawing district lines after the decadal U.S. census.  By carefully gerrymandering districts, elected officials choose their voters instead of allowing voters to choose their elected officials.  The two clearest techniques for doing this is (1) to concentrate a large number of voters of the opposition party into a single district, thereby giving those voters only one representative when their numbers would deserve more and (2) to dilute voters of the opposition party across several districts so that they again are underrepresented.  In these cases, the elections are rigged state-wide by the party that controls the redistricting process.  This is done by both the Republican and Democratic Parties.  For example, in 2014 in Democratic Maryland, Republican candidates for the House of Representatives received 42% of votes for major party candidates.  That should yield at least three Republican representatives out of eight for the state, but due to the district lines, Maryland Republicans have only one representative.  In Republican Georgia, Democratic candidates for the House received 41.5% of votes for major party candidates.  That should yield roughly six Democratic representatives out of 14 for the state, but again due to the district lines, Georgia Democrats have only four representatives.  This undemocratic representation of voters could be more or less rectified by appointing non-partisan redistricting commissions with binding authority, but the majority parties in most states prefer to rig their elections to ensure disproportionate representation.  So not only are voters relegated to legitimating candidates presented to them by the donor class, many of voters are deprived of any effective role because of gerrymandering. 

Other Rigging Techniques

Of course when we think of rigging elections, we tend to think of fraudulent voting, stuffing ballot boxes, tampering with computer code, misreporting results, and numerous techniques to suppress the vote.  It is possible that many of these activities do take place from time to time and one should not minimize their harms.  Voter ID laws and the disenfranchisement of ex-felons stands out here, but they other techniques are probably relatively rare and unlikely to tip any but the closest elections.  None of them constitute a critical threat to democratic rule on a society-wide basis.  Focusing on election rigging of this sort distracts our attention from the systemic rigging that generally goes on unnoticed and does have a society-wide effect.

One voter suppression technique that is seldom mentioned is restricting ballot access.  Unlike many of the techniques just mentioned, this is a wholesale suppression of the vote which tends to restrict the topics that can enter the public debate.  Voters who seek to cast their ballots for candidates in parties other than the Republican and Democratic Parties are often precluded from doing so by onerous restrictions that prevent their candidates from even appearing on the ballot.  The Democratic Party is particularly aggressive about blocking ballot access.  Party lawyers frequently challenge petition signatures and file court cases to block their political opponents from even being a choice for the voters. 

Beyond these methods, the Democratic and Republican Parties both have rigged the presidential elections (and similarly state elections) in their favor by forming the Commission on Presidential Debates and writing rules that effectively preclude other candidates from participating in the debates and thus gaining a forum.  Finally, the marginalization of alternative political views is reinforced by a corporate media which provides the donor-approved candidates with billions of dollars of free media; meanwhile, they almost invariably ignore, dismiss, and sometimes ridicule any competing candidates.

Conclusion

What is the most significant conclusion we can draw from the foregoing?  Elections in the United States are the property of a rich donor class which uses them to legitimate public officials who then can be expected to act in the interest of the donor class.  Simply put, we do not live in a democracy.  We live in a plutocracy as sure as any exists.  It is up to us to decide what we do under these circumstances, but if we truly are committed to democracy, we must ask ourselves, how are we to behave as citizens of a plutocracy?

Sources consulted for this essay include:

·       Abramowitz, Alan I., Brad Alexander, and Matthew Gunning, “Incumbency, Redistricting, and the Decline of Competition in U.S. House Elections,” Journal of Politics, 68(1), February 2006.

·       “Bipartisan Campaign Finance Reform Act,” Federal Register, 68(2), January 3, 2003.

·       Buckley v. Valeo, 424 U.S. 1 (1976).

·       Citizens United v. Federal Elections Commission, 558 U.S. 310 (2010).

·       Federal Election Commission v. Wisconsin Right to Life, Inc., 551 U.S. 449 (2007).

·       Gilens, Martin and Benjamin I. Page, “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens,” Perspectives on Politics, 12(3), Sept. 2014.

·       Guide to U.S. Elections, Deborah Kalb, ed., Washington D.C.: CQ Press, 2005.

·       Lioz, Adam and Gary Kalman, The Wealth Primary: The Role of Big Money in the 2006 Congressional Primaries, Washington, D.C.: U.S. PIRG Education Fund, 2006.

·       Makinson, Larry, Speaking Freely: Washington Insiders Talk About Money in Politics, 2nd edition, Washington D.C.: Center for Responsive Politics, 2003.

·       OpenSecrets.org, accessed November 2, 2016.

·       Phelps, Douglas H., “Leveling the Playing Field,” National Civic Review, 93(2), Summer 2004.

·       Raskin, Jamin and John Bonifaz, “Equal Protection and the Wealth Primary,” Yale Law & Policy Review, 11(273), 1993.

·       Stockemer, Daniel and Rodrigo Praino, "The Incumbency Advantage in the US Congress: A Roller-Coaster Relationship," Politics, 32(3), October 2012.