Event Information

The government and opposition in Georgia remain locked in political stalemate. The opposition continues to hold rallies and to call for President Saakashvili to step down, and the opposition and government thus far have found no common basis for moving forward. All this plays out against a backdrop of lingering tensions in relations between Georgia and Russia in the aftermath of the August 2008 conflict.

On June 17, the Center on the United States and Europe (CUSE) at Brookings hosted Irakli Alasania, former Georgian permanent representative to the United Nations and currently the head of the Alliance for Georgia opposition group, for a discussion on the political crisis in Georgia and the prospects for resolution. After a decade of important positions in the Georgian government, Ambassador Alasania resigned from his position at the United Nations in December 2008 and has since been actively involved in the Georgian opposition. Brookings senior fellow Carlos Pascual introduced Ambassador Alasania and moderated the discussion.

Audio

• The Political Crisis in Georgia: Prospects for Resolution

Transcript

• Uncorrected Transcript (.pdf)

Event Materials

• 20090617_georgia

Chairperson, Excellencies, distinguished Delegates, Ladies and Gentlemen,

I have come to New York from Kampala where I attended last week’s African Union Special Summit of Heads of State and Government on refugees, returnees and internally displaced persons in Africa. There, I witnessed the historic moment of the adoption of the AU Convention on the Protection and Assistance of Internally Displaced Persons in Africa. The importance of this Convention cannot be underestimated. Building on the UN Guiding Principles on Internal Displacement it is the first legally binding IDP-specific treaty covering an entire continent. The Convention is a tremendous achievement and a beacon of hope for the almost 12 million people in Africa internally displaced by conflict and the many more internally displaced by natural disasters, and hopefully serves as a model for other regions, too.  

I commend the African Union for its leadership in developing this Convention. I urge all African states to ratify it and implement its provisions, and I call on the international community to seize this momentum and to lend all support needed to its implementation. 

Mr. Chairperson, 

Reflecting on my mandate’s activities over the past 12 months, I would first like to highlight three topics: climate change and natural disasters, internal displacement and peace processes and the search for durable solutions for internally displaced persons. 

Climate Change and Internal Displacement

Climate change increases the frequency and magnitude of climate related disasters, both sudden-onset disasters like flooding and hurricanes and slow-onset disasters such as desertification. The negative impact of these disasters can be mitigated by adopting disaster risk reduction measures. Yet, it is expected that the number of persons displaced by climate related disasters will increase. Most of these people will remain within their own country; hence they will be internally displaced persons to whom the UN Guiding Principles on Internal Displacement apply. It is therefore crucial to enhance capacities of governments and humanitarian actors to provide protection and assistance to these persons. I strongly call on states to ensure that the adaptation and risk management regime of the new UNFCCC framework agreement covers forced displacement. 

Internal Displacement and Peace Processes

Finding durable solutions for internally displaced persons is an essential element of a successful peace process. The way the issue is addressed in peace agreements often predetermines how internal displacement is dealt with in the aftermath of conflicts. Many peace agreements reflect the issue of internal displacement insufficiently or haphazardly. Therefore, over the past 18 months and in close cooperation with the Mediation Support Unit of the Department for Political Affairs of the UN and humanitarian, human rights and mediation experts, I developed a guide on internal displacement and peace processes for mediators. This guide provides advice on how to consult with internally displaced persons and engage them in the different phases of a peace process even if they do not sit at the negotiation table and on what kind of key displacement-specific issues should be addressed in the text of a peace agreement. It will be published later this year.[1] 

I deepened my engagement with the Peacebuilding Commission through a country-based engagement on Central African Republic. I am pleased to see that the country specific strategic framework reflects many of the recommendations that I submitted on the basis of a working visit to this country last February. I plan to remain engaged with the Peacebuilding Commission in the course of the coming year. 

I call on all actors presently involved in peace and peacebuilding processes to adequately address the specific needs of IDPs in the aftermath of armed conflicts. 

Durable Solutions for IDPs

In the many missions I carried out over the past five years, I noticed that finding durable solutions for IDPs is always a tremendous challenge. It is a multi-faceted, long, complex and often expensive process, which requires the coordination and cooperation of a variety of actors from among national and local authorities, and the humanitarian and the development communities. With policy guidance such as that provided by the Framework for Durable Solutions—a document developed by my office and the Brookings-Bern Project on Internal Displacement a few years ago and presently being revised in close cooperation with relevant stakeholders[2]—we know what should be done, but we must improve on the ground. Too often the coordination between humanitarian and development actors is insufficient, the funding for early recovery activities is lacking or IDPs are simply not a priority in recovery, reconstruction and development plans resulting in gaps jeopardizing the sustainability of returns or local integration of the displaced when the humanitarian actors phase out and the development partners are not yet able to show tangible progress in restoring infrastructure, services and livelihoods. Based on my observations in many countries, I have come to the conclusion that the practical problems in this area are a consequence of systemic failures in bringing humanitarian and development actors together to work hand in hand at an early stage of recovery. In addition to differences in approaches and cultures, these failures can to a large extent be attributed to a lack of flexible funding mechanisms for early recovery and reconstruction in spite of some recent steps in the right direction, including the creation of the peace-building fund.  

Country Situations  

Mr. Chairperson, 

The second pillar of my mandate is the engagement in a constructive dialogue with governments. I am grateful that with a few exceptions the countries that I approached during this reporting period were open to engage with my mandate. 

Allow me to provide you with an update on important developments since the completion of my written report to the General Assembly:  

I carried out a mission to Somalia from 14 – 21 October. Lack of humanitarian access, security risks for humanitarian workers, and the sharp decline in donor contributions exacerbate this long-standing humanitarian crisis, and international attention to the plight of IDPs is largely insufficient. I was shocked by the degree of violence the civilian population and in particular internally displaced persons in South and Central Somalia suffer. Serious violations of international humanitarian and human rights law are committed in an environment of impunity. Such acts are a major cause of the displacement of 1.5 million persons, the majority of whom are women and children. They remain highly vulnerable and exposed to serious human rights violations, in particular sexual violence, during flight and in IDP settlements. Many of the displaced try to reach safety in Puntland or Somaliland, where the high number of internally displaced persons puts enormous strain on the limited existing resources and basic services available. Reception capacities for new internally displaced persons must be strengthened and basic services expanded to reduce the burden on host communities. Further robust development interventions are needed to transform humanitarian action into sustainable livelihoods and investing into education and job opportunities for the youth is a must in an environment where recruitment by radical forces is often the only opportunity offered to them. Present efforts by the authorities, humanitarian, development and human rights actors are largely insufficient to bring urgently needed change. I urgently call on the international community to strengthen these efforts and to reaffirm its commitment to Somalia. 

I was twice in Sri Lanka over the past six months; in April, shortly before the end of hostilities, and again in September at a time the security situation had vastly improved, although over 250,000 internally displaced were still held in closed camps. Restoration of their freedom of movement has become a matter of urgency, and immediate and substantial progress in this regard is an imperative for Sri Lanka to comply with its commitments under international law. I discussed a three-pronged strategy for decongesting the camps with the government, which is based on returns of IDPs to their homes, release of IDPs to host families and transfer of IDPs to small open welfare centers in the region of return as a transitional solution until return is possible. I urged the Government to pursue these options in parallel with highest priority, to speed up the screening procedures, and to immediately release those not deemed to pose a security threat. Since my visit, this process has started. I acknowledge the progress made so far in demining and reconstructing returnee areas and releasing and returning a good number of displaced people to Jaffna and Mannar, Trincomalee and Batticaloa as well as to Vavuniya and Killinochi. I underline that this return needs to happen according to international standards. At the same time, I continue to reiterate that the ultimate goal is the restoration of freedom of movement and finding durable solutions for all IDPs. 

During my visit to Georgia of last autumn, I reiterated that there should be no discrimination between different persons internally displaced in Georgia’s different waves of displacement. The approximately 220,000 individuals who have been displaced over the long-term in Georgia should be able to avail themselves of the same possibilities to improve their living conditions as are enjoyed by those more recently displaced. I welcome that in the meantime the government has adopted an action plan to improve the housing situation of the long-term displaced and started to implement it. I am also grateful that a solution was found allowing me to visit the Tskhinvali region/South Ossetia region next week. 

I remain engaged on the situation in the Democratic Republic of the Congo. In March 2010, six other special procedures and I will report to the Human Rights Council on progress the DRC made in implementing a series of recommendations we previously made on how to tangibly improve the situation on the ground. Despite encouraging returns of 110,000 persons in North Kivu Province over the last two months, I remain concerned about the overall deterioration of the humanitarian situation due to the continued attacks on civilian populations carried out by LRA (Lord’s Resistance Army) militias and the impact of the military operations against the FDLR (Forces Démocratiques pour la Libération du Rwanda) armed group and the FDLR’s reprisals against the civilian population triggering new displacements.  

My working visits to Uganda and Serbia had a special focus on durable solutions. In Uganda, I was impressed to see that the majority of the formerly 1.8 million internally displaced persons have returned to their villages and I expressed my appreciation to the Government for its continued efforts. Sustaining returns remains a challenge that must be addressed by quick impact recovery and development activities, which requires stronger action by development agencies and support of donors. Despite the huge progress made thus far, the fate of a considerable number of particularly vulnerable individuals left behind in camps or living in transit sites as well as a general lack of synchronicity between the phasing out of humanitarian assistance and the increase of development activities in returnee areas continue to be a source of concern. 

Many of the 200,000 persons internally displaced from and within Kosovo (I am using the term in accordance with the U.N. position of strict neutrality on the status question) have not yet found a durable solution. I note with appreciation that all relevant authorities in Pristina expressed their commitment to facilitate returns of displaced persons, regardless of their ethnicity. However, due to entrenched patterns of discrimination in every sector of life and also a lack of support, in particular at the municipal level, there have only been a few sustainable returns. At the same time, I wish to reemphasize that the right for a dignified life and the right to return are not mutually exclusive. In this respect, I would like to commend the increased efforts of the Government of Serbia to improve the living conditions of internally displaced persons who have not returned.  

Mr. Chairperson, 

This is my last report which I present personally in my capacity as Representative of the Secretary-General to the General Assembly. Over the past five years, I have seen encouraging trends.  The UN Guiding Principles are now firmly rooted as the relevant framework for the protection of internally displaced persons, legislation and policies have been developed at national and regional level and the cluster approach has led to an improved humanitarian response. Overall, states and humanitarian and developmental actors are better prepared and equipped today to address the plight of the more than 50 million persons displaced within their countries. This is badly needed as the effects of climate change will lead to new displacement. At the same time, it is worrying to see that armed conflict are conducted with utter disregard for the civilian populations in several parts of the world, the humanitarian space is shrinking in many countries, and many displacement situations that were protracted when I assumed this mandate remain unchanged. 

A new mandate-holder will be named next summer and I trust that he or she will also benefit from the particular strengths that currently characterize my mandate. As a Representative of the Secretary-General, I enjoy excellent access to Governments and other important stakeholders, I receive remarkable support of the relevant entities of the United Nations and from donors, and my participation as a standing invitee to the Inter-Agency Standing Committee is key to reach out to the wider humanitarian community.  

Thank you.

It’s a fair question to ask: what was all the fuss about last October? The elections in Georgia and Azerbaijan came and went and the results were no surprise. Azerbaijani incumbent Ilham Aliyev won and Georgia's Mikhail Saakashvilli did not. The Azerbaijani elections were bogus; the Georgian elections were not. So what? Life goes on.

But perhaps it is not that simple. Most outside observers saw these elections as a barometer of democratic progress in a region where the West — and the U.S. in particular — has invested time, resources and effort over more than 20 years to help these countries to build a better future for themselves. As stakeholders in the democratic process in the South Caucasus since Armenia, Azerbaijan and Georgia gained their independence in 1991, Europe and the U.S. must fuss over the outcomes of the Azerbaijani and Georgian elections. 

Beyond Election Day

Evaluating these elections and their impact on the domestic social and political landscape as well as foreign relations requires, however, a focus on more than just election day. The excellent report from the European Stability Inititive on the election observation mission to Azerbaijan makes a strong case for not judging democratic progress based only on how the elections may appear to be conducted on election day.

The Georgian elections proved that post-Soviet governments could change, politicians could change and a European path be chosen. The Azerbaijani elections proved that a regime could “buy” favorable reports from short-term observers imported for election day, carry on with election rigging, continue human rights violations and ignore international criticism, whether from the Department of State or the Organization for Security and Cooperation in Europe’s long-term observer mission.

Why the difference between the two neighboring countries? There are several reasons. First, Georgia’s generally free and fair 2012 parliamentary elections set a strong example for the 2013 presidential elections, and Georgia welcomed outside involvement and observation. Azerbaijan, on the other hand, prevented the visit of U.S. Deputy Assistant Secretary for Democracy and Human Rights Tom Melia before its elections. Second, Georgian political parties, including the opposition, agreed on electoral ground rules. Third, the Georgian population demanded leadership change. Fourth, the outcome of elections in Georgia was accepted as a transparent way to — for the first time in modern Georgian history — transfer political legitimacy.

Test of Democratic Evolution

The real test of democratic evolution has to do with actions — over a period of months before and after election day — as well as rhetoric that affect the integrity of the elections. The pre- and post-election environments in Azerbaijan consist of continuing intimidation of the political opposition and independent NGO leadership, suppression of freedom of expression and official dismissal of any need to change. While Georgia had a pretty good pre-election period, the post-election period remains fraught with challenges to the effectiveness of Parliament and other fragile institutions, and whether the current government will pursue criminal charges against former President Saakashvili.

Is it Our Business?

There are different views regarding whether democratic evolution — in its broadest sense — is our (e.g. the West, U.S.) business at all. Who are we — despite our support for democratic change — with all our defects to establish standards for others to follow? At least for the short-term the Maidan events in Ukraine put this point into practical focus. If a country wants to be part of the West there are certain standards of economic and political reform that must be met as part of that association. In other words values matter. The traditional excuses of geopolitical importance or interests of energy security for failure to accept even the minimal international norms for treatment of a country’s own citizens are gone.

A major issue for the post-election period has become the choice between closer association with the EU or Vladimir Putin’s Eurasian Union. This choice really is about values that countries choose to be identified by. Armenia and Georgia made clear choices at Vilnius summit for the Eastern Partnership: Georgia and Moldova for the EU; Armenia for Eurasian Union. Ukraine was asked to make a decision but chose to walk the line between short-run financial expediency and a long-term commitment to a European future. Azerbaijan decided to choose none of the above; “neutrality” the regime called it. All the while proclaiming — along with its apologists in the West — the strategic importance of Azerbaijani energy for Europe’s future.

These countries can no longer talk their way around this or employ foreign surrogates to do this for them. Arguments for overlooking bogus elections, corruption and human rights abuses based on overriding strategic importance to the U.S. (e.g. war against terror, Northern Distribution Network, energy security) are excuses for inaction on the fundamental values that must be at the core of our relationships in the 21st century.

When countries like Azerbaijan fail to live up to these standards we do not walk away. Rather we continue to insist on solid, value-based behavior by those who profess they are partners with us. That means economic and political reforms to complete the transition from post-Soviet to 21st Century status. This requires observance of human rights, respect for freedom of expression, and release of political prisoners. It also requires a pattern of increasingly democratic elections. That’s why we need to care about elections in the south Caucasus.

We must congratulate Tbilisi on its accomplishments in the October electoral process. At the same time we must encourage the Georgian government to move along with strengthening institutions like Parliament and the judiciary so Georgia can avoid a political justice system.

Event Information

Recent events in Ukraine have raised important questions about Russian ambitions in the former Soviet space and the future political perspectives of the countries caught between Russia and the European Union. These countries are facing substantial obstacles in their efforts to maintain balanced relations with the United States, the European Union and the Russian Federation because of increased Russian political, economic and military pressures. In Ukraine, the annexation of Crimea and the ongoing turmoil in the East threaten the Ukrainian government's ability to maintain its independence and the sovereignty of Ukraine. Georgia and Moldova have expressed their intention to sign Association Agreements with the European Union, but increasingly face the prospects of destabilizing Russian economic sanctions and even the possible rekindling of their “frozen conflicts” in Abkhazia, South Ossetia and Transnistria.

On April 29, the Center on the United States and Europe at Brookings (CUSE) will host the ambassadors of Georgia, Moldova and Ukraine—Ambassadors Archil Gegeshidze, Olexander Motsyk and Igor Munteanu—as well as Eric Rubin, U.S. deputy assistant secretary of State for European and Eurasian Affairs, to discuss the dilemmas of these countries and possible solutions. Fiona Hill, director of CUSE, will introduce the speakers and moderate the discussion.

After opening remarks, panelists will take questions from the audience.

Audio

• A Discussion with the Ambassadors of Georgia, Moldova and Ukraine

Transcript

• Transcript (.pdf)

Event Materials

• 20140429_ambassadors_transcript

Harsh geopolitical realities and historic legacies have pushed the South Caucasus states of Armenia, Azerbaijan, and Georgia back onto the foreign policy agendas of the United States, the European Union (EU), and Turkey, at a time when all three have pulled back from more activist roles in regional affairs. The South Caucasus states have now become, at best, second-tier issues for the West, but they remain closely connected to first-tier problems. To head off the prospect that festering crises in the Caucasus will lead to or feed into broader conflagrations, the United States, EU, and Turkey have to muster sufficient political will to re-engage to some degree in high-level regional diplomacy. In “Retracing the Caucasian Circle Considerations and Constraints for U.S., EU, and Turkish Engagement in the South Caucasus,” authors Fiona Hill, Kemal Kirişci, and Andrew Moffatt explore the rationale and assess the options for Western reengagement with Armenia, Azerbaijan, and Georgia given the current challenges and limitations on all sides. Based on a series of study trips to the South Caucasus and Turkey in 2014 and 2015, and numerous other interviews, the authors review some of the current factors that should be considered by Western policymakers and analysts.

Constraints and considerations for U.S., EU, and Turkish engagement in the South Caucasus:

• Divergent trends in the South Caucasus
• Russia’s influence in the South Caucasus
• Regional conflicts
• The United States’ diminishing role in the South Caucasus
• Failure to integrate the South Caucasus into the EU
• Foundering relations with Turkey
• Dashed expectations in the South Caucasus of Western engagement

Despite the challenges that have beset the West’s relations with the South Caucasus and the growing disillusionment in Armenia, Azerbaijan, and Georgia, giving up on engagement is not an option.

Policy options for the future:

• The United States, EU, and Turkey must work together, rather than separately
• “Under the radar” coordination on creative interim solutions and working with other mediators
• Focus on the development of “soft regionalism”
• Work with Georgia as the hub for furthering soft regionalism
• Devise adaptable policies as relations with Iran and China develop in the region

Downloads

• Retracing the Caucasian Circle: Considerations and constraints for U.S., EU, and Turkish engagement in the South Caucasus

I write this as I learn of the beating death of an Azerbaijani journalist Rasim Aliyev. His “crime” was to post a Facebook item about football. What follows seems insignificant compared to his murder.

Two articles have appeared in prominent Western outlets in the past month addressing developments in the South Caucasus and the need for adjustments in U.S. (and Western) policy toward the region. The first was an excellent, in-depth Brookings report titled "Retracing the Caucasian Circle—Considerations and Constraints for U.S., EU, and Turkish Engagement in the South Caucasus"; the second was a shorter essay that Bill Courtney, Denis Corboy, and I penned for Newsweek on the need to reboot policy toward Armenia, Azerbaijan, and Georgia. Both reflected the difficulty of writing about the “South Caucasus” as if the three countries had common interests and objectives. Increasingly these interests and objectives are diverging, except for a growing unhappiness with the United States and the West for not paying attention to—or doing enough to support—the region. In the case of Azerbaijan, the frustration stems from U.S. leaders paying too much attention to the appalling human rights situation in the country.

What’s making the Azerbaijanis so upset with the West?

The authors of the Brookings report point to elite cynicism over Western disinterest and policy failures in the region as sources of Azerbaijani leaders’ unhappiness. This, in their view, is causing Armenia, Georgia, and Azerbaijan—for different reasons and in different ways—to tack toward Russia.

We have a different take in our Newsweek piece. We argue that the unhappiness results from governing elites recognizing that U.S. and Western policy regarding human rights, democracy building, corruption, and conflict resolution (especially the Nagorno-Karabakh conflict) threaten regime stability. Therefore, the tacking toward Russia is a conscious choice to avoid pressure and the transparency that closer association with the United States and Europe would involve.

The new orientation of these countries requires serious adjustment in Western policies. There are four new drivers prompting change (beyond the role of Russia): the regional consequences of the Iran nuclear agreement; the growing economic crisis, which is affecting the South Caucasian states in different ways; the threat of renewed military conflict between Armenia and Azerbaijan; and the internal security implications of suppression of human rights. While each country responds to these drivers in different ways, they are the source of a new dynamic in the South Caucasus that requires a fresh Western policy approach.

Three wild cards will shape these drivers and the Western approach to them: First, how hard will Russian President Vladimir Putin push his objective of rolling back the degree of Western influence achieved since the fall of the Soviet Union? Second, how well will Iran play the nuclear agreement card, especially regarding its reentry into global energy markets? Third, how distracting will Turkey’s military response to the Islamic State and the Kurdistan Workers’ Party (PKK) be for Turkey’s interests in the South Caucasus and its objective of becoming a regional energy hub?

The shortcomings of soft regionalism

What is to be done? Faced with such a challenging situation, the default policy response is to provide more assistance (economic and military), dispatch senior officials from Western capitals to visit the region, and indulge (rather than criticize) democracy and human rights abuses, all in the name of developing a strategic partnership. In other words: Show more love.

That business-as-usual approach is inappropriate for these challenging times. In the case of Azerbaijan, it is an inappropriate response to the continued violations by the Baku regime of basic human rights and freedom of expression.

The Brookings paper suggests a multilateral approach (involving the United States, EU, and Turkey) based on soft regionalism. I do not believe that soft regionalism will work. The best we can hope for is parallel bilateral engagement on the basis of common interests (e.g. conflict prevention) and shared values (e.g. democratic evolution, observance of human rights). We need to treat the energy issue in the region as a commercial rather than geopolitical one. Changes in the global energy market have undermined the geopolitical significance of Caspian energy resources compared to two decades ago. With low energy prices likely the norm for the near future, energy no longer plays a strategic role for the region. Among other weaknesses, the soft regionalism prescription implies coordinated interests with Turkey—this will be difficult absent an opening in Turkish-Armenian relations.

Who needs who more?

The burden of choice in this relationship with the West must shift from the outside parties to the South Caucasian states themselves. The outsiders should stop talking about “strategic” partnerships, trans-Caspian pipelines and Silk Roads because this perpetuates a “you-need-us-more-than-we-need-you” starting point. Rather, the time has come for Armenia, Azerbaijan, and Georgia to decide on their own where their interests coincide with those of the West. That’s where we and they can begin to develop meaningful relationships, rather than trying to invent a veneer to cover differences—as in the case of Azerbaijan’s record on human rights.

Another recent article in Newsweek, by Theodore Gerber and Jane Zavisca, raised questions about promoting democracy and human rights where populations and elites are skeptical of U.S. motivations in promoting these issues. Fairly, the article questions the effectiveness of the traditional instruments of promoting opposition political parties and local NGOs as a way of winning “hearts and minds” in the former Soviet Union. Unfortunately, these traditional instruments tend to emphasize the attractiveness of the “American way of life” through student and scientific exchanges. This offers a variant on the soft regionalism theme advanced in the Brookings paper. Both require a receptivity to change that both elites and populations increasingly find threatening. Developing a values-based relationship is difficult when values diverge.

To the extent our interests do not coincide, then the Western policy focus must be transactional and rest exclusively on conflict prevention and/or amelioration. It also should not shy away from pressing all three South Caucasian states on their obligations to observe international standards regarding human rights, democracy, and freedom of expression.

Event Information

To build on its longstanding interest in the evolving transatlantic relationship and to address the serious differences that have emerged between America and Europe after the September 11 terrorist attacks and throughout the ongoing war on terrorism, Brookings announces the launch of its new Center on the United States and Europe. The center offers a forum for research, high-level dialogue, and public debate on issues affecting U.S.-Europe relations.

At the inaugural conference to launch the new center, experts discussed the theme "The United States and Europe: One Year after the War in Iraq." Panelists at this special event included Javier Solana, Robert Kagan, Charles Grant, Klaus Scharioth, Andrew Moravcsik, Martin Indyk, Ulrike Guerot, Pascale Andreani, Cesare Merlini, Reuel Marc Gerecht, Gilles Andreani and others.

Transcript

• Transcript (.pdf)

Event Materials

• cuse20040421

Event Information

Welcome and Introduction:
Philip H. Gordon , Director, Center on the United States and Europe

Is the European Union Failing? Politics and Policy after the Referendums
Philip H. Gordon , Director, Center on the United States and Europe

Panelists:
Gerard Baker, The Times (London)
Joschka Fischer, Member of Bundestag and former German Foreign Minister
Noëlle Lenoir, President of the European Institute of HEC, former French Minister for European Affairs
Andrew Moravcsik, Princeton University/Brookings

Is Russia Lost? The Future of Russian Democracy and Relations with the West
Fiona Hill, Senior Fellow, The Brookings Institution

Panelists:
Daniel Fried, U.S. Assistant Secretary of State for European Affairs
Anatol Lieven, New America Foundation
Strobe Talbott, President, The Brookings Institution
Dmitri Trenin, Carnegie Moscow Center

Is America above the Law? A U.S.-Europe Dialogue about the War on Terror
Jeremy Shapiro, Director of Research, Center on the United States and Europe

Panelists:
Joschka Fischer, Member of Bundestag and former German Foreign Minister
Tom Malinowski, Human Rights Watch
Pauline Neville-Jones, Chair, British Conservative Party National and International Security Group
Victoria Toensing, former U.S. Justice Department Official
Ruth Wedgwood, Johns Hopkins-SAIS

Event Information

On May 20, 2008, the Center on the United States and Europe held its fifth annual conference. As is in previous years, the Conference brought together leading scholars, officials, and policymakers from both sides of the Atlantic to examine issues shaping the transatlantic relationship and to assess the evolving roles of the United States and Europe in the global arena.

Gary Schmitt of the American Enterprise Institute; Sir Lawrence Freedman of King’s College, London; Gideon Rachman of the Financial Times; former Norwegian Foreign Minister Jan Petersen; and Strobe Talbott, President of The Brookings Institution joined other prominent panelists and CUSE scholars for this year’s sessions. The series of panel discussions explored transatlantic relations beyond the Bush presidency, Sarkozy’s plans for France’s EU presidency, and the future of Russia under Medvedev.

Transcript

• Transcript (.pdf)

Event Materials

• 0520_europe

Event Information

With a U.S. Administration still popular across Europe and a new Lisbon Treaty designed to enhance the diplomatic reach of the European Union, transatlantic relations should now be at their best in years. But this is clearly not the case, with the strategic partners often looking in opposite directions. While the United States channels its foreign policy attention on the war in Afghanistan, counterterrorism and nuclear non-proliferation, Europe is turning inward. Despite its ambitions, the European Union has yet to achieve the great global role to which it aspires, or to be the global partner that Washington seeks. Moreover, the Greek financial crisis has raised questions about the very survival of the European project.

On June 2, the Center on the United States and Europe (CUSE) at Brookings and the Heinrich Böll Foundation hosted experts and top officials from both sides of the Atlantic for the 2010 CUSE Annual Conference. Panelists explored critical issues shaping the future of transatlantic relations in the post-Lisbon Treaty era, including Europe’s Eastern neighborhood and the role Russia plays, and the impact of the Eurozone crisis.

After each panel, participants took audience questions.

Audio

• From the Lisbon Treaty to the Eurozone Crisis: A New Beginning or the Unraveling of Europe?
• From the Lisbon Treaty to the Eurozone Crisis: A New Beginning or the Unraveling of Europe?
• From the Lisbon Treaty to the Eurozone Crisis: A New Beginning or the Unraveling of Europe?

Transcript

• Transcript (.pdf)

Event Materials

• 20100602_eurozone

This year shone a bleak light on the deep racial divides of the U.S. The flash-points of Ferguson, Baltimore and Chicago gave new impetus to movements to reform the criminal justice system and policing. But behind the headlines, the evidence for wide, stubborn race gaps on economic and social indicators is perhaps more troubling still. 

Especially for black Americans, race gaps in family formation, employment, household income, wealth, educational quality, and neighborhood segregation have shown little­—if any—sign of improvement in recent years. The very first Social Mobility Memos was about the barriers to black upward mobility, and in recent months, we have been focusing increasingly on issues of race, place, and opportunity, and here, to close 2015, we recap 15 of our pieces on the subject, including pieces from our colleague Jonathan Rothwell on college, drugs and neighborhoods, and the first Brookings piece from our new nonresident scholar, William Julius Wilson. 

Our hope is that 2016 will see a much greater focus on race and opportunity in America. 

1. Five Bleak Facts on Black Opportunity, Richard V. Reeves and Edward Rodrigue

What would Martin Luther King Jr. think of America in 2015 if he’d lived to see his eighty-sixth birthday? No doubt, he’d be pleased by the legal and political advances of black Americans, crowned by the election and re-election of President Obama.

2. Four charts that show the opportunity gap isn’t going away, Richard V. Reeves

Child poverty rates are coming down slowly, according to figures from the Pew Research Center, except among one racial group: African Americans. This is the latest reminder that the economic gap between black and white Americans is not closing over time. Indeed, on some dimensions, it is widening.

3. Obama’s Post-Presidency? Tackling the Social Mobility Challenge for Black Men, Richard V. Reeves

President Obama’s initiative to boost opportunities for young black men—My Brother’s Keeper—looks to be a post-presidential plan, as much as presidential one. Valerie Jarrett, his closest aide, said that it was a vocation the president and first lady Michelle Obama will undertake “for the rest of their lives…That’s a moral, social responsibility that they feel will transcend the time that he’s president.”

4. School readiness gaps are improving, except for black kids, Richard V. Reeves

Between 1998 and 2010, inequality in school readiness—in terms of math, reading, and behavior—declined quite significantly, according to Reardon and Portilla’s analysis of ECLS data, being presented today at the Association for Public Policy Analysis and Management Annual Conference. This positive trend can be seen for gaps in both income and race (or at least, for Hispanic-white differences).

5. Rich Neighborhood, Poor Neighborhood: How Segregation Threatens Social Mobility, Patrick Sharkey

Racial segregation in American cities has declined slowly, but steadily over the past four decades. This is good news. Over the same timeframe, however, the level of economic segregation has been rising. Compared to 1970, the rich are now much more likely to live in different communities than the poor.

6. Segregation and concentrated poverty in the nation’s capital, Stuart M. Butler and Jonathan Grabinsky

The social mobility gap between black and white Americans has barely narrowed in the last decades, and sharp differences in access to opportunity persist. This racial opportunity gap can, in part, be traced back to the neighborhoods where whites and blacks grow up: research from urban sociologists like Patrick Sharkey and Robert Sampson shows the damaging effects racial segregation and concentrated neighborhood poverty can have on children’s life chances. Washington, D.C. is a case in point.

7. The other side of Black Lives Matter, William Julius Wilson

Several decades ago I spoke with a grieving mother living in one of the poorest inner-city neighborhoods on Chicago’s South Side. A stray bullet from a gang fight had killed her son, who was not a gang member. She lamented that his death was not reported in any of the Chicago newspapers or in the Chicago electronic media.

8. Guns and race: The different worlds of black and white Americans, Richard V. Reeves and Sarah Holmes

“The nation’s consciousness has been raised by the repeated acts of police brutality against blacks. But the problem of public space violence—seen in the extraordinary distress, trauma and pain many poor inner-city families experience following the killing of a family member or close relative—also deserves our special attention.”

9. Measuring the Racial Opportunity Gap, Richard V. Reeves and Quentin Karpilow

The U.S. is sharply divided by race, not least in terms of the opportunities for children—a point that a new report from the Annie E. Casey Foundation vividly shows. At every life stage, there are gaps between kids of different colors.

10. How the War on Drugs Damages Black Social Mobility, Jonathan Rothwell

The social mobility of black Americans has suffered collateral damage from the “War on Drugs.” Being convicted of a crime has devastating effects on the employment prospects and incomes of ex-felons and their children, as my Brookings colleagues and other scholars have found. These findings are often used to motivate efforts to reduce criminal behavior. They should also motivate changes in our criminal justice system, which unfairly punishes black Americans—often for victimless crimes that whites are at least as likely to commit.

11. Black Students at Top Colleges: Exceptions, Not the Rule, Jonathan Rothwell

A generation has been lost in the journey towards race equality in terms of income. The income gap between blacks and whites has been stuck since 1980. Why? Dozens of factors count, of course, but one in particular is worth further exploration: the underrepresentation of black students in elite colleges. As I noted in a previous blog, this could help to explain why blacks earn less than whites, even in the same occupation and with the same level of education.

12. The stubborn race and class gaps in college quality, Jonathan Rothwell

Increasing the number of low-income adults going to—and through—college is an important step towards greater social mobility and reduced income inequality. College is also an important tool for tackling race gaps. But the challenge is not just about quantity: college quality counts for a good deal, too.

13. Single black female BA seeks educated husband: Race, assortative mating and inequality, Edward Rodrigue and Richard V. Reeves

There is a growing trend in the United States towards assortative mating—a clunky phrase that refers to people’s tendency to choose spouses with similar educational attainment. Rising numbers of college-educated women play a key role in this change. It is much easier for college graduates to find and marry each other when there are more equal numbers of each gender within an educational bracket.

14. Sociology’s revenge: Moving to Opportunity (MTO) revisited, Jonathan Rothwell

Neighborhoods remain the crucible of social life, even in the internet age. Children do not stream lectures—they go to school. They play together in parks and homes, not over Skype. Crime and fear of crime are experienced locally, as is the police response to it.

15. Space, place, race: Six policies to improve social mobility, Richard V. Reeves and Allegra Pocinki

As the income inequality discussion continues to simmer across the country, municipal minimum wage ordinances have become hot topics of conversation in many cities. In January 2016, Seattle will implement its second step-up in the local minimum wage in 9 months, reaching $13 for many employers in the city and edging closer to a $15 an hour minimum that will apply to most firms by 2019. San Francisco will reach a $15 an hour minimum by July 2018. Yet cities as diverse as Birmingham, Chicago, Los Angeles, and Louisville have enacted or proposed similar minimum wage laws. It is too early to discern true impact of these local wage ordinances, but speculation abounds regarding whether or how the higher wage will affect firms and the earnings of low-wage workers.

Less prominent in debate and discussion about the minimum wage is the potential impact that higher minimum wage rates may have for nonprofit organizations. Nonprofits perform many critical functions in our communities—often serving the most at-risk and disadvantaged. Yet, fiscal constraints often place a low ceiling on what many nonprofits can pay frontline staff. As a result, many different types of nonprofit organizations—child care centers, home health care organizations, senior care providers—pay staff at rates near or below the targets set by the recent crop of local minimum wage laws. Our popular image of a minimum wage worker is the teen-age cashier at a drive-through window or the sales clerk at a retail store in the local strip mall, but many workers in these “helping professions” are being paid low wages.

Increases in the minimum wage are occurring at the same time that many nonprofit service organizations are confronted with fixed or declining revenue streams. Facing fiscal pressure, nonprofit service organizations may pursue one or more coping strategies. In addition to reductions in staffing or hours, commonly expected responses, nonprofits may cut back services offered, scale back service areas, or favor clients that can afford higher fees.

Such responses could reduce the amount and quality of the services provided to vulnerable populations. For example, elderly populations on fixed incomes may have fewer options for home care. Working poor parents may find higher child care costs prohibitively expensive. Employment service organizations may find it harder to place hard-to-serve jobseekers in jobs due to more competitive applicant pools.

At the same time, higher minimum wages could have positive consequences for nonprofit staffing and capacity. Higher wages could reduce employee turnover and increase staff morale and productivity. Organizations may not have to grapple with the contradiction of serving low-income persons, but paying modest wages.

The most recent set of wage ordinances take cities to unknown territory. Anticipating potential negative effects, Chicago has exempted individuals in subsidized employment programs from its recent minimum wage ordinance. The city of Seattle has set aside funds to help nonprofits meet the higher local minimum wage, but many nonprofit funding streams are beyond the city’s control and are not seeing similar adjustments.

In the coming years, more research on how local nonprofits are affected by local minimum wage laws needs to occur. We should expect there to be a mix of positive and negative effects within a particular nonprofit organization and across different types of organizations. Nonprofit organizations should be engaged as stakeholders in debates around higher local minimum wages. And, nonprofits should actively engage in research efforts to document the impact of higher wages. In particular, nonprofits should work to compile data that can compare staffing, service delivery, and program outcomes before and after wage laws phase-in. Such data could provide important insight into the impact of local wage ordinances.

We also should be careful not to confuse other challenges confronting the nonprofit sector with the impact of higher minimum wages. For example, private philanthropy to human service nonprofits has failed to keep up with rising need and declining public sector revenue streams in most communities—realities that may pose more serious challenges than minimum wage laws, but ones without an obvious scapegoat.

In the end, ongoing debate around local minimum wage ordinances should provide us with the opportunity to re-examine how we support community-based nonprofits as a society and assess whether that support fits with all that we expect the nonprofit sector to accomplish for children and families in our communities. 

In his new book, “The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War,” Northwestern University economist Bob Gordon argues that the century between 1870 and 1970 was exceptionally good for U.S. households (particularly 1920 to 1950) but that the years since 1970 have been disappointing and the future looks disappointing too.

His postscript includes a few thoughts that deserve immediate attention in today’s economic policy debates: Whatever the causes of the distressing slowdown in the growth of productivity (the amount of stuff produced for each hour of work) and the increase in inequality, what policies might both increase productivity and decrease inequality? 

Many years ago, economist Art Okun argued that we had to choose between policies that increased efficiency and those that increased equity. Perhaps. But  if there are policies that could achieve both, it’s time to try them. 

Mr. Gordon lists several at the end of his book, some conventional and others less so. They include: 

1. Make the earned-income tax credit (a bonus paid by the government to low-wage workers) more comprehensive and generous, a complement to raising the minimum wage. The earned-income tax credit, most economists agree, encourages work. 

2. Reduce the share of Americans who are in prison, which is costly, disproportionately hurts the poor, and has long-lasting negative effects on former prisoners and their families. Also, legalize drug use to save money on enforcement, raise tax revenue, and eliminate the negative consequence a criminal record has on employment.

3. Shift financing of K-12 schooling from local property taxes to statewide revenue sources to reduce inequality and improve outcomes. Shift college financing from loans to income-contingent repayment administered through the income tax system, which is what Australia does.

4. Roll back regulations that hurt the economy and the less affluent, including copyright and patent laws (which have gone too far), occupational licensing (which is a barrier to entry and employment), and zoning and land-use regulations (which boost housing costs). 

5. Reform immigration laws to encourage high-skilled workers, including those trained at U.S. graduate schools. 

Mr. Gordon notes (Page 314) “the extraordinary investment” by state and local governments in education and infrastructure between 1870 and 1940 and cites the substantial boost to productivity created by the interstate highway system. He doesn’t put increased public infrastructure investment on his list, though it belongs there. 

Every presidential candidate should be asked what policies he or she would offer to increase the pace of U.S. productivity growth and to narrow the widening gap between winners and losers in the economy. Bob Gordon’s list is a good place to start.

Editor's note: this post first appeared in the Wall Street Journal Washington Wire blog.

Gary Burtless, a senior fellow in Economic Studies, explains new research on the growing longevity gap between high-income and low-income Americans, especially among the aged.

“Life expectancy difference of low income workers, middle income workers, and high income workers has been increasing over time,” Burtless says. “For people born in 1920 their life expectancy was not as long typically as the life expectancy of people who were born in 1940. But those gains between those two birth years were very unequally distributed if we compare people with low mid-career earnings and people with high mid-career earnings.” Burtless also discusses retirement trends among the educated and non-educated, income inequality among different age groups, and how these trends affect early or late retirement rates.

Also stay tuned for our regular economic update with David Wessel, who also looks at the new research and offers his thoughts on what it means for Social Security.

Show Notes

Later retirement, inequality and old age, and the growing gap in longevity between rich and poor

Disparity in Life Spans of the Rich and the Poor Is Growing

Subscribe to the Brookings Cafeteria on iTunes, listen on Stitcher, and send feedback email to BCP@Brookings.edu.

MEDIA RELEASE

Low-Income Boys in Higher Inequality Areas Drop Out of School More Often than Low-Income Boys in Lower Inequality Areas, Limiting Social Mobility, New Brookings Paper Finds
“Economic despair” may contribute if those at the bottom do not believe they have the ability to achieve middle class status

Greater income gaps between those at the bottom and middle of the income distribution lead low-income boys to drop out of high school more often than their counterparts in lower inequality areas, suggesting that there is an important link between income inequality and reduced rates of upward mobility, according to a new paper presented today at the Brookings Panel on Activity. The finding has implications for social policy, implying a need for interventions that focus on bolstering low-income adolescents' perceptions of what they could achieve in life.

In “Income Inequality, Social Mobility, and the Decision to Drop Out Of High School,” Brookings Nonresident Senior Fellow and University of Maryland economics professor Melissa S. Kearney and Wellesley economics professor Phillip B. Levine propose a channel through which income inequality might lead to less upward mobility—often assumed to be the case but not yet fully proven. The conventional thinking among economists is that income inequality provides incentives for individuals to invest more in order to achieve the higher income position in society, but Kearney and Levine observe that if low-income youth view middle-class life as out of reach, they might decide to invest less in their own economic future.

See an interactive map of inequality by state, plus more findings »

The authors focus on income inequality in the lower half of the income distribution, as measured by income gaps between the 10th and 50th percentiles of the income distribution rather than income gaps between the the top and bottom of the income distribution, which has been more of a focus in popular culture. They show this "lower-tail" inequality is more relevant to the lives of poor youth because the middle is a more realistic ambition. Furthermore, their research could reconcile a puzzle: social mobility does not appear to be falling, despite the rise in income inequality. But, as Kearney and Levine point out, U.S. income inequality has been rising because the top of the distribution has been pulling away from the middle, not because the bottom is falling farther behind the middle.

The authors look specifically at high school drop-out rates through a geographic lens, noting the link between highly variable rates of high school completion and income inequality across the country. One-quarter or more of those who start high school in the higher inequality states of Louisiana, Mississippi, Georgia, and the District Columbia fail to graduate in a four-year period, as compared to only around 10 percent in Vermont, Wisconsin, North Dakota, and Nebraska—lower inequality states. Their econometric analysis goes on to show that low-income youth—boys in particular—are 4.1 percentage points more likely to drop out of high school by age 20 if they live in a high-inequality location relative to those who live in a low-inequality location.

Kearney and Levine examine a number of potential explanations for this link, including differences in educational inputs, poverty rates, demographic composition, and other factors. Ultimately, the evidence suggests that there is something specific about areas with greater income gaps that lead low-income boys there to drop out of school at higher rates than low-income boys elsewhere. The authors' research suggests that adolescents make educational decisions based on their perceived returns to investing in their educational development: a greater distance to climb to get to the middle of the income distribution could lead to a sense that economic success is unlikely—what they term “economic despair.”

"Income inequality can negatively affect the perceived returns to investment in education from the perspective of an economically disadvantaged adolescent,” they write. “Perceptions beget perceptions."

Digging into reasons students themselves give for dropping out, they find that low-income students from more unequal places are more likely to give up on their educational pursuits. Surprisingly, survey evidence shows that academic performance does not have as large an impact on low-income students in high inequality states: 51 percent of dropouts in the least unequal states reported that they dropped out because they were performing poorly, as compared to only 21 percent of students who dropped out in the most unequal states.

The finding suggests that economic despair could play an important role: if a student perceives a lower benefit to remaining in school, then he or she will choose to drop out at a lower threshold of academic difficulty. They also note that while the wage premium of completing high school should reduce the dropout rate, household income inequality has an offsetting negative effect.

The choice between staying in school and dropping out may reflect actual or perceived differences from the benefits of graduating. For instance, the authors note their past research showing that youth from low-income households who grow up in high lower-tail inequality states face lifetime incomes that are over 30 percent lower than similar children in lower inequality states. They also highlight other research showing that the overwhelming majority of 9th graders aspire to go to college, but by 11th grade, low-SES students are substantially less likely to expect they will enroll in college, even among those students with high test scores.

"There are important policy implications for what types of programs are needed to improve the economic trajectory of children from low-SES backgrounds," they write. "Successful interventions would focus on giving low income youth reasons to believe they have the opportunity to succeed. Such interventions could focus on expanded opportunities that would improve the actual return to staying in school, but they could also focus on improving perceptions by giving low-income students a reason to believe they can be the "college-going type." For example, interventions might take the form of mentoring programs that connect youth with successful adult mentors and school and community programs that focus on establishing high expectations and providing pathways to graduation. They could also take the form of early-childhood parenting programs that work with parents to create more nurturing home environments to build self-esteem and engender positive behaviors."

Read the full paper from Kearney and Levine here »

Downloads

• Download the full paper

Video

• How “economic despair” affects high school graduation rates for America’s poorest students

At the very heart of the American idea is the notion that, unlike in other places, we can start from nothing and through hard work have everything. That nothing we can imagine is beyond our reach. That we will pull up stakes, go anywhere, do anything to make our dreams come true. But what if that's just a myth? What if the truth is something very different? What if we are…stuck?

I. What does it mean to be an American?

Full disclosure: I'm British. Partial defense: I was born on the Fourth of July. I also have made my home here, because I want my teenage sons to feel more American. What does that mean? I don't just mean waving flags and watching football and drinking bad beer. (Okay, yes, the beer is excellent now; otherwise, it would have been a harder migration.) I'm talking about the essence of Americanism. It is a question on which much ink—and blood—has been spent. But I think it can be answered very simply: To be American is to be free to make something of yourself. An everyday phrase that's used to admire another ("She's really made something of herself") or as a proud boast ("I'm a self-made man!"), it also expresses a theological truth. The most important American-manufactured products are Americans themselves. The spirit of self-creation offers a strong and inspiring contrast with English identity, which is based on social class. In my old country, people are supposed to know their place. British people, still constitutionally subjects of Her Majesty Queen Elizabeth, can say things like "Oh, no, that's not for people like me." Infuriating.

Americans do not know their place in society; they make their place. American social structures and hierarchies are open, fluid, and dynamic. Mobility, not nobility. Or at least that's the theory. Here's President Obama, in his second inaugural address: "We are true to our creed when a little girl born into the bleakest poverty knows that she has the same chance to succeed as anybody else because she is an American; she is free, and she is equal, not just in the eyes of God but also in our own."

Politicians of the left in Europe would lament the existence of bleak poverty. Obama instead attacks the idea that a child born to poor parents will inherit their status. "The same chance to succeed as anybody else because she is an American…."

Americanism is a unique and powerful cocktail, blending radical egalitarianism (born equal) with fierce individualism (it's up to you): equal parts Thomas Paine and Horatio Alger. Egalitarian individualism is in America's DNA. In his original draft of the Declaration of Independence, Thomas Jefferson wrote that "men are created equal and independent," a sentiment that remained even though the last two words were ultimately cut. It was a declaration not only of national independence but also of a nation of independents.

The problem lately is not the American Dream in the abstract. It is the growing failure to realize it. Two necessary ingredients of Americanism—meritocracy and momentum—are now sorely lacking.

America is stuck.

Almost everywhere you look—at class structures, Congress, the economy, race gaps, residential mobility, even the roads—progress is slowing. Gridlock has already become a useful term for political inactivity in Washington, D. C. But it goes much deeper than that. American society itself has become stuck, with weak circulation and mobility across class lines. The economy has lost its postwar dynamism. Racial gaps, illuminated by the burning of churches and urban unrest, stubbornly persist.

In a nation where progress was once unquestioned, stasis threatens. Many Americans I talk to sense that things just aren't moving the way they once were. They are right. Right now this prevailing feeling of stuckness, of limited possibilities and uncertain futures, is fueling a growing contempt for institutions, from the banks and Congress to the media and big business, and a wave of antipolitics on both left and right. It is an impotent anger that has yet to take coherent shape. But even if the American people don't know what to do about it, they know that something is profoundly wrong.

II. How stuck are we?

Let's start with the most important symptom: a lack of social mobility. For all the boasts of meritocracy—only in America!—Americans born at the bottom of the ladder are in fact now less likely to rise to the top than those situated similarly in most other nations, and only half as likely as their Canadian counterparts. The proportion of children born on the bottom rung of the ladder who rise to the top as adults in the U.S. is 7.5 percent—lower than in the U.K. (9 percent), Denmark (11.7), and Canada (13.5). Horatio Alger has a funny Canadian accent now.

It is not just poverty that is inherited. Affluent Americans are solidifying their own status and passing it on to their children more than the affluent in other nations and more than they did in the past. Boys born in 1948 to a high-earning father (in the top quarter of wage distribution) had a 33 percent chance of becoming a top earner themselves; for those born in 1980, the chance of staying at the top rose sharply to 44 percent, according to calculations by Manhattan Institute economist Scott Winship. The sons of fathers with really high earnings—in the top 5 percent—are much less likely to tumble down the ladder in the U. S. than in Canada (44 percent versus 59 percent). A "glass floor" prevents even the least talented offspring of the affluent from falling. There is a blockage in the circulation of the American elite as well, a system-wide hardening of the arteries.

Exhibit A in the case against the American political elites: the U. S. tax code. To call it Byzantine is an insult to medieval Roman administrative prowess. There is one good reason for this complexity: The American tax system is a major instrument of social policy, especially in terms of tax credits to lower-income families, health-care subsidies, incentives for retirement savings, and so on. But there are plenty of bad reasons, too—above all, the billions of dollars' worth of breaks and exceptions resulting from lobbying efforts by the very people the tax system favors.

So fragile is the American political ego that we can't go five minutes without congratulating ourselves on the greatness of our system, yet policy choices exacerbate stuckness.

The American system is also a weak reed when it comes to redistribution. You will have read and heard many times that the United States is one of the most unequal nations in the world. That is true, but only after the impact of taxes and benefits is taken into account. What economists call "market inequality," which exists before any government intervention at all, is much lower—in fact it's about the same as in Germany and France. There is a lot going on under the hood here, but the key point is clear enough: America is unequal because American policy moves less money from rich to poor. Inequality is not fate or an act of nature. Inequality is a choice.

These are facts that should shock America into action. For a nation organized principally around the ideas of opportunity and openness, social stickiness of this order amounts to an existential threat. Although political leaders declare their dedication to openness, the hard issues raised by social inertia are receiving insufficient attention in terms of actual policy solutions. Most American politicians remain cheerleaders for the American Dream, merely offering loud encouragement from the sidelines, as if that were their role. So fragile is the American political ego that we can't go five minutes without congratulating ourselves on the greatness of our system, yet policy choices exacerbate stuckness and ensure decline.

In Britain (where stickiness has historically been an accepted social condition), by contrast, the issues of social mobility and class stickiness have risen to the top of the political and policy agenda. In the previous U.K. government (in which I served as director of strategy to Nick Clegg, the deputy prime minister), we devoted whole Cabinet meetings to the problems of intergenerational mobility and the development of a new national strategy. (One result has been a dramatic expansion in pre-K education and care: Every 3- and 4-year-old will soon be entitled to 30 hours a week for free.) Many of the Cabinet members were schooled at the nation's finest private high schools. A few had hereditary titles. But they pored over data and argued over remedies—posh people worrying over intergenerational income quintiles.

Why is social mobility a hotter topic in the old country? Here is my theory: Brits are acutely aware that they live in a class-divided society. Cues and clues of accent, dress, education, and comportment are constantly calibrated. But this awareness increases political pressure to reduce these divisions. In America, by contrast, the myth of classlessness stands in the way of progress. The everyday folksiness of Americans—which, to be clear, I love—serves as a social camouflage for deep economic inequality. Americans tell themselves and one another that they live in a classless land of open opportunity. But it is starting to ring hollow, isn't it?

III. For black Americans, claims of equal opportunity have, of course, been false from the founding.

They remain false today. The chances of being stuck in poverty are far, far greater for black kids. Half of those born on the bottom rung of the income ladder (the bottom fifth) will stay there as adults. Perhaps even more disturbing, seven out of ten black kids raised in middle-income homes (i.e., the middle fifth) will end up lower down as adults. A boy who grows up in Baltimore will earn 28 percent less simply because he grew up in Baltimore: In other words, this supersedes all other factors. Sixty-six percent of black children live in America's poorest neighborhoods, compared with six percent of white children.

Recent events have shone a light on the black experience in dozens of U. S. cities.

Behind the riots and the rage, the statistics tell a simple, damning story. Progress toward equality for black Americans has essentially halted. The average black family has an income that is 59 percent of the average white family's, down from 65 percent in 2000. In the job market, race gaps are immobile, too. In the 1950s, black Americans were twice as likely to be unemployed as whites. And today? Still twice as likely.

From heeding the call "Go west, young man" to loading up the U-Haul in search of a better job, the instinctive restlessness of America has always matched skills to work, people to opportunities, labor to capital.

Race gaps in wealth are perhaps the most striking of all. The average white household is now thirteen times wealthier than the average black one. This is the widest gap in a quarter of a century. The recession hit families of all races, but it resulted in a wealth wipeout for black families. In 2007, the average black family had a net worth of $19,200, almost entirely in housing stock, typically at the cheap, fragile end of the market. By 2010, this had fallen to $16,600. By 2013—by which point white wealth levels had started to recover—it was down to $11,000. In national economic terms, black wealth is now essentially nonexistent.

Half a century after the passing of the Civil Rights Act, the arc of history is no longer bending toward justice. A few years ago, it was reasonable to hope that changing attitudes, increasing education, and a growing economy would surely, if slowly, bring black America and white America closer together. No longer. America is stuck.

IV. The economy is also getting stuck.

Labor productivity growth, measured as growth in output per hour, has averaged 1.6 percent since 1973. Male earning power is flatlining. In 2014, the median full-time male wage was $50,000, down from $53,000 in 1973 (in the dollar equivalent of 2014). Capital is being hoarded rather than invested in the businesses of the future. U. S. corporations have almost $1.5 trillion sitting on their balance sheets, and many are busily buying up their own stock. But capital expenditure lags, hindering the economic recovery.

New-business creation and entrepreneurial activity are declining, too. As economist Robert Litan has shown, the proportion of "baby businesses" (firms less than a year old) has almost halved since the late 1970s, decreasing from 15 percent to 8 percent—the hallmark of "a steady, secular decline in business dynamism." It is significant that this downward trend set in long before the Great Recession hit. There is less movement between jobs as well, another symptom of declining economic vigor.

Americans are settling behind their desks—and also into their neighborhoods. The proportion of American adults moving house each year has decreased by almost half since the postwar years, to around 12 percent. Long-distance moves across state lines have as well. This is partly due to technological advances, which have weakened the link between location and job prospects, and partly to the growth of economic diversity in cities; there are few "one industry" towns today. But it is also due to a less vibrant housing market, slower rates of new business creation, and a lessening in Americans' appetite for disruption, change, and risk.

This geographic settling is at odds with historic American geographic mobility. From heeding the call "Go west, young man" to loading up the U-Haul in search of a better job, the instinctive restlessness of America has always matched skills to work, people to opportunities, labor to capital. Rather than waiting for help from the government, or for the economic tide to turn back in their favor, millions of Americans changed their life prospects by changing their address. Now they are more likely to stay put and wait. Others, especially black Americans, are unable to escape the poor neighborhoods of their childhood. They are, as the title of an influential book by sociologist Patrick Sharkey puts it, Stuck in Place.

There are everyday symptoms of stuckness, too. Take transport. In 2014, Americans collectively spent almost seven billion hours stuck motionless in traffic—that's a couple days each. The roads get more jammed every year. But money for infrastructure improvements is stuck in a failing road fund, and the railophobia of politicians hampers investment in public transport.

Whose job is it to do something about this? The most visible symptom of our disease is the glue slowly hardening in the machinery of national government. The last two Congresses have been the least productive in history by almost any measure chosen, just when we need them to be the most productive. The U. S. political system, with its strong separation among competing centers of power, relies on a spirit of cross-party compromise and trust in order to work. Good luck there.

V. So what is to be done?

As with anything, the first step is to admit the problem. Americans have to stop convincing themselves they live in a society of opportunity. It is a painful admission, of course, especially for the most successful. The most fervent believers in meritocracy are naturally those who have enjoyed success. It is hard to acknowledge the role of good fortune, including the lottery of birth, when describing your own path to greatness.

There is a general reckoning needed. In the golden years following World War II, the economy grew at 4 percent per annum and wages surged. Wealth accumulated. The federal government, at the zenith of its powers, built interstates and the welfare system, sent GIs to college and men to the moon. But here's the thing: Those days are gone, and they're not coming back. Opportunity and growth will no longer be delivered, almost automatically, by a buoyant and largely unchallenged economy. Now it will take work.

The future success of the American idea must now be intentional.

Entrepreneurial, mobile, aspirational: New Americans are true Americans. We need a lot more of them.

There are plenty of ideas for reform that simply require will and a functioning political system. At the heart of them is the determination to think big again and to vigorously engage in public investment. And we need to put money into future generations like our lives depended on it, because they do: Access to affordable, effective contraception dramatically cuts rates of unplanned pregnancy and gives kids a better start in life. Done well, pre-K education closes learning gaps and prepares children for school. More generous income benefits stabilize homes and help kids. Reading programs for new parents improve literacy levels. Strong school principals attract good teachers and raise standards. College coaches help get nontraditional students to and through college. And so on. We are not lacking ideas. We are lacking a necessary sense of political urgency. We are stuck.

But we can move again if we choose.

In addition to a rejuvenation of policy in all these fields, there are two big shifts required for an American twenty-first-century renaissance: becoming open to more immigration and shifting power from Washington to the cities.

VI. America needs another wave of immigration.

This is in part just basic math: We need more young workers to fund the old age of the baby boomers. But there is more to it than that. Immigrants also provide a shot in the arm to American vitality itself. Always have, always will. Immigrants are now twice as likely to start a new business as native-born Americans. Rates of entrepreneurialism are declining among natives but rising among immigrants.

Immigrant children show extraordinary upward-mobility rates, shooting up the income-distribution ladder like rockets, yet by the third or fourth generation, the rates go down, reflecting indigenous norms. Among children born in Los Angeles to poorly educated Chinese immigrants, for example, an astonishing 70 percent complete a four-year-college degree. As the work of my Brookings colleague William Frey shows, immigrants are migrants within the U. S., too, moving on from traditional immigrant cities—New York, Los Angeles—to other towns and cities in search of a better future. Entrepreneurial, mobile, aspirational: New Americans are true Americans. We need a lot more of them.

This makes a mockery of our contemporary political "debates" about immigration reform, which have become intertwined with race and racism. Some Republicans tap directly into white fears of an America growing steadily browner. More than four in ten white seniors say that a growing population of immigrants is a "change for the worse"; half of white boomers believe immigration is "a threat to traditional American customs and values." But immigration delves deeper into the question of American identity than it does even issues of race. Immigrants generate more dynamism and aspiration, but they are also unsettling and challenging. Where this debate ends will therefore tell us a great deal about the trajectory of the nation. An America that closes its doors will be an America that has chosen to settle rather than grow, that has allowed security to trump dynamism.

VII. The second big shift needed to get America unstuck is a revival of city and state governance.

Since the American Dream is part of the national identity, it seems natural to look to the national government to help make it a reality. But cities are now where the American Dream will live or die. America's hundred biggest metros are home to 67 percent of the nation's population and 75 percent of its economy. Americans love the iconography of the small town, even at the movies—but they watch those movies in big cities.

Powerful mayors in those cities have greater room for maneuvering and making an impact than the average U. S. senator. Even smaller cities and towns can be strongly influenced by their mayor.

There are choices to be made. Class divisions are hardening. Upward mobility has a very weak pulse. Race gaps are widening.

The new federalism in part is being born of necessity. National politics is in ruins, and national institutions are weakened by years of short-termism and partisanship. Power, finding a vacuum in D. C., is diffusive. But it may also be that many of the big domestic-policy challenges will be better answered at a subnational level, because that is where many of the levers of change are to be found: education, family planning, housing, desegregation, job creation, transport, and training. Amid the furor over Common Core and federal standards, it is important to remember that for every hundred dollars spent on education, just nine come from the federal government.

We may be witnessing the end of many decades of national-government dominance in domestic policy-making (the New Deal, Social Security, Medicare, welfare reform, Obamacare). The Affordable Care Act is important in itself, but it may also come to have a place in history as the legislative bookend to a long period of national-policy virtuosity.

The case for the new federalism need not be overstated. There will still be plenty of problems for the national government to fix, including, among the most urgent, infrastructure and nuclear waste. The main tools of macroeconomic policy will remain the Federal Reserve and the federal tax code. But the twentieth-century model of big federal social-policy reforms is in decline. Mayors and governors are starting to notice, and because they don't have the luxury of being stuck, they are forced to be entrepreneurs of a new politics simply to survive.

VIII. It is possible for America to recover its earlier dynamism, but it won't be easy.

The big question for Americans is: Do you really want to? Societies, like people, age. They might also settle down, lose some dynamism, trade a little less openness for a little more security, get a bit stuck in their ways. Many of the settled nations of old Europe have largely come to terms with their middle age. They are wary of immigration but enthusiastic about generous welfare systems and income redistribution. Less dynamism, maybe, but more security in exchange.

America, it seems to me, is not made to be a settled society. Such a notion runs counter to the story we tell ourselves about who we are. (That's right, we. We've all come from somewhere else, haven't we? I just got here a bit more recently.) But over time, our narratives become myths, insulating us from the truth. For we are surely stuck, if not settled. And so America needs to decide one way or the other. There are choices to be made. Class divisions are hardening. Upward mobility has a very weak pulse. Race gaps are widening. The worst of all worlds threatens: a European class structure without European welfare systems to dull the pain.

Americans tell themselves and the world that theirs is a society in which each and all can rise, an inspiring contrast to the hereditary cultures from which it sprang. It's one of the reasons I'm here. But have I arrived to raise my children here just in time to be stuck, too? Or will America be America again?

Editor's note: This piece originally appeared in Esquire.

Although a few political analysts have been focusing on the white working class for years, it is only in response to the rise of Donald Trump that this large group of Americans has begun to receive the attention it deserves. Now, thanks to a comprehensive survey that the Public Religion Research Institute (PRRI) undertook in collaboration with the Brookings Institution, we can speak with some precision about the distinctive attitudes and preferences of these voters.

There are different ways of defining the white working class. Along with several other survey researchers, PRRI defines this group as non-Hispanic whites with less than a college degree, with the additional qualification of being paid by the hour or by the job rather than receiving a salary. No definition is perfect, but this one works pretty well. Most working-class whites have incomes below $50,000; most whites with BAs or more have incomes above $50,000. Most working-class whites rate their financial circumstances as only fair or poor; most college educated whites rate their financial circumstances as good or excellent. Fifty-four percent of working-class whites think of themselves as working class or lower class, compared to only 18 percent of better-educated whites.

The PRRI/Brookings study finds that in many respects, these two groups of white voters see the world very differently. For example, 54 percent of college-educated whites think that America’s culture and way of life have improved since the 1950s; 62 percent of white working-class Americans think that it has changed for the worse. Sixty-eight percent of working-class whites, but only 47 percent of college-educated whites, believe that the American way of life needs to be protected against foreign influences. Sixty-six percent of working-class whites, but only 43 percent of college-educated whites, say that discrimination against whites has become as big a problem as discrimination against blacks and other minorities. In a similar vein, 62 percent of working-class whites believe that discrimination against Christians has become as big a problem as discrimination against other groups, a proposition only 38 percent of college educated whites endorse.

This brings us to the issue of immigration. By a margin of 52 to 35 percent, college-educated whites affirm that today’s immigrants strengthen our country through their talent and hard work. Conversely, 61 percent of white working-class voters say that immigrants weaken us by taking jobs, housing, and health care. Seventy-one percent of working-class whites think that immigrants mostly hurt the economy by driving down wages, a belief endorsed by only 44 percent of college-educated whites. Fifty-nine percent of working-class whites believe that we should make a serious effort to deport all illegal immigrants back to their home countries; only 33 percent of college-educated whites agree. Fifty-five percent of working-class whites think we should build a wall along our border with Mexico, while 61 percent of whites with BAs or more think we should not. Majorities of working-class whites believe that we should make the entry of Syrian refugees into the United States illegal and temporarily ban the entrance of non-American Muslims into our country; about two-thirds of college-educated whites oppose each of these proposals.

Opinions on trade follow a similar pattern. By a narrow margin of 48 to 46 percent, college-educated whites endorse the view that trade agreements are mostly helpful to the United States because they open up overseas markets while 62 percent of working-class whites believe that they are harmful because they send jobs overseas and drive down wages.

It is understandable that working-class whites are more worried that they or their families will become victims of violent crime than are whites with more education. After all, they are more likely to live in neighborhoods with higher levels of social disorder and criminal behavior. It is harder to explain why they are also much more likely to believe that their families will fall victim to terrorism. To be sure, homegrown terrorist massacres of recent years have driven home the message that it can happen to anyone, anywhere. We still need to explain why working-class whites have interpreted this message in more personal terms.

The most plausible interpretation is that working-class whites are experiencing a pervasive sense of vulnerability. On every front—economic, cultural, personal security—they feel threatened and beleaguered. They seek protection against all the forces they perceive as hostile to their cherished way of life—foreign people, foreign goods, foreign ideas, aided and abetted by a government they no longer believe cares about them. Perhaps this is why fully 60 percent of them are willing to endorse a proposition that in previous periods would be viewed as extreme: the country has gotten so far off track that we need a leader who is prepared to break so rules if that is what it takes to set things right.

Event Information

With a number elections now underway in Europe and the United States, populist politicians are gaining support by tapping into frustration with the lingering effects of the global financial crisis and the eurocrisis, mounting fears of terrorism, concerns surrounding record levels of migration, and growing doubt over political elites’ abilities to address these and other crises. The global economic order is already beginning to be impacted by the mounting political pressure against it. Trade deals such as the Trans-Pacific Partnership that form the cornerstone of the global economic order have met with significant resistance. Brexit’s reverberations have already been felt in international markets. Fissures within the European Union and American anxiety towards a U.S. global role could have a pronounced impact on the international economic system.

On July 14, the Brookings Project on International Order and Strategy (IOS) hosted an event tied to the recent publication of Nonresident Senior Fellow Daniel Drezner’s new paper, “Five Known Unknowns about the Next Generation Global Political Economy.” The event was an opportunity to discuss the future of the global economic order given rising populism and discontent with globalization. Panelists included Nonresident Senior Fellow Daniel Drezner, professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University; Caroline Atkinson, head of Google’s global public policy team and former White House deputy national security advisor for international economics; and David Wessel, director of the Brookings Hutchins Center on Fiscal and Monetary Policy.

Thomas Wright, director of IOS, provided brief opening remarks and moderated the discussion.

Video

• The future of the global economic order in an era of rising populism

Audio

• The future of the global economic order in an era of rising populism

Transcript

• Uncorrected Transcript (.pdf)

Event Materials

• 20160714_global_economic_order_transcript

Editor's Note: This blog post is part of The Primaries Project series, where veteran political journalists Jill Lawrence and Walter Shapiro, along with scholars in Governance Studies, examine the congressional primaries and ask what they reveal about the future of each political party and the future of American politics.

Even though they have come to dominate political campaigns, Super PACs and their shadowy counterparts are barely old enough to qualify for pre-kindergarten. Since these big-bucks independent groups have only been legal since 2010, we are still groping to understand the long-term role that Super PACs are apt to play in congressional politics—especially primaries.

With the demonization of the Koch Brothers by the Democrats and the attacks on liberal givers like Tom Steyer from the right, it is easy to assume that Super PAC donors are ideologues. Scorched-earth contests like the Mississippi Republican Senate primary further fuel this impression. Thad Cochran versus Chris McDaniel could be viewed as a proxy war between the GOP establishment (personified by Karl Rove's Super PAC American Crossroads) and the Tea Party (working through groups like Club for Growth Action).

But there is another very important, but far less publicized, role that Super PACs are playing in this year's congressional primaries. And when the internecine warfare in the Republican Party dies down, this type of Super PAC involvement in party primaries may become the norm.

Two recent GOP House primaries in winnable districts in New York illustrate this alternative model. In both cases, Super PACs took on the role—once left to the political parties—of vetting the candidates. Super PAC donors and their campaign consultants made their own decisions about who is electable and who has the right political pedigree. And in these New York primary contests without any clear ideological markers, heavy spending by Super PACs made all the difference.

Twenty-nine-year-old Elise Stefanik was a major beneficiary of Super PAC spending in her primary in New York's rural 21st District that runs from the Saratoga racetrack to the Canadian border. Stefanik has never run for public office before, but she boasts all of the right credentials to appeal to Washington Republican politicos. Even though she calls herself a "small businesswoman" in her TV ads, Stefanik served on the White House domestic policy staff under George W. Bush and was in charge of 2012 debate preparation for Paul Ryan.

Small wonder that American Crossroads and Karl Rove invested heavily in Stefanik's primary race, spending  $772,000 in attack ads excoriating her GOP rival, Matt Doheny. This was, by the way, the only House primary in the nation in which American Crossroads has made a significant investment to distinguish between Republicans. And the Super PAC's involvement was certainly not motivated by ideology. As the Watertown Daily Times put it on the eve of the Stefanik-Doheny primary, "It's difficult to point to a single issue on which a big divide exists between the two."

Yes, Doheny—a largely self-funding investment banker who had lost two prior races for the House—was a flawed Republican candidate. And Stefanik was the embodiment of the kind of message discipline beloved by campaign consultants. But it is hard to believe that electability alone prompted attack ads with tag lines like: "Matt Doheny—it would be a big mistake to send him to Congress."

American Crossroads, which spent more than either the Stefanik or Doheny campaigns, prevailed in the June 24th primary. Stefanik romped home with 61 percent of the primary vote.

The same pattern emerged in the Republican primary in New York's 1st District on the tip of Long Island. The major player this time was the US Jobs Council, which is heavily funded by hedge-fund mogul Robert Mercer, whose home is in the district. As Mother Jones reported in an article by Molly Redden, Mercer's Ahab-like obsession has been defeating Democratic incumbent Tim Bishop ever since the congressman voted for the Dodd-Frank financial reform legislation.

Both candidates in the Republican primary to oppose Bishop had their weaknesses in appealing to a conservative electorate. State Senator Lee Zeldin carried the burden of votes in Albany that could be interpreted as raising taxes. George Demos, a former SEC lawyer, was heavily supported by his wife's in-laws who, in normal times, are liberal California Democrats.

In truth, there were scant philosophical differences between the two conservative Republicans. Newsday columnist Lane Filler wrote, "Both oppose abortion, think taxes are too high, support gun rights, hate Common Core, favor a strong national defense, are against 'amnesty' for immigrants here illegally...I have not turned up any meaningful difference between them on policy."

But that didn't prevent the US Jobs Council from spending more than $200,000 on attack ads that portrayed Demos, who had been endorsed by Rudy Giuliani and George Pataki, as a creature of "Nancy Pelosi's people." A typical ad charged that Demos "is trying to use the Pelosi cash machine to buy a seat in Congress."

Even though Demos donated $2 million to his own campaign, it was not enough to hold off the onslaught of Super PAC attacks. In the end, Zeldin defeated Demos in the primary by a 62-to-38 percent margin.

Politico reporter Ken Vogel in his praiseworthy new book, Big Money, likens Super PAC donors to meddlesome "sports junkies who plunk down hundreds of millions of dollars to buy a professional team." Often the motivation of these mega-givers is the arrogant belief that because they are rich, they know more about politics than the pros. With it comes the certainty that they can pick winners and losers in primaries just like they do with stocks on Wall Street.

And that is why the heavy Super PAC influence in these two little-covered New York House primaries may represent the wave of the future in party politics.

Editor's Note: This blog post is part of The Primaries Project series, where veteran political journalists Jill Lawrence and Walter Shapiro, along with scholars in Governance Studies and the Campaign Finance Institute, examine the congressional primaries and ask what they reveal about the future of each political party and the future of American politics.

A great deal of attention has been paid to the existence of independent expenditure groups and to the billionaires who fund them. The Koch brothers and Sheldon Adelson, right wing billionaires in politics, and Tom Steyer, the newest left wing billionaire in politics, seem to have had nearly as much ink spilled on them as have the candidates and causes they endorse.  And no wonder. Americans are fascinated and worried about the question Darrell West poses in the second chapter of his new book Billionaires, “Can rich dudes buy an election?”

Tracking the sources and amounts of money in post Citizens United elections is a full time and complex job. Our hats go off to the Campaign Finance Institute who has recently completed the most extensive study ever of the role of independent expenditures in primary elections. Michael Malbin, Founding Director of the Center and author of the upcoming report on this year’s primaries, shows us just how big these groups, often funded by billionaires, have gotten.  In research focusing on independent spending in the 2014 congressional primaries, Malbin points out that in the 15 House races with the most independent expenditure money ($500,000 +) these expenditures counted for 76% as much as the candidates own campaign money. In Senate races, the independent expenditures accounted for 44% as much as the candidates own money.  Even the candidates themselves are worried about this trend since it often seems that outside groups can swamp a candidate’s own message.

Malbin also shows us why it is so hard to figure out what’s going on in an individual election. Only 49 of the 281 organizations that were around in the 2012 cycle spending money on behalf of congressional primary candidates were also around in 2014. That means that there were 232 new and different groups playing in 2014, posing challenges for the journalists and academics trying to track them.

The Campaign Finance Institute, however, has data on all these organizations from 2012 and 2014.  They have categorized them by ideology and, as the following chart shows, there are some interesting developments. For instance, while conservative independent expenditure groups remain the biggest spenders in the 2014 congressional primaries, their overall proportion of independent expenditures is down from 2012.  That year, conservative groups spent $40.5 million, nearly three quarters of total independent expenditures, compared to $9.3 million or 17 percent of total expenditures for Democrats.  In 2014, conservative groups upped their spending to $56.8 million, but their overall share of independent expenditures fell to 68% as liberal groups doubled their spending and increased their percentage of the total to 23%.

Even more surprising is the change in spending patterns within the Republican Party. As the following table shows, this really was the year when the establishment fought back. In 2012 anti-establishment spending by independent expenditure groups in congressional primaries constituted 59% of all such expenditures while spending by independent expenditure groups on behalf of establishment Republicans was only 36% of the total.  In two years, those numbers flipped.  In 2014, with control of the Senate at stake, the establishment mobilized independent expenditure groups which spent 55% of all the money spent by such groups while the anti-establishment groups spent only 37%.

There’s something for everyone in these findings. For the Democrats who have been on the defensive for much of this year but who have gotten through a primary season with few internal divisions, the increase in spending on their behalf and the sense that they will be able to run a good ground game in the key states where it really counts is a plus.

For the Republicans, the heavy spending by establishment groups has paid off in that they haven’t let weak candidates slip into the general election contest. They are probably as strong as they can be going into the fall campaign.

Nonetheless, tracking the money in this new election environment is a complex and full time job. And Darrell West’s question still hangs over us—“Can rich dudes buy an election?”

It is no secret that American elections are getting wildly expensive. If you are unlucky enough to live in a swing state or a state with a competitive race for US House, US Senate or Governor, you know that every even numbered year means frequent phone calls, a barrage of campaign mail, and endless television ads. Candidates want your vote, and sometimes it seems their strategy is to annoy the average voter into turning out to the polls.

However, beyond direct candidate appeals, outside groups are now spending heavily on competitive races of all types. Many statewide campaigns now cost tens of millions of dollars, and interest groups, PACs, and other organizations are ponying up with substantial sums to try to reach voters and do one of two things. They either try to convince you one candidate deserves your vote or dissuade you from voting for the other candidate.

How much money is flowing into races beyond what candidates themselves spend? The answer is staggering. Below we profile the 20 most expensive Senate races since 2010 in terms of independent expenditures. The chart shows not only how expensive races are, but the extent to which outside groups seek to influence electoral outcomes.  

This chart shows that races are getting more expensive. Among these races, only two (Colorado and Pennsylvania) are from 2010. Half (10) of the races are being waged this cycle, and even though data are updated through Sunday, the totals are certain to rise. Those ten races alone have totaled over $435 million in spending in those states.

The totals provide a small picture into the magnitude of money in American politics. The totals exclude direct candidate spending and spending by other, outside groups not subject to as rigorous FEC disclosure requirements.

As campaigns continue to become more expensive and outside groups see participation in elections as a path toward influencing outcomes of both races and policy, there is one political certainty: over the next two to four years, many of the campaigns on this list will be displaced by future, more expensive campaigns for the Senate.

Totaling more than $111,000,000.00, the 2014 North Carolina Senate contest between Kay Hagan and Thom Tillis is the most expensive Senate election in the nation’s history (not adjusted for inflation). As we investigated earlier this week, outside money has been flowing into American politics in the wake of the Supreme Court’s Citizens United decision in 2010.

When candidate and independent spending are combined, 2014 ranks among the most expensive, if not the most expensive, in history. However, understanding campaign spending takes more than a simple examination of total dollars. Spending differences across states can occur for a variety of reasons, including geographic size, population size, and the expense of media markets.

As a result, a more useful metric for understanding the magnitude of campaign activity is spending per voter, and 2014 offers an interesting case: Alaska. This year, Alaska saw a highly competitive Senate race in which both outside groups and candidates spend substantial amounts of money. Alaska ranks 47th in population with just over 700,000 residents and an estimated 503,000 eligible voters. After adjusting spending (both candidate and independent expenditures) for each state's estimated voting eligible population, Alaska's 2014 Senate race, unsurprisingly, ranks as the most expensive in US history.

Alaska originally ranked 6^th most expensive in 2014, with about $60 million spent total. But it jumps to first place in dollars spent per voter. Candidates and outside groups spent roughly $120 per voter in Alaska this year, about double the next most-expensive race, Montana 2012, where candidates and outside groups spent $66.5 per voter. By comparison, the $111 million Senate race in North Carolina—with a voting-eligible population of about 6,826,610—equaled only $16.25 per voter. That’s still far above the median spending per race for all three cycles ($7.3 per voter) but certainly serves to put the spending in context.

Relative to 2012 and 2014, in terms of both combined and per-voter spending, 2010 could be considered one of the cheaper cycles for Senate races thus far.

These data lend some support to the observation that, since Citizens (and more recently McCutcheon v. FEC) independent expenditures are quickly outpacing contributions to candidates. But given changes in reporting requirements and limited data, there is still a lot about outside spending we still don’t know.

All in all, candidate and outside group spending totaled just over a billion dollars in Senate races in 2014. The fact that North Carolina alone accounted for more than ten percent of that spending is astonishing, but no less remarkable is the intensity of spending per voter in Alaska. But if spending continues to grow as it has the last three election cycles, both of those records will likely be shattered in 2016.

One of the fundamental arguments in the “Political Realism” debate is whether or not strong political parties could make government work better. One way to assess party strength is to look at how much money parties can raise and spend.

In this vein, political scientists Ray LaRaja and Brian Schaffner have claimed that removing limits on party funding activity would make politics less polarized. I’ve been skeptical of this claim. In fact, in a short analysis, I found that the opposite is more likely the case—that states with limits on party fundraising appear to be less polarized, though I cautioned against inferring too much from this pattern.

LaRaja and Schaffner have now responded and previewed their forthcoming book, Campaign Finance and Political Polarization: When Purists Prevail, which will be out this fall from the University of Michigan Press. So, a response to their response is now in order.

I’ll start by granting a point of agreement: LaRaja and Schaffner note that I didn’t re-produce their analysis. I didn’t do this because, based on what they’ve written, it’s not clear exactly which states they consider to be “Parties Unlimited” and “Parties Limited” states. So, until they make their list public, it will be impossible to conduct a precise replication of their analysis.

The good news is they’ve promised to make their data public in the future. As they write in their recent post, “we will be posting all the data necessary to replicate (and challenge) our results upon publication of our book this fall, and we look forward to seeing what others find when they dig into the data.” They also note in their analysis that “11 states changed their laws on party limits during the period of our study (1993-2012).” Assembling this list, they note, was “possibly the most painstaking work we did on this book.” For now, their list of changes remains a well-kept secret, though the changes appear to be driving their analysis. So it will be good when all the relevant data and categorization choices are clear and on the table.

A lot depends on which states fall into which categories. But, there is a more fundamental question: does it make sense to dichotomize states into “Parties Unlimited” and “Parties Limited” states? States with limits vary considerably. Some states limit the money into parties, but allow unlimited flows to candidates; some states allow unlimited money into parties, but limit money from parties to candidates. Some limits are high, some are low. Some have exceptions for party-building activities. Rules vary between primary and general elections, as well.

Consider California. There are limits on how much parties can raise from individuals, but those limits are quite high (they are now at $35,200), and also only cover the party accounts that go to state candidates (so, for example, ballot measures are exempt or general party activities are exempted). California also has no limits on how much parties can transfer to candidates. So should California be a “limits” or “no limits” state? California also has the most polarized legislature, as measured by the distance between party medians. Depending on how you choose to classify states, you can get very different results, especially when you are only working with 20 states (LaRaja and Schaffner limit their claims to the 20 states with the most professionalized legislatures, as per the Squire Index).

LaRaja and Schaffner’s response presents a time series regression model to “calculate the predicted level of polarization over time in a state that limited party fundraising … and spending to on where those limits were removed.” But if states that removed limits became less polarized following the removal of those limits, why not tell us what those states were, and report the actual polarization trends in the states? Put another way: Why rely on model predictions when there are real world data? Grounding this debate in the trajectories of actual states would lend some realism to the claims. Then we could debate examples.

For example, as Thomas Mann and E.J. Dionne note in a recent Brookings paper, two of the states with no limits are Texas and North Carolina. As Mann and Dionne write, “The behavior of their legislatures in recent years cannot, on any plausible definition, be described as 'moderate.'” However, neither Texas nor North Carolina shows up as excessively polarized when polarization is merely a measure of voting patterns. Moreover, if parties are so pragmatic, why did the North Carolina Republican Party (which could raise and spend unlimited sums of money) fail to stop a takeover by multi-millionaire right-wing extremist Art Pope?

This takes us to questions of how party leaders actually behave. LaRaja and Shaffner show evidence in their response that parties give more money to moderate incumbents than to extreme incumbents. This should not be surprising. Presumably, moderate incumbents are more likely to be in competitive races, since moderates are more likely to represent competitive districts.

The more relevant question is what types of candidates parties recruit. Thankfully, we have answers to this courtesy of excellent work by David Broockman, Nicholas Carnes, Melody Crowder-Meyer, and Christopher Skovron, who surveyed 6,000 county-level political party leaders. They found that, “party leaders…use their influence to discourage moderates from seeking office: they strongly prefer candidates at least as ideologically polarized as their median party member. Republican party leaders show this preference especially.”

Their findings also reinforce something that should be apparent to students of polarization—that polarization is asymmetric. Republicans have moved far to the right. Democrats have mostly stayed in place. Let me quote Broockman et al.’s paper at further length, because the findings are extremely relevant to this debate:

“Republicans are much more likely to, unprompted, mention ideology as an important factor for candidates. Our evidence suggests that not only do Republicans care more about ideology, it is also readily accessible when they think of candidate recruitment. It seems likely, then, that Republicans are much more active in recruiting ideologically polarized candidates than Democrats are.”

“Democratic chairs are most inclined to support candidates who are middle-of-the-road or slightly left with respect to the party, while Republicans prefer candidates who espouse an ideology matching or more conservative than their party. In fact, while Democratic chairs are less likely to support very liberal candidates than those nearer to their party average, Republican chairs seem to give very conservative primary candidates the same boost that Democrats give to moderates.”

This does suggest that perhaps giving parties more money and therefore more control over candidates would produce moderation in blue states, but exacerbate polarization in red states. Unfortunately, there is nothing in LaRaja and Schaffner’s analysis that addresses this possibility.

The importance of recruitment also suggests that what we really want to know is who controls the actual recruitment mechanisms in the first place. It’s possible that states with limits might have strong party recruitment mechanisms. If what we really care about is the strength of party machines, why not try to measure that more directly?

LaRaja and Schaffner seem to envision parties being run by hard-headed pragmatists who can determine outcomes with money alone. They seem to assume that if parties can get billionaires to fund them, this will enable party leaders to support more moderate candidates. They seem to ignore that the billionaires may have a few ideas of their own about how they think government should be run (see, e.g. North Carolina).

This gets to a final point, about whether we ought to care if parties rely on small or large donors. LaRaja and Schaffner dismiss the case for small donors, noting that: “the endless romanticizing of small donors as being emblematic of American voters has no empirical grounding.” They go on to note that the ideological distribution of small donors and the ideological distribution of large donors “are nearly identical,” and therefore, “[p]utting more emphasis on ideological small donors may even make our politics worse as politicians streamline their messages to cater to this minority of individuals with more extreme views.”

Let’s grant that large and small donors have the same ideological distribution. If there is no difference, then there’s no reason to think that relying more on small donors would make politics any more extreme. However, since there are many more small donors than there are large donors, a small-donor matching system would allow less extreme candidates the ability to seek out less extreme donors from a larger population of potential donors. We know large donors are polarized, so relying more heavily on them doesn’t give parties much room to moderate. Of course, this presumes that large donors want to shape party positions. But that seems a safe bet.

There are also good (small-d) democratic reasons to support small-donor programs: they bring more participants into the political process; they orient politicians to think differently about whom they represent, and they probably make politics an attractive profession for a broader set of potential candidates. I’d even trade off some polarization for a small donor system. Fortunately, based on their data, it doesn’t appear that I’d even have to.

Finally, and perhaps most importantly, polarization is a function of many, many things, and it’s hard to imagine how changing limits on what parties can raise and spend would have much of an influence given the many other factors. Consider this thoughtful systems map developed by the Hewlett Foundation to analyze American politics as a system: it describes multiple factors that might influence levels of polarization. Systems thinking warns us to be careful of putting too much focus on a single point of leverage without thinking about the larger systems dynamics. This is why many reform skeptics are cautious about unintended consequences—thinking about a single variable in the absence of a larger context usually has unexpected results.

Moreover, as Mann and Dionne explain, we need to be cautious of applying lessons from the states to Washington:

"The gridlock in Washington is a consequence of the ideological polarization of the parties buttressed by vast party networks, their strategic opposition to one another throughout the legislative process fueled by the intense competition for control of the White House and Congress, the prevalence of divided party government, and the asymmetry between the parties that leads Republicans to eschew negotiation and compromise."

"The situation in the states is dramatically different. Most now have unified party governments, and gridlock is the exception, not the rule. There is little evidence of moderation in the Republican- controlled states, whatever their campaign finance laws."

I’m sure we will continue this debate for many months to come, especially after the publication of Campaign Finance and Political Polarization: When Purists Prevail this fall. I’m glad that LaRaja and Schaffner are bringing valuable data to this important question. It’s certainly far from settled.

Editor’s Note: This post was originally published by the Institute of Governmental Studies. Thomas Mann is also Resident Scholar at IGS.

Donald Trump and the Amen chorus of Republican presidential aspirants may have appeared to monopolize the capacity to make fantastical claims about what’s wrong with America and how to fix it. But a rival has appeared on the scene, outlining a very different fantasy plan to run for president on the Democratic side of the aisle.

Harvard law professor Lawrence Lessig looks meek—a dead ringer for Mr. Peepers—yet is anything but. Lessig built an impressive career in legal scholarship on the regulation of cyberspace, and the mild-mannered, soft-spoken academic became a cult hero among libertarians fearful of increasing legal restrictions on copyright, trademark and the electromagnetic spectrum. But Lessig’s transformation into a political activist was spurred by his personal revelation that money in politics is the root of all our governing problems. Eliminate the dependence of elected officials on private donors and the formidable obstacles to constructive policymaking will crumble. Simple but searing truth, or a caricature of a complex governing system shaped by institutions, ideas/ideologies, and interests?

Lessig became a whirlwind of energy and organization to promote his new values and beliefs, leading efforts to “Change Congress,” convene a second constitutional convention, raise awareness of corruption in politics through the “New Hampshire Rebellion,” and start the “Mayday PAC,” a super PAC designed to end all super PACs. He wrote the bestselling book Republic, Lost: How Money Corrupts Congress—and A Plan to Stop It, delivered a series of popular TED talks, and tirelessly traveled the country with his PowerPoint.

With none of these enterprises yet bearing fruit, Lessig has decided to raise the stakes. He has announced that if he receives $1 million from small donors by September, he will seek the Democratic presidential nomination, running as a “referendum candidate.” His single-issue platform, built around the concept of “Citizen Equality,” consists of “true” campaign finance reform supplemented by electoral reform (to weaken the influence of gerrymandering) and voting rights. His goal is to use the election to build a mandate for political reform that will cure our democratic ills. Lessig will apparently have nothing to say about anything other than political reform, insisting that his issue should be and can be the number one priority of voters in the 2016 elections. If nominated and elected, President Lessig will serve in office only long enough to enact the Citizen Equality Act and then resign, turning over the powers and responsibilities of the office to the vice president. Recently he generously informed the Vice President that he would happily enable a third Joe Biden term by selecting him as his running mate.

The hubris of the Harvard Professor is breathtaking. In virtually every respect, his strategy is absurd. Lessig’s political reform agenda is stymied by Republicans, not Democrats. Why not direct his energies where the opposition resides? All of the current Democratic presidential candidates support the thrust of these reforms. But saying that this is their highest priority is likely to harm, not boost, their candidacies. Why would even the most ardent supporter of the three pillars of Lessig’s reform agenda cast a ballot solely on this basis? Big and important issues divide the two parties today and the stakes of public action or inaction are huge. We don’t have the luxury of using the election to try to build a mandate for a set of political reforms that would have no chance of passing in the face of GOP opposition and would be of only incremental utility if they did.

Campaign finance does play a corrosive role in our democracy and I have invested much of my career grappling with it. There is no doubt that money in elections facilitates the transfer of economic inequality into political inequality, and the spectacle of several hundred plutocrats dominating the finance of our elections should be a target of serious reform efforts in the courts and the Congress. At the same time it is foolish to imagine that campaign finance is the only route for private wealth to influence public policy or that its reform will dramatically transform the policy process. Money did not prevent the major legislative enactments of 2009-2010—including the stimulus, student loans, the Affordable Care Act, and financial services reform. Nor is it likely to be the critical factor on climate change, immigration, infrastructure or jobs and wages; which party wins the White House and whether control with Congress is unified or divided is key. If anything, the Lessig campaign is likely to weaken the forces for political reform by demonstrating just how small the relative priority for this action is.

Trump offers the country his outsider status, success in building his personal wealth, an outsized personality, a brashness in asserting how easily he can solve the country’s problems, and a hearty appetite for and skill in stoking the anger and fears of a segment of the country. He feeds the notion that a strong, fearless, wily leader, inexperienced and mostly uninformed in politics and governing, can be the man on a white horse saving a great country losing its exceptional status. His claim that all politicians are bought by private interests—a claim Lessig eagerly embraces—fits well with his grandiose claims that he alone can fix what ails the country. A significant segment of Republican voters, presumably not well versed in the American constitutional system are attracted to him, at least enough for him to be a factor in this election campaign.

Lessig is a far less commanding presence but his ambition burns no less than that of Trump. The notoriety, celebrity, and adoring audiences are heady stuff, even if on a much smaller scale. Lessig told Bloomberg that Trump’s candidacy is evidence that his reform message is taking hold. Lessig said, Trump “strikes people as credible when he says all these people (politicians) are bought—I used to buy them …Trump is saying the truth.” Lessig will be a minor figure in this election and the causes for which he fights are unlikely to advance from it. Both Lessig and Trump, despite their differences in visibility and importance in the election, will have contributed to the dumbing down of American politics, a reality that will bring tears to the eyes of civics teachers and political science professors across the country.

Hillary Clinton’s release of her campaign finance proposals on Tuesday confirms there will be no significant substantive differences on political reform among the aspirants for the Democratic presidential nomination but a huge gulf between the two parties, whoever the nominees.

Harvard law professor and activist Larry Lessig announced his candidacy for the Democratic nomination this past weekend based on the single issue of political reform, but his quixotic and gimmicky campaign is akin to carrying coals to Newcastle. His only difference with the other Democratic candidates is his insistence that political reform (primarily on campaign finance) should be of the highest priority and other concerns (immigration, wages, climate change, economic inequality, infrastructure, national security) should play second fiddle. Lessig apparently believes that Republican and independent voters will rally to his call and create a broad base of public support for bipartisan cooperation on changing the rules of the electoral game.

If only it were that simple. The gaping differences between the parties on campaign reform are both ideological and strategic. Republicans are more philosophically disposed to elevate free speech over political equality. They also realize that as presently constituted, their party is advantaged by fewer or no restrictions on money in politics, lower turnout among minorities and youth, and single-member districts. Democrats instinctively reject the argument that money is speech and are comfortable with using public authority to set and enforce the rules of democracy. But they also know that they would benefit from restrictions on big money in elections, guaranteed voting rights for all citizens, and a more proportional translation of votes into seats.

The Clinton campaign finance proposals generally follow the thrust of liberal reformers: building a counterforce to big money through multiple matching funds for small donors, increasing transparency by requiring timely disclosure of mega-contributions and transfers that now evade public scrutiny, and overturning Citizens United, which set the stage for a Wild West of outsized contributions and spending. Her support for a constitutional amendment to accomplish the latter is a pipedream and probably wouldn’t work if it were adopted. As she acknowledges, appointing Supreme Court justices to change the current 5-4 majority is the more promising route to the desired change.

Lessig’s dream notwithstanding, this particular agenda will be achieved only if and when Democrats manage to control both ends of Pennsylvania long enough to put the policies and a sympathetic Supreme Court in place. It’s an important choice for voters to consider in the 2016 elections but by no means the only or most pressing one.

The rise of SuperPACs, the decision in Citizens United, and intensified polarization in Congress has ignited a flame under the already robust academic debate over the role of money in elections. Last week, Lee Drutman wrote an article for Vox outlining the recent contribution of Raymond J. La Raja and Brian Schaffner made to the debate with their book, Campaign Finance and Political Polarization: When Purists Prevail.

The crux of the book argues that allowing political parties to control more money, not less, is the key to reducing polarization. This runs counter to many pro-reform writings, focused chiefly on empowering small donors in order to counter big-money politics. La Raja and Schaffner counter this narrative, suggesting parties channel money to create moderation, rather than small donors, which are polarizing.

Drutman pushes back on both accounts by taking issue with some of the underlying assumptions in When Purists Prevail, including the weight they place on median voter theory and the extent parties will spend money on moderate candidates in primary elections. He marshals a host of recent research to support the critique, including: a recent Brookings paper on the strength of political parties, data on the power of outside money in congressional elections, and research showing moderate districts do not necessarily produce moderate candidates.

Click here to read the full article on Vox.

Event Information

As the sixth anniversary of Citizens United v. FEC approaches on January 21, both experts and ordinary citizens believe the United States is confronting a campaign finance crisis. Citizens United and related court cases have unleashed a flood of dark money that many believe could drown our democracy. It is estimated that over $5 billion will be spent on the 2016 presidential race—more than 3 times the amount spent in 2008 (already the most expensive election cycle in history). A comprehensive poll conducted by the New York Times and CBS News in the spring of 2015 showed that 84 percent of adults—including 90 percent of Democrats and 80 percent of Republicans—believe that money has too much influence in American political campaigns. Even the richest Americans agreed: 85 percent of adults making $100,000 or more share that same belief.

There has been much handwringing about this state of affairs. But there has been too little public attention paid to finding solutions. On the sixth anniversary of Citizens United, the Governance Studies program at Brookings hosted current and former government officials, lobbyists, donors, advocates, and other experts to discuss how to resolve the campaign finance crisis. They focused on innovative reform efforts at the federal, state, and local levels which offer the hope of addressing the problem of big money in politics.

Panelists will included:

Cheri Beasley, Associate Justice, North Carolina Supreme Court
Daniel Berger, Partner, Berger & Montague, P.C.
John Bonifaz, Co-Founder and President, Free Speech for People
Norman L. Eisen, U.S. Ambassador to the Czech Republic (2011-2014); Special Assistant and Special Counsel to the President (2009-2011); Visiting Fellow, The Brookings Institution
Bruce Freed, Founder and President, Center for Political Accountability
Steve Israel, Member, U.S. House of Representatives (D-NY)
Roger Katz, Chair, Government Oversight Committee, Maine State Senate (R)
Allen Loughry, Justice, Supreme Court of Appeals of West Virginia
Chuck Merin, Executive Vice President, Prime Policy Group; Lobbyist
Connie Morella, Ambassador to OECD (2003-2007); Member, U.S. House of Representatives (R-Md., 1987-2003)
Jeffrey Peck, Principal, Peck Madigan Jones; Lobbyist
Nick Penniman, Executive Director, Issue One
Trevor Potter, Commissioner, Federal Election Commission (1991-1995; Chairman,1994)
John Pudner, Executive Director, Take Back Our Republic
Ann Ravel, Commissioner, Federal Election Commission (Chairwoman, 2015)
Timothy Roemer, Ambassador to India (2009-2011); Member, U.S. House of Representatives (D-Ind., 1991-2003); member 9/11 Commission; Senior Strategic Advisor to Issue One
John Sarbanes, Member, U.S. House of Representatives (D-Md.)
Claudine Schneider, Member, U.S. House of Representatives (R-R.I.,1981-1991)
Peter Schweizer, President, Government Accountability Institute
Zephyr Teachout, CEO, Mayday PAC
Lucas Welch, Executive Director, The Pluribus Project
Fred Wertheimer, Founder and President, Democracy 21
Tim Wirth, Member, U.S. Senate (D-Colo.,1987-1993); Member, U.S. House of Representatives (D-Colo.,1975-1987)
Dan Wolf, Chair, Committee on Steering and Policy, Massachusetts State Senate (D)

Click here for a full agenda.

Video

• The campaign finance crisis in America and how to fix it - Part 1
• The campaign finance crisis in America and how to fix it - Part 2
• The campaign finance crisis in America and how to fix it - Part 3
• The campaign finance crisis in America and how to fix it - Part 4

Audio

• The campaign finance crisis in America and how to fix it: A solutions summit (Part 1)
• The campaign finance crisis in America and how to fix it: A solutions summit (Part 2)
• The campaign finance crisis in America and how to fix it: A solutions summit (Part 3)
• The campaign finance crisis in America and how to fix it: A solutions summit (Part 4)

Transcript

• Uncorrected Transcript (.pdf)

Event Materials

• Solution Summits Agenda120
• 20160121_campaign_finance_summit_transcript

We have received many emails and calls in response to our blog last week about our campaign finance reform “Solutions Summit," so we thought we would share some pictures and quotes from the event. Also, Issue One’s Nick Penniman and I just co-authored an op-ed highlighting the themes of the event, which you can find here.

Ann Ravel, Commissioner of the Federal Election Commission and the outgoing Chairwoman kicked us off as our luncheon speaker. She noted that, “campaign finance issues [will] only be addressed when there is a scandal. The truth is, that campaign finance today is a scandal.”

(L-R, Ann Ravel, Trevor Potter, Peter Schweizer, Timothy Roemer)

Commenting on Ann’s remarks from a conservative perspective, Peter Schweizer, the President of the Government Accountability Institute, noted that, “increasingly today the problem is more one of extortion, that the challenge not so much from businesses that are trying to influence politicians, although that certainly happens, but that businesses feel and are targeted by politicians in the search for cash.” That’s Trevor Potter, who introduced Ann, to Peter’s left.

Kicking off the first panel, a deep dive into the elements of the campaign finance crisis, was Tim Roemer, former Ambassador to India (2009-2011), Member of the U.S. House of Representatives, (D-IN, 1991-2003) Member of the 9/11 Commission and Senior Strategic Advisor to Issue One. He explained that “This is not a red state problem. It’s not a blue state problem. Across the heartland, across America, the Left, the Right, the Democrats, the Republicans, Independents, we all need to work together to fix this.”

(L-R, Fred Wertheimer, John Bonifaz, Dan Wolf, Roger Katz, Allen Loughry, Cheri Beasley, Norman Eisen)

Our second panel addressed solutions at the federal and state level.  Here, Fred Wertheimer, the founder and President of Democracy 21 is saying that, “We are going to have major scandals again and we are going to have opportunities for major reforms. With this corrupt campaign finance system it is only a matter of time before the scandals really break out. The American people are clearly ready for a change. The largest national reform movement in decades now exists and it’s growing rapidly.”

Our third and final panel explained why the time for reform is now. John Sarbanes, Member of the U.S. House of Representatives (D-MD) argued that fixes are in political reach. He explains, “If we can build on the way people feel about [what] they’re passionate on and lead them that way to this need for reform, then we’re going to build the kind of broad, deep coalition that will achieve success ultimately.”

(L-R in each photo, John Sarbanes, Claudine Schneider, Zephyr Teachout)

Reinforcing John’s remarks, Claudine Schneider, Member of the U.S. House of Representatives (R-RI, 1981-1991) pointed out that “we need to keep pounding the media with letters to the editor, with editorial press conferences, with broad spectrum of media strategies where we can get the attention of the masses. Because once the masses rise up, I believe that’s when were really going to get the change, from the bottom up and the top down.”

Grace Abiera contributed to this post.

Campaign finance is a key issue for the quality of democracy. As we noted in a recently-published book of which we are co-authors, and which we had the honor to present in the Hall of Former Presidents of the Legislative Assembly last February 11 (El costo de la Democracia: Ensayos sobre el financiamiento político en América Latina, UNAM, Mexico City, 2015), it is important because of an inescapable fact: While democracy has no price, it does have an operating cost. The use of economic resources is an essential element for democratic competition. More than a pathology of democracy, political financing, when well-regulated, is a normal part of democratic life.

Yet it is undeniable that money is capable of introducing distortions in the democratic process. Its unequal distribution impacts, first, on the real possibilities enjoyed by the parties and the candidates to take their message to the voters. Second, having money gives individuals and social groups a differentiated possibility of participating in elections and exercizing their influence over the candidates through their contributions. This is vital for democracy. When political power is simply a reflection of economic power, the principle of “one person, one vote” loses meaning. Third, fundraising efforts offer obvious opportunities for the articulation of exchanges between donors and those who make decisions on public affairs, or at least for the continual appearance of conflicts of interest. This can be very problematic in the case of Latin America, where there is a risk of money from organized crime penetrating the campaigns.

And so it is not surprising that the issue is on the political agenda in many countries of the region, just as it has been for a long time in Costa Rica. Costa Rica introduced public financing for political parties in 1956, making it the second country in the world to do so, after Uruguay. Nonetheless, the generosity of the government contribution did not avoid a long succession of scandals associated with the issue, a history that includes figures ranging from Robert Vesco and Manuel Antonio Noriega to Carlos Hank González and the illegal donations from the government of Taiwan. 

The wounds left by each of these episodes gave way to worthy yet incomplete regulatory efforts. Most important has been the reform of the Electoral Code approved in 2009, which among many necessary changes prohibited corporate contributions to the political parties. And not only legislative action has made a difference. The Constitutional Chamber of the Supreme Court has also made a difference by lifting bank secrecy on financing, a very important decision that has been pointed to internationally.

Each of these steps has been moving the country in the right direction. This is worth underscoring: At a time when it is so easy to revile the Costa Rican political system, it should be recognized that in terms of political financing the country is, in general, better situated than it was 20 or 30 years ago. All the evidence we have indicates that private contributions today are less important in our campaigns than one generation ago. We can state with great certainty that our parties are financing more than 80% of the cost of their campaigns with the state contribution. That is good news.

However, the current regulatory framework presents problems such as:

a) It continues to be a regulatory system that is somehow upside down: It meticulously keeps tabs on the use of the state contribution by the parties, which does not give rise to conflicts of interest, while it is much less effective when it comes to verifying the truth of the information the parties provide about their private sources of financing, which do have the potential to compromise the autonomy of the political system. Correcting this imbalance, getting the Supreme Electoral Tribunal to prioritize monitoring private financing and to devote more resources to it, would not only be a way to straighten out its priorities, but frankly, all the parties would also breathe a sigh of relief.

b) The system of advances on the state contribution continues to be very limited (only 15% of the subsidy is disbursed before the presidential election and nothing in the case of municipal elections). It is time to admit that eliminating the system whereby the contributions were distributed in advance payments, which existed from 1971 to 1991 (when 50% was disbursed in advances), caused grave prejudice to the political system. The weakness of the advanced disbursement has ended up leaving the parties at the mercy of banks and lenders during the campaigns. Worse still, today the possibility of a party receiving loans during the campaign against its electoral expectations depends entirely on the fickle behavior of the opinion polls. This is unfair and risky, as the OAS electoral observation missions have noted.

c) The legal framework does little to limit parties’ spending on advertising, one of the most effective ways to reduce outlays during campaigns and to bring about fairness in electoral competition, which is one of the most important objectives in improving the current system. One must evaluate the advisability of adopting a system of advertising slots (provided free of charge by those holding concessions for the radio spectrum or purchased by the Supreme Electoral Tribunal and then made available to the parties) as has been done, with a positive outcome, by other democracies in the region such as Argentina, Brazil, Chile, Ecuador, and Mexico.

d) The current regulatory framework has serious vulnerabilities at the local level. Requiring the parties to file a single financial report with the contribution they receive nationwide (the same system that exists for the presidential election) is insufficient when in practice there are 81 local elections in which each candidate raises and spends money autonomously. Let’s be clear: Relatively little is known about who finances the campaigns at the local level in Costa Rica. This would not matter much except that the experience of other countries – from Mexico to Colombia – shows that local campaigns are the preferred point of entry for organized crime to penetrate the electoral structures. Reinforcing the financial controls on municipal elections is one of the country’s most urgent tasks in relation to campaign finance.

Costa Rica has made major strides in regulating political financing. Yet there is an urgent need to address the weaknesses in the current regulatory framework. There are bills in the legislative pipeline, such as No. 18,739, introduced by the Supreme Electoral Tribunal in April 2013, that incorporate almost all the reforms suggested here and that provide an excellent basis for moving this inevitable discussion forward. 

We will have to address the problems in the current regulatory framework sooner or later. The question is whether we will do so before or after the next scandal. Let’s hope that, for once, we act on time.

This piece was originally published by International IDEA. 

Super PACs and other lightly regulated political organizations are dumping hundreds of millions of dollars into American elections. What should be done about it? Unlike many candidates for federal or state office, so-called independent expenditure groups face no restrictions on how much individuals and groups can give to them. And thanks to several federal court decisions, including Citizens United v. Federal Election Commission, independent groups can spend unlimited amounts to influence elections. The public understandably worries about the political clout of wealthy groups—especially since donors often can hide their identities.

Reformers have proposed various remedies: disclosure rules, the appointment of a liberal Supreme Court justice to reverse Citizens United, even a constitutional amendment to overturn that decision. Those long-shot strategies, however, are unlikely to create the kind of small-donor democracy that many reformers seek. Money, like water, will inevitably flow into the political system. Laws can’t do much to reduce the amount of money in politics; what they can change is where the money goes.

An easier path to improving politics

In our new Brookings paper, The State of State Parties, we suggest an easier path to improving politics—one that is right under our nose. Strengthening state political parties can help offset the clout of super PACs.

Our study, based on a survey of 56 state-party organizations plus detailed interviews with 15 of their leaders, points to the distinctive and constructive role that state parties play in American politics. In an era when politics seems to be spinning out of control, party organizations are among the few actors that seek to integrate and balance interests—for instance, by recruiting candidates with broad appeal, by playing honest broker among contending partisan factions, and by building coherent strategies among campaigns up and down the ticket. Party organizations also generate a lot of grassroots activity to mobilize volunteers and voters.

How regulations on parties increase super PAC spending

State parties are among the most heavily regulated entities in American politics, a situation that diminishes their influence relative to non-party groups. For instance, the vast majority of state parties face restrictions on the source and size of donations, and some contribution limits are unrealistically low. In Massachusetts, no donor can give more than annual aggregate of $5,000 to all local and state parties. That’s a paltry sum in statewide elections that can easily cost $55 million, including $20 million in independent expenditures.

Super PACs and other groups naturally fill the vacuum because they do not have to contend with limits on raising and spending money. Often, outside groups effectively drown out the parties. In our survey, only half the parties said they advertise on TV and radio sometimes or often, usually because they lack the resources to do more.

The figure below shows that parties’ independent spending is miniscule compared to the growing expenditures of non-party groups over the past five election cycles. In the 2014 election cycle, the parties accounted for just six percent of total independent spending in the states for which we had good data.

An especially significant finding is that restraints on political parties seem to amplify the activities and influence of outside groups. As illustrated in the table below, 65 percent of respondents in states with contribution limits to parties said that independent groups sponsor more than half or almost all political ads, compared to only 23 percent in states without contribution limits. 

In other words, independent spending is significantly lower when parties are not limited. These differences translate into electoral clout. In states with contribution limits, 65 percent of respondents said independent spending is often a key factor in gubernatorial elections, while fewer than half said the same in states with no limits.

Correlation does not prove causality, but our findings provide strong circumstantial evidence that when you restrict the parties, you get more independent expenditures by non-party groups.

It’s not hard to strengthen state parties

We recommend changes to strengthen state parties and restore them to a place of prominence in campaigns. First, state governments should raise or eliminate contribution limits so the parties can acquire sufficient resources to compete with outside actors. This would allow state parties to serve as clearinghouses for campaign money, which would bring more “dark money” toward accountability and transparency.

Second, parties should be allowed full freedom to coordinate their activities with their candidates and allied groups. This would make them more valuable to candidates and would allow the parties to perform their irreplaceable role of supporting candidates across the party ticket.

We also suggest giving parties favorable tax treatment so that donors are more likely to give to parties than candidate-sponsored super PACs or interest groups. We also recommend other regulatory changes that would encourage parties to do more grassroots work with voters.

Loosening the constraints on state parties would not stop the flow of money into politics (nothing can do that), but would channel more of the money to accountable actors. That’s why we think of this solution as building canals, not dams. And the incremental steps we propose require no sea-changes in public opinion or heroic legislation. In fact, they command support in both parties’ establishments, making them a good starting point for reform. That’s why we conclude that strengthening state parties is a realistic path toward a better balanced, more effective, and more accountable political system.