• Let's Have More Political Skulduggery

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    The Washington Post headline read "A Brave New World of Political Skulduggery," referring to the YouTube "attack video" on Hillary Clinton. The video appeared around March 19 and was reported widely on March 20.

    Let’s have more of it, I say. Let’s have money and ads flying around wildly from now until election day. Let’s show that the campaign finance laws restrict free speech just when it is needed — when elections are held. Let’s show that the campaign finance laws do nothing but help incumbents stay in office.

    I am not unaware that such freedom of speech will stimulate Congress to pass even more restrictions on speech. I can well imagine that at this moment some legislative aide on Capitol Hill is pondering how to revise the law to prevent such videos from appearing. Congress began the war against speech. It won’t stop now. Let these Congressional assaults on speech be recognized for what they are. Let hundreds and thousands of videos appear, right up to election day. Let Congress be pushed into abandoning its campaign restrictions (very doubtful) or strengthening them (likely), so that the true governmental antagonism to speech can be seen for what it is.

    Congressmen will, with straight faces, argue that we must be protected against unfair and derogatory speech. Compliant editorial writers will chime in with their support. The human being as voter will be made out to be a sorry and mindless creature. He has the franchise. He runs the country. He is the true boss. He is what democracy is made for. He is the person for which so much blood is being shed in Iraq. And yet he can’t be counted on to think straight. He cannot hear too many ads, or ads of the wrong kind. He cannot be allowed to spend his money on candidates as he sees fit. The democratic process, it would appear, is a fragile flower constantly in need of care and watering. It must be protected from any ill-winds. It must be sheltered by the wisdom of Congressional laws that secure it. Liberty is its enemy, strangely. Liberty must be curtailed to protect that liberty that democracy supposedly stands for. Into what manner of falsity must our minds be directed when once we aim to deceive!

    We can only wonder how Americans between 1620 and 1974 survived without having a Federal Election Commission to stifle competition among office-seekers. How did our forefathers manage to make up their minds among the cacophony of voices and attacks? How did they manage to cast rational votes among the free flow of money? Were they better men than we? Were they more sound of mind? Ah, but we are moderns. We know better how to manage our affairs than they did. We are perfecting democracy. We are uncovering its little infirmities and remedying them. Are we not the wisest and best of all generations? Are we not the best and the brightest?

    Will Americans not be swept hither and thither by the free flow of videos? Will not their puny little minds be swept into confusion? Must we not dam up the flow of thought and information stemming from rank amateurs and outsiders? These partisans of politics must be stopped! They have no right to spread their poisons freely over the wires of communication. They have no right to poison the minds of viewers. The First Amendment does not mean that any kind of speech is permissible. Speech must be fair. We have laws already that control communications. It is only fitting that they be extended to encompass elections. The Supreme Court has said that this is fitting, and the Supreme Court has the last word. Speech, shall we say, must be politically correct. No, we’d better not say that just yet. That is what we believe. That is what many say and promulgate. That is the great weight hanging over our heads. That is what we are heading toward. But, we’d better not openly say that just yet. Let the baby get used to the hot water by degrees.

    What has been the immediate effect of this video on the standings of the candidates? We can use the Intrade odds-makers who are betting on Democratic nominations to estimate the impact. A sure thing is 100. Mrs. Clinton’s prices are as follows:

    • March 19: 45.1
    • March 20: 46.1
    • March 21: 45.5
    • March 22: 45.9
    • March 23: 46.6

    The immediate impact, if any, was somewhat positive for her; and after a few days her odds have risen by a small amount. The longer-term context of her fortunes is that she stood at 51.3 on February 24, from which she dropped to a double bottom of 44 on March 9 and 13. Between March 14 and 19, she stayed practically constant at 45.

    Starting in fall of last year, Mr. Obama’s odds skyrocketed to the 22 area, where his price stagnated between January and March 2. At that date, he commenced a rise to 30 by March 7 whereupon his odds again plateaued. His recent readings are

    • March 19: 30.0
    • March 20: 30.0
    • March 21: 29.5
    • March 22: 29.4
    • March 23: 31.5

    Both Clinton and Obama have gained ground against candidate Edwards, who has fallen from 10 to 7.5 over the last 5 days. On March 22, a report appeared on the internet stating that Edwards was suspending his campaign because of his wife’s cancer. The source was "an Edwards friend." One hour later Edwards held a press conference and stated he would remain in the race. The prediction market did not believe him. The Edwards price declined that day and the next from 9.0 to 7.5.

    If the video had any impact at all, it has been slight. If anything its first effect was to boost Clinton and drop Obama. If the Clinton camp responded in a mature fashion to the attack, used it to gain sympathy and paint the ad as unfair, and used it to attack the attackers, then the rise in her price is comprehensible. On the other hand, if Obama was placed on the defensive, if his response was initially shaky, and if the link between the ad’s creator and Obama meant anything, then the small drop in his price is understandable. However, none of these effects, for Clinton or Obama, has been large. The rumor of the termination of the Edwards campaign has actually been bigger news.

    Does any of this suggest that the electorate needs protection against speech? Not at all. This is the first of such ads to appear. One might expect it to have a disproportional effect, but it has not. The market, reflecting voter reaction, did not wildly swing one way and another when one man spoke through his video. Millions heard and saw the video, but opinion did not wildly swing. This is not how the human mind processes information of this type.

    A gainer from the episode has been the ad’s creator. Although he has left his current job, the publicity will help his career.

    My title, of course, is tongue-in-cheek. Skulduggery is bad, consisting of devious tricks. My title reflects my preference that speech be unhampered. Was this ad really skulduggery? I haven’t seen it, and I don’t know. This is not for me to judge. Certainly the actual market reaction suggests that voters and market-players were not deceived by anything in the video. If the ad has seriously tarnished the reputation of Mrs. Clinton, she can bring a lawsuit for defamation of character or libel.

    The issues raised by the ad are what interest me. They relate to the restrictions on political campaigns contained in the Bipartisan Campaign Reform Act of 2002, also known as the McCain-Feingold Bill. This law continues a decades long series of restrictions on campaign financing, starting with the creation by Congress of the Federal Election Commission in 1974. The entire apparatus should be abolished.

    The creator of the Clinton video ad said: "There are thousands of other people who could have made this ad, and I guarantee more ads like it — by people of all political persuasions — will follow. This shows the future of American politics rests in the hands of ordinary citizens."

    Does the future of American politics rest in the hands of ordinary citizens? Maybe more than it used to, because the cost of expressing one’s views has decreased. The opportunity set of potential views to listen to has broadened considerably, and we can select from them at lower cost.

    Each of us is a mini-factory that produces an output — our opinions — from inputs. Our time and attention are limited, and we all are learning how to produce better opinions for ourselves using the changed technology and the lower cost inputs now available, which include internet videos and columns like this one.

    Congressmen want us to maintain favorable opinions of them. They will attempt to control the technology as they have controlled other forms of communication. I hope they fail and fail miserably. Free speech, reflecting free thought and a free mind, is the first and last bulwark of individual freedom.

    Michael S. Rozeff [send him mail] is a retired Professor of Finance living in East Amherst, New York.

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