Book Club Monopoly?

Bertelsmann AG of Germany has agreed to buy out Time Inc.’s interest in Bookspan, their book-club joint venture that includes Book-of-the-Month Club, American Compass, and other clubs. The Wall Street Journal reports that

The deal, announced today, would leave Bertelsmann as the only major operator of book, music and DVD clubs in the U.S.

Uh-oh! Sounds like a monopoly. Should we call the FTC? Launch a congressional hearing? No–first because nothing has actually changed; the joint venture was apparently already the only operator of such clubs. The only difference is that Bookspan is now solely owned by Bertelsmann.

But if two sets of book clubs had merged, then we might be hearing the same sorts of calls for antitrust investigation that we heard in regard to the proposed merger of the XM and Sirius satellite radio networks. And the argument would be just as ridiculous. A monopoly book club would not control book consumers; it would still compete with Amazon and Laissez Faire Books and other services for mail-order book consumers; and also with actual bookstores for book consumers generally; and with magazines and newspapers for readers; and with movies, television, radio, and iPods for the time and attention of consumers. Just like–as the Journal said a week or so ago–“a combined Sirius-XM would have to compete not only with free broadcast radio but also with MP3 players, online radio and even music channels offered by cable providers.”

Response to Tom Mann on Campaign Finance Reform

Tom Mann has responded to earlier criticisms by Bob Bauer and me of an op-ed by Norman Ornstein and Anthony Corrado. Bob responds on our behalf here. Bob has done well as usual; I respond here on my own behalf.

Mann argues that the Bipartisan Campaign Reform Act (BCRA) did not devastate the political parties. But I did not argue that it had devastated the parties. Tom concedes my original point: earlier trends suggest the parties have fewer resources in 2006 than they would have had without BCRA. I argued that this shortfall for the parties cost the Democrats 15 to 20 seats in 2006 since they were not able to fully exploit the national shift in public mood. Tom says they had enough money to contest the races. My claim about the effects on the party came from Rahm Emanuel and other party leaders. Here’s evidence from the New York Times [$$$] quoted in an earlier post:

Stan Greenberg, the Democratic pollster, …said that Republicans held 14 seats by a single percentage point and that a small investment by [Howard] Dean [head of the Democratic National Committee] could have put Democrats into a commanding position for the rest of the decade…” There was a missed opportunity here,” he said. “I’ve sat down with Republican pollsters to discuss this race: They believe we left 10 to 20 seats on the table.”

[…]

Mr. Emanuel said … : “More resources brings more seats into play. Full stop.”

Emanuel’s statement supports my claim. Tom himself cites the testimony of Terry McAuliffe, a Democratic party leader, in his post on another matter. If McAuliffe counts, so does Emanuel.

Here are some other arguments from Tom Mann (in italics) and my replies:

BCRA did not ban any political ads; it stipulated that electioneering communications may not be funded by corporations and unions.

Well, if an “electioneering communication” is a type of political ad and a law stipulates that corporations and unions may not fund them, then the law has banned the funding (and hence, the existence) of a certain kind of political ad. Part of the struggle over BCRA was whether these ads were “issue ads” (and hence protected by the First Amendment) or like contributions to campaigns (and hence, illegal because or earlier bans on contributions by labor unions and corporations). BCRA defined the ads as contributions by calling them “electioneering communications.” The Supreme Court acquiesced in that definition. The ads have disappeared from campaigns. The regulation of money does appear to eliminate speech. Sen. McCain himself thought disclosure of the supporters of the advertising would be enough to stop the ads (i.e. the political speech). Or so he said on the floor of the Senate.

There is another part of this story. These issue ads were irritating and threatening vulnerable members of Congress. In response, Congress declared funding of the ads illegal. That strikes me as striking evidence that campaign finance regulation protects its authors, i.e. members of Congress.

The amount of political advertising in 2006 supports the view that BCRA did not constrain vibrant free speech.

This is an interesting confusion. If we define vibrant free speech as “the amount of political advertising in 2006,” then indeed BCRA did not constrain vibrant free speech. But if BCRA constrained spending on political speech and other electoral activities, then it did restrict free speech, even if we had lots of speech otherwise. “Vibrant” here means something like “enough” political speech. Thus BCRA may have restricted some speech, but the society had enough for its purposes.

There is a parallel here to an argument made some years ago by the law professor Owen Fiss. He argued that the free speech of some disfavored speakers might be restricted to foster a “rich public debate,” which he took to be the goal of the First Amendment. Hence, in Fiss’s view, the First Amendment empowered government to suppress speech for the higher goal of a “rich public debate.”

Tom Mann is not explicitly arguing for suppression of speech. But he is implicitly reading the First Amendment as expressing a social goal rather than a restraint on government. Once we have “enough speech,” we should not be especially worried about restrictions on some speech.

This point supports Tom’s general observation that arguments about campaign finance are dependent on political theory. As I argue in The Fallacy of Campaign Finance Reform, progressives have come to see the First Amendment as empowering government to regulate and suppress speech in pursuit of larger social goals. But the First Amendment simply restricts the government’s power over speech. It does not say the government may limit freedom of speech if we have enough speech during an election, or to assure that we have the right kind of speech for a “rich public debate.” It just restrains the government. (In the interest of accuracy, I should point out that not all of Tom Mann’s allies mentioned in his post are progressives; Michael Malbin is not for one).

Party soft money was not diverted to 527s. The research on this by the Campaign Finance Institute, reported in The Election After Reform, is crystal clear.

Mann may be correct here. If so, the parties were deprived of huge sums in 2006.

Samples judges BCRA by the arguments made in Congress by some of its supporters. I don’t doubt that some wanted to reduce the overall amount of money in campaigns and eliminate negative advertising. But those were not built into the design of the law.

This implies that the Senators who explicated the law on the floor of the Senate and later voted for BCRA did not understand its purposes or how it would work. We should wonder about the validity of a law if the people who enacted it did not understand its goals or its design. But, then again, the goals many senators assigned to BCRA were not constitutional. (You can read about the many purposes of BCRA in the Introduction to The Fallacy of Campaign Finance Reform).

Tom Mann finishes up by arguing that my “libertarian framework” leads me to ignore reality. (Similarly, Ornstein and Corrado branded critics of BCRA as “ideologues” in their original Washington Post piece). Here’s what Tom is doing rhetorically: Libertarianism is a kind of religion that believes things without proof. We – that is, Tom Mann and company – are pragmatic and moderate, trying to grapple with complexity in pursuit of the common good. So who are you going to believe? The simple-minded fundamentalist or the scientific centrists?

This is a neat rhetorical gambit often deployed by self-described moderates. But there are several ironies here.

First, Tom’s allies in the “reform community” (though not Tom himself, or any of the people he mentions) are not especially scientifically-minded. For example, I have been told that such self-described reformers have bitterly criticized political scientists for not finding evidence of corruption caused by campaign contributions.

Second, The Fallacy of Campaign Finance Reform is filled with attention to empirical work and some original analysis of data. I do not simply assert that campaign finance law protects incumbents, I discuss data that is consistent with that hypothesis. I also mention data that is not consistent with that hypothesis (for the latter, see pages 231-2). I also deal with empirical work that suggests contributions do influence congressional behavior (see pages 98-100). I do discuss the political theories behind the campaign finance struggle. And yes, you can get all that for $22.04 plus shipping!

Note also that I wrote above, “Mann may be correct here.” But read the book and then decide for yourself whether Tom is correct about my attitude toward empirical evidence.

Third, policymaking about campaign finance itself has not been anything like the empirically-minded model Tom sets out. The basic federal campaign finance law was passed in 1974 (and amended a bit shortly thereafter). Its regulations were justified as a means to prevent corruption or the appearance of corruption. Over the next three decades studies consistently cast doubt on the influence of contributions on policymaking. Other studies indicated that campaign finance rules had little to do with trust in government. Were the laws changed in response to these studies? For example, were contribution limits raised to keep up with inflation or even increased? In fact, the limits were left at their 1974 levels, thereby becoming ever smaller through the effects of inflation. The appearance of corruption rationale, for its part, remains a frequently-cited justification for more campaign finance regulations. To be sure, studies have been used to justify more regulation of money in politics. Studies that suggest liberalization, however, are ignored by judges and legislators. In science, that’s called selection bias. In politics, it’s called business as usual.

Duke University Students Are “Innocent”

The North Carolina Attorney General has just announced that the criminal charges against the Duke University lacrosse players have been dropped because the young men are “innocent.”

Much will be said about Michael Nifong, the original prosecutor who is now facing an ethics investigation. However, as I’ve said before, I think it’s a mistake to think that this case was about one rogue prosecutor. The problems are more systemic than many wish to acknowledge.

The Hazards of Happiness Research

My new Cato Policy Analysis, “In Pursuit of Happiness Research: Is It Reliable? What Does It Imply for Policy,” was released today. If you’re wondering why we need long papers about the hazards of happiness research, look no further than Bill McKibben’s new essay in Mother Jones:

According to new research emerging from many quarters, … our continued devotion to growth above all is, on balance, making our lives worse, both collectively and individually. Growth no longer makes most people wealthier, but instead generates inequality and insecurity. Growth is bumping up against physical limits so profound—like climate change and peak oil—that trying to keep expanding the economy may be not just impossible but also dangerous. And perhaps most surprisingly, growth no longer makes us happier.

There’s about five kinds of wrong in this one short passage. One of them is generated by the fact that McKibben is apparently ignorant of the most recent work on happiness – much of which directly contradicts his claim that we are not getting happier with growth. You’ll find the up-to-date scoop in my new paper. (Here’s a bite-sized taste.)

If you’re worried about this whole business about measuring happiness and using the results to determine public policy, you’re not alone. Darrin McMahon in the elegant lead essay of this month’s Cato Unbound casts a skeptical eye over the entire enterprise. But in today’s installment, Swarthmore psychologist Barry Schwartz, author of The Paradox of Choice: Why More Is Less comes to the defense of the politics of happiness, and argues (in the McKibben vein), that more wealth can actually make us worse off. Is it true? Tune in to Cato Unbound on Friday when Ruut Veenhoven, Director of the World Database of Happiness, will drop the latest data.

Or, if you’re anxious, you can get plenty of secondhand Veenhoven in my paper.

Congress Gets Serious about Ethics

Sure, an hour a year ought to be plenty.

One of the changes that House Democrats pushed through at the start of the new Congress is a requirement that all members and staffers get annual ethics training. And for those of you who are lucky enough to be working this week, you can start your training Wednesday, according to a recent memo from the House ethics committee.

Under House rules, all lawmakers and staff must receive one hour of ethics training a year. And House officers and senior aides, as well as those lucky staffers designated “principal assistants,” will have to get an additional hour of training.

Each office and committee must name an “ethics certification officer” by the end of this month, and that person will make sure the rest of you receive the training.

When you can’t trust people to be responsible, and you’re unwilling or unable to monitor irresponsibility and unethical behavior within your normal systems, you end up creating layers of regulation, red tape, and bureaucracy – like annual training and official “ethics certification officers.” And then you call them “ethics certification officers” instead of actual ethics officers, because the goal is to certify that you’ve completed ethics training, not to actually ensure ethical behavior.

I Thought the President Was the “War Czar”

The lead story in today’s Washington Post reported that the White House is trying to find a “high-powered czar to oversee the wars in Iraq and Afghanistan with authority to issue directions to the Pentagon, the State Department and other agencies.”

Much of the story focuses on the fact that three retired four-star generals have declined the job, and many of the people quoted in the story opine on why it has been so hard to find someone willing to take it.

But the whole premise strikes me as odd. Why is such a new position even necessary?

Veteran reporters Peter Baker and Tom Ricks explain:

The administration’s interest in the idea stems from long-standing concern over the coordination of civilian and military efforts in Iraq and Afghanistan by different parts of the U.S. government. The Defense and State departments have long struggled over their roles and responsibilities in Iraq, with the White House often forced to referee.

Isn’t that what the president is supposed to do?

Drilling down further in the story, the responsibilities of the “war czar” are discussed. According to Baker and Ricks:

The highest-ranking White House official responsible exclusively for the wars is deputy national security adviser Meghan O’Sullivan, who … does not have power to issue orders to agencies.

But the president does.

The new czar would also have “tasking authority,” or the power to issue directions, over other agencies.

The president can do that.

Last, Baker and Ricks report, the new Czar should have

enough stature and confidence to deal directly with heavyweight administration figures such as Secretary of State Condoleezza Rice and Defense Secretary Robert M. Gates.

Presumably, the president fits the bill there, too. So what am I missing here?

Carlos Pascual, former Coordinator for Reconstruction and Stabilization at State, and now a vice president at the Brookings Institution, a man with whom I have numerous disagreements, seems to have hit the nail on the head: “An individual can’t fix a failed policy…So the key thing is to figure out where the policy is wrong.”

The Search for a Limited-Government Candidate Continues

Newt Gingrich, who continues to vigorously – though unofficially, so he can do it with million-dollar donations – campaign for president, appeared in Washington yesterday at what was billed as a debate with John Kerry on global warming. Some conservatives, disillusioned by the prospect of choosing among Rudy Giuliani, John McCain, and Mitt Romney, have looked to Gingrich as an actually Reaganite candidate. He should have dispelled those thoughts yesterday.

Instead of disagreeing with Kerry, Gingrich said that global warming is a problem and that “we should address it very actively.” He raved about Kerry’s book on the environment. He refused even to disagree with Kerry over the urgency of government action. Perhaps most un-Reaganesquely, he declared that while he preferred tax incentives to government mandates, “I am not automatically saying that coercion and bureaucracy is not an answer.”

There’s a Republican mantra for the new century.