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NRO’s domestic-policy blog, by Reihan Salam.

Rethinking Super PACs



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Given that there were a number of well-funded Super PACs that worked to elect Mitt Romney and a Republican Senate this past election cycle, should we conclude that the success of President Obama and Senate Democrats demonstrates that it is safe to dismiss Super PACs as a useless money-suck for gullible donors? This thesis is, in my view, kind of silly. The first and most obvious point is that Romney and Republicans more broadly might have fared even worse had right-of-center Super PACs not entered the fray. One of the lesser known aspects of the 2010 Citizens United decision is that it greatly increased the ability of organized labor to deploy its resources on behalf of labor-aligned political candidates, as Sasha Issenberg, author of the well-regarded new book The Victory Lab, has observed, among others. Without a counterweight of right-of-center Super PACs, one can imagine a scenario in which Democrats won an even larger victory thanks to an army of dedicated volunteer drawn from the ranks of labor, as hard as that might seem to believe. This counterfactual isn’t necessarily on target, but we shouldn’t dismiss it out of hand.

I prefer to see Super PACs through a different lens. Essentially, Super PACs are like party organizations. Consider the thesis of The Party Decides, as summarized by Ryan Lizza:

In 2008, John Zaller, a political scientist at U.C.L.A., and three co-authors—Marty Cohen, David Karol, and Hans Noel—published an influential book, “The Party Decides,” in which they claim that Downs had it all wrong. The activists, not the candidates, are the crucial players who define and control a party. Interest groups and partisans, like the ones who organize and attend CPAC, care a great deal about policy and ideology, not just about electability, and they decide who gets nominated. Zaller and his colleagues dub them “intense policy demanders,” which, in today’s G.O.P., includes all the familiar factions: religious leaders, gun enthusiasts, business élites, anti-tax activists, foreign-policy hawks. Their mission is to find the most extreme candidate who can win.

The ideal candidate is someone like George W. Bush. Party activists saw him as a conservative ally; swing voters, who, Zaller points out, aren’t sophisticated at detecting a candidate’s ideology, regarded him as a moderate. But sometimes activists don’t have a candidate like that, and they’re willing to risk defeat by backing someone far outside the mainstream. (This strategy can have its own payoff: in 1964, Barry Goldwater lost in a historic landslide, but he changed American politics.) “Parties want to be optimally extreme,” Zaller says. “They are like the frequent air traveller who believes that if he never misses a flight he is getting to the airport too soon.”

For Cohen et al. the “party” is larger than the formal party organization. It is the broad constellation of institutions and individual activists who constitute the coalition in question. Super PACs are part of this larger constellation.

Yet Super PACs mimic many of the functions of formal party organizations, e.g., they devise a political message, they choose candidates to back, and they decide how to deploy resources to greatest effect. The main disadvantage of Super PACs relative to formal party organization is that they are banned from coordinating with candidates. The main advantage of Super PACs is that they are lightly-regulated relative to formal party organizations. These two factors are closely related to each other. Campaign finance regulations have severely constrained the ability of formal party organizations to engage in coordinated expenditures, as Peter Wallison and Joel Gora, authors of Better Parties, Better Government have explained:

[A]s the law stands today, parties are severely limited in what they do to provide direct assistance to their candidates, but are as free as any other group to spend funds independently — on an uncoordinated basis — in support of the candidates running for office under the party banner. However, independent or uncoordinated spending is generally considered by candidates and political specialists to be far less efficient and effective than coordinated spending, and is often counterproductive. As Thomas Mann of the Brookings Institution has pointed out, “diminished efficiency and accountability” are the costs of requiring that parties’ spending be independent of their candidates: “Having to set up a separate independent spending operation increases the administrative expenses borne by parties. More importantly, it runs the risk of conflicting messages and less than optimal timing of ads run by candidates and their parties.”

Consider some of the specific restrictions dictated by current law. Party committees are allowed to give directly only $5,000 per election to their House candidates and $39,900 to Senate candidates. The $5,000 cap on contributions to a House candidate is the same amount that it was in 1940, and would be worth about $65,000 in today’s dollars; the cap for a Senate candidate would be $519,000. While parties can make coordinated expenditures of $42,100 in support of their congressional candidates (the coordinated expenditure limit with Senate candidates depends on the number of voters in the state and is commensurately larger), the continued persistence of caps and coordinated expenditure limits seriously hinders the important role of political parties in our political system and is an uncomfortable reminder of the incumbent-protective nature of contribution limits.

These limits significantly impaired the ability of both major political parties to provide direct or coordinated support to their candidates in the Senate and House races in 2008. [Emphasis added]

That is, the chief advantage of political parties relative to Super PACs — their ability to coordinate with campaigns, which can greatly increase the efficiency and accountability of campaign expenditures — isn’t all that much of an advantage, at least not now. Formal party organizations are thus in an advanced state of decay, and as Wallison and Gora explain, individual candidates have gained leverage relative to parties as they’ve been forced to raise money independently. This is a boon to incumbents, who by virtue of name recognition and risk-aversion and fundraising networks have a huge advantage over challengers, yet it is arguably bad for voters, who are less likely to have a good choice of candidates, particularly candidates who aren’t independently wealthy or particularly good at fundraising, and for ideological activists, who might prefer party organizations that can exert greater discipline on candidates. 

In theory, at least, Super PACs can fill some of the vacuum left behind by parties by devoting resources to campaigns in which the Super PAC’s favored candidate has limited resources. The problem, of course, is that this spending is both inefficient and unaccountable, which is the source of the smart critique of Super PACs. 

But recall the chief advantage of Super PACs relative to formal party organizations, which is that they are lightly-regulated relative to political parties. One can imagine that Super PACs will get better faster over time relative to formal party organizations, as they are less hindered by regulation and by the conventions and habits of mind that can weigh down a more established organization. As the political strategist Patrick Ruffini has suggested, Super PACs can be understood as the application of open-source principles to political parties. As formal party organizations lose power, a competing array of organizations will emerge to advance the conservative or progressive cause. This swarm of new institutions will ideally involve a great deal of churn, i.e., failed Super PACs will die and new Super PACs offering new messages and business models will emerge in their place. For example, a right-of-center group like Crossroads Gen could demonstrate that its economy-focused message is more appealing to young voters than an approach that emphasizes social issues, and in doing so encourage the propagation of its insight across the ecology of right-of-center institutions. Just as this process of churn contributes to productivity increases in competitive product markets, it could improve the relative efficiency of party-like organizations over time. That is, Super PACs can be understood as a “disruptive innovation.” The following is drawn from the Innosight, the consulting firm founded by Clayton Christensen, the father of the study of disruptive innovation:

As our experience shows, disruptive innovation isn’t about winning a technology race, but about delivering innovations aimed at a set of customers whose needs are being ignored by industry leaders. A disruptive innovation trades off performance along one dimension for performance along another, such as simplicity, convenience, ability to customize, or price. Think, for example, of the trade-offs retail medical clinics represent versus traditional doctors’ offices.

The key is to know which tradeoffs the consumer is willing to make. That’s why we look beyond traditional definitions of an industry to understand the true “jobs” that customers are trying to get done – defining a market from the customer’s viewpoint, not the company’s.

A disruptive innovation allows a whole new population of consumers access to a product or service that was historically only accessible to consumers with a lot of money or skill. Once a truly disruptive product or service takes root in simple applications at the bottom of a market it can move relentlessly up market, eventually displacing established competitors.

This raises the question of who exactly is the “customer” of the Super PAC. The most obvious answer is that donors are the customer. Formal party organizations limit the power of donors for the simple reason that a successful party organization will be in a position to balance the competing interests of many individual donors. To be sure, some clique of donors will likely be overrepresented and this will presumably push policy in one direction or another. But Super PACs allow individual donors or very small groups of donors to have much tighter control of a political message than a formal party organization would or could. This obviously isn’t the kind of disruptive innovation Christensen has in mind — like minimills or the MP3 player, etc. But to the extent that there is a hunger among wealthy individuals to build organizations that advance your very particular vision of what progressives or conservatives can and should say, Super PACs can meet that appetite. 

This framework lends itself to the most cynical interpretation of Super PACs, which is that they are a money-suck for gullible donors. Yet apart from wanting tight control of a political message, which can be achieved in a number of ways, Super PACs are selling the political expertise of their founders in service to achieving broader political objectives. So one assumes that the Super PACs that appear to be best at electing candidates will do better than those that appear to be bad at it. (I use “appear” advisedly. There is a great deal of ambiguity in determining the likely contribution of campaign expenditures to political outcomes, though of course social scientists have made no small progress in this regard.)

In the near future, one assumes that we’ll see a shift in Super PAC expenditures away from relatively ineffective television advertising to, say, GOTV activities and other higher bang-for-buck expenditures. All of this is to say that Super PACs could still surprise their detractors.

It happens that I remain a skeptic about the value of Super PACs relative to the value of strong political parties, which is why I support the party-centered campaign finance reform agenda advanced by Wallison and Gora. If the ability of parties to coordinate with individual candidates is greatly strengthened, my best guess is that Super PACs will fade in influence. 



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