Georgia Politics, Campaigns, and Elections for July 25, 2014

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Georgia Politics, Campaigns, and Elections for July 25, 2014

The United States Postal Service was established by Congress on July 26, 1775. I mailed them a birthday card on Monday; they’ll probably receive it next week.

On July 25, 1974, the United States Supreme Court ruled in the case of United States v. Nixon that executive privilege did not allow the White House to refuse to turn over audio recordings that had been subpoenaed by a special prosecutor investigating the Watergate scandal.

On July 27, 1974, the United States House of Representatives Judiciary Committee approved the first impeachment article against President Richard M. Nixon.

The first such impeachment recommendation in more than a century, it charge[d] President Nixon with unlawful activities that formed a “course of conduct or plan” to obstruct the investigation of the Watergate break-in and to cover up other unlawful activities.

The vote was 27 to 11, with 6 of the committee’s 17 Republicans joining all 21 Democrats in voting to send the article to the House.

The majority included three conservative Southern Democrats and three conservative Republicans.

This weekend marks the 30th Anniversary of the release of Prince’s Purple Rain. The lyrics of Darling Nikki would lead to Tipper Gore founding the Parents Music Resource Center.

http://youtu.be/81WswKidRN4?list=PLmvFDqqcIokYw1TIPsIW9V9gmG9xNdZup

A bomb exploded at a free concert in Centennial Park in Atlanta on July 27, 1996.

Police were warned of the bombing in advance, but the bomb exploded before the anonymous caller said it would, leading authorities to suspect that the law enforcement officers who descended on the park were indirectly targeted.

Within a few days, Richard Jewell, a security guard at the concert, was charged with the crime. However, evidence against him was dubious at best, and in October he was fully cleared of all responsibility in the bombing.

Former Georgia Governor Zell Miller took the oath of office as United States Senator on July 27, 2000. Miller would go on to win a special election for the remainder of the term in November 2000.

Turn Up the Radio

Here is your recommended daily allowance of bad 1980s hair metal.

Today at 3 PM, I’ll be a guest on Georgia Public Broadcasting for “Political Rewind,” hosted by Bill Nigut. Also joining today will be Democrats Tharon Johnson and former Congressman Buddy Harden. In Metro Atlanta, it’s on 88.5 FM, and across Georgia on the GPB radio network.

Campaigns & Elections

Democrats in the United States Senate rolled out the DISCLOSE Act aimed at SuperPAC donor disclosure.

It’s the third version of DISCLOSE since 2010. Broadly speaking, it would force donor disclosure on the big-money, 501(c)(4) social welfare organizations that are flourishing in post-Citizens United politics. Unlike almost all other players in an election campaign, 501(c)(4)s are not covered by the disclosure laws. Their donors are never publicly named.

A Senate rules committee hearing on DISCLOSE on Wednesday made one thing clear: Republicans despise the bill. Previous versions of DISCLOSE all failed due to united opposition by GOP lawmakers.

Liberals say the anti-corruption benefits of disclosure outweigh the free speech issues. They point out that the Supreme Court has agreed with that proposition, including a passage in the 2010 Citizens United ruling that allowed corporations to explicitly support and oppose candidates.

Conservatives argue that the anti-corruption argument doesn’t apply because the money is raised by outside groups, not candidates. They say that disclosure can lead to reprisals against donors, but it’s acceptable for contributions to candidate campaigns. The Citizens United decision only endorses disclosure rules already in effect, they argue.

Here’s what DISCLOSE would do:

Since the Supreme Court’s 2010 Citizens United decision, outside spending in federal elections has skyrocketed.  Outside groups spent over $1 billion in the 2012 federal elections — the most ever.  Shockingly, 2014 could have a comparable figure, despite the lack of a presidential election.

First, due to loopholes in federal election and tax laws, some politically active groups, primarily social welfare nonprofits, are not required to disclose their donors.  The amount spent by these groups quadrupled from 2008 to 2012 — rising from less than $70 million to over $310 million.  So far in 2014, over $35 million has been spent by nondisclosing groups, which is almost triple the amount of undisclosed spending at this time in the 2012 election cycle.

The DISCLOSE Act would require all groups that engage in more than $10,000 in political spending, including for-profit corporations, labor unions, and social welfare nonprofits, to disclose their donors.

Second, some spenders, like super PACs, must disclose their donors, but that disclosure is effectively meaningless because the entities disclosed are sometimes shell organizations.  For example, suppose donor A contributes to shell corporation B, which then contributes to super PAC C, which then engages in political spending.  Even though super PAC C must disclose all its donors, only shell corporation B will be listed on its reports; in this way, donor A will remain anonymous.

Under the DISCLOSE Act, if an organization transfers over $50,000 to another organization while knowing the money will be used for political spending, the donating organization must disclose its underlying donors to the recipient organization, which in turn must list those donors on its disclosure reports.

Third, some political spending isn’t recorded at all.  If a political ad is run on television or radio, but outside the “electioneering communications window” (30 days before a primary election or 60 days before a general election) and doesn’t expressly call for the election or defeat of a candidate (by using words like “vote for Senator Smith”), no disclosure is required at all.  Consequently, not only are the organization’s underlying donors not disclosed, but the amount spent goes undisclosed as well.

The DISCLOSE Act would expand the electioneering communications window.  For the presidential election, most television or radio ads that mention a candidate run up to 120 days before any election would have to be disclosed.

Democratic candidate for United States Senate Michelle Nunn has endorsed the DISCLOSE Act. From her campaign website:

End Secret, Unlimited Special Interest Spending In Elections

The unlimited, secret spending by unknown special interests in elections drowns out ordinary voters. I would support an amendment to overturn the Supreme Court’s decision that allows a few special interest billionaires to secretly spend millions to sway an election. I would also support measures like the DISCLOSE ACT, which would require any organization that spends during elections to disclose where it gets its funding.

Polling, Turnout, and the Senate race

Many folks are talking about how badly the polling in the Senate Republican Primary was, but InsiderAdvantage says they were accurate:

[O]ur last two polls showed the race between a one point battle and a 5% race. But most importantly, the unofficial tracking polls that we continued to release to our readers and which were discussed only on Fox5 Atlanta, FoxNews, and NewsmaxTV by Matt Towery made it clear that the race was tightening.

On Monday, InsiderAdvantage had this to say:

Unofficial tracking poll results from InsiderAdvantage and OpinionSavvy suggest that the GOP U.S. Senate contest between Jack Kingston and David Perdue may have tightened over the weekend. As the “likely voter” pool shrinks and the turnout looks shallow, our tracking shows the two candidates running close to each other. “This is such a difficult race in that the voter turnout is likely to be so weak that literally anything could happen” said InsiderAdvantage/Fox5 Political Analyst Matt Towery. “Kingston polls better with younger voters and men. If the vote skews slightly older or if the female vote is stronger in the runoff, then Perdue could have a chance to pull off an upset.”

FiveThirtyEight reviewed the election results and concluded that turnout wasn’t the cause of inaccuracy among some publicly-released polls.

It would be easy to give the pollsters a pass and assign the error to low turnout. Overall, turnout was down 25 percent Tuesday from the first primary in May. But that probably wasn’t the cause of the pollsters’ error.

Unlike in many other parts of the South, polling in Georgia’s Republican primaries has a history of being accurate. Polling was accurate in the 2014 Senate primary’s first round, the 2012 presidential primary and the 2010 gubernatorial primary and runoff. So, turnout was modeled well enough in the past.

On Tuesday, the drop-off in turnout was pretty uniform across counties. That is, it’s unlikely that pollsters overestimated turnout in strong Kingston areas and underestimated turnout in Perdue areas. It’s possible that there was an unexpected quirk in who turned out that doesn’t show up in county-by-county comparisons, but a change in turnout that would have caused this polling error should be at least somewhat evident in such an examination.

In fact, had turnout been the same as in May, Perdue still would have won. His margin of victory in this hypothetical, 0.8 percentage points, is slightly less than his actual margin, 1.8 points — so maybe turnout played a small role. But that is not a major difference, and certainly not enough to explain Tuesday night’s pollster error.

Instead, Perdue won where he needed to win.

The Fix, over at the Washington Post, also looked at turnout.

Perdue won largely thanks to heftier vote totals around Atlanta, in the northwestern part of the state. Kingston did the best around Savannah, which is his political base.

Kingston’s margin of victory in the southeastern part of the state was much larger than Perdue’s in the northwest. But there are a lot more votes in the counties surrounding Atlanta than where Kingston did best.

But the really interesting story is turnout. In the primary, nearly 604,000 people cast votes. In the runoff, that dropped to 482,000. And the areas that saw the biggest drops were the areas with the largest populations, unsurprisingly. But that meant areas that backed Perdue.

Instead of Kingston picking up votes from supporters of eliminated candidates, many of those supporters didn’t bother voting in the runoff. There’s a correlation between how many primary votes went to candidates not named Kingston or Perdue in the primary and how much turnout dropped in the runoff.

If Kingston voters decide to stay home in larger numbers in November — as the primary candidate supporters did for the runoff — and if black voters vote more heavily Democratic in the places where Perdue did well, that’s a troublesome combination.

 

 

Electric Car Subsidy

Congratulations, Georgia, you’re subsidizing highly-paid Atlanta lawyers purchasing electric cars.

An electric car craze is sweeping Arnall Golden Gregory. So far, nine of the firm’s lawyers have parked their gas-guzzlers and gone electric.
The eco-benefits are nice, they say, but what’s fueled the switch is a $5,000 Georgia tax credit.
Applying to both leases and purchases, the tax credit is for 20 percent of the car’s value, up to $5,000, and can be spread out over five years. The Arnall Golden lawyers are leasing Nissan Leafs, which have a sticker price of $29,860.
The electric car mania started in the firm’s litigation department and has spread by word of mouth.
“Everybody is signing up, now that all the cool kids are doing it,” said Scott Wandstrat, who used to drive an Infiniti. “We all found out through the grapevine what an amazingly good deal the Georgia tax credit is from electric vehicles.”

Lawyer salaries at the law firm are said to start at $130,000 per year.

I would argue you are also subsidizing franchised car dealers by preventing Tesla Motors from selling directly to consumers.

Auto sales accounts for some 20% of sales taxes and auto dealers employ a lot of people so when it came to a battle in the state legislatures the auto dealers trumped the manufacturers. The result was franchise laws that were increasingly biased towards dealers. In essence, exclusive franchises became locked into place, manufactures lost the right to add dealers even with population expansion, quantity forcing became illegal and dealer termination became all but impossible.

The result of dealer rent seeking has been higher auto prices for consumers, about 6% higher according to one (older) study by the FTC. Consumers have been stiffed in other ways as well. In some states, for example, manufacturers were required to reimburse dealers for a repair under warranty whatever amount the dealers would have charged consumers for the same repair not under warranty. As a result, dealers had an incentive to increase their price to consumers because that increased what they would be reimbursed for repairs under warranty. The franchise laws have also resulted in a highly inefficient distribution of dealers as populations have moved but dealers have been frozen into place

The primary argument for Georgia’s regulatory scheme that protects the franchised auto dealer model is to “protect the consumer.” Jeffrey Dorfman, a professor of economics at the University of Georgia discusses the economics of franchised auto dealers.

The car dealers claim that the dealer model is good for consumers because they can compete on price with other dealers on new car sales, trade-ins, and financing terms. However, these claims ring hollow.

Auto dealers are not looking to help consumers; rather, they simply want to capture more profits for themselves. The proof is the money the auto dealers are spending to secure their victories in state legislatures. The only reason to spend money to secure legislation is because that legislation will capture profits that will more than replace the money spent. If consumers end up winning as part of that process, car dealers certainly will not mind, but that is not their aim.

We economists call such behavior rent seeking. Auto dealers are certainly far from the only group engaging in such behavior through the American legislative process. Such behavior is not good, but it is legal. However, the car dealers go too far when they try to cloak their self-serving behavior in a veneer of pro-consumer respectability. Let the NADA fight through state legislatures against Tesla and its billionaire CEO Elon Musk. But the auto dealers should leave consumers out of their argument because in this fight Tesla is the one closer to the side of the consumer.

Yes, Tesla cars are also eligible for the state taxpayer-funded subsidy, but at a legislative hearing earlier this year, the company said that the subsidy is secondary to being able to sell cars in the state. With the Model S starting at just under $70,000, the subsidy is a much smaller percentage of the cost than it is for the Nissan Leaf. Here’s the math on the Nissan Leaf:

Nissan offers a 36-month lease on a $28,800 LEAF S for $199 a month and $2,000 down.

The lessee can claim 20 percent of the $9,164 lease cost — $1,833 — in state income tax credits over five years. The leasing company gets the $7,500 federal tax credit, which it may pass on to the customer as “dealer discounts.”

In reality, that means the Nissan Leaf is free to drivers, but expensive to Georgia taxpayers.

Basically I’ll be driving the car for free after tax rebate for 2 years….

And the cost to Georgia taxpayers?

Georgia spent $943,665 on tax exemptions for 233 residents in 2012, according to the state, the most recent year for which figures were available. Auto makers said last year’s outlays are certain to have grown substantially as volumes jumped. Some Georgia lawmakers, concerned by the rising costs of electric car subsidies, want to phase them out.

So, why not eliminate two market distortions — the ban on direct sales to consumers, and the state tax subsidy — and let the free market take care of it? How will this harm consumers or taxpayers who do not own auto dealerships?

While Tesla cars are currently at the high end of the market, with many stickering in the $100k range, the next Model X SUV is set to begin production soon and will retail in the same neighborhood, the third Tesla Model 3 is set to cost roughly half the price of the Model S. Think BMW 3-series fighter.

Job Openings

Governor Nathan Deal has started accepting applications for appointment to the Harris County Commission seat from which Commissioner Charles Wyatt was suspended.

In May, a grand jury indicted Wyatt for multiple offenses involving bribery and violating his oath of office.

“The allegations involved payments made to and demanded by Commissioner Wyatt in exchange for his vote and influence on contracts approved by the county commission,” reported the Georgia Bureau of Investigation, which conducted the probe.

A vendor made the allegations to other commissioners, who consulted county attorney John Taylor and advised Chief Chattahoochee Judicial Circuit Judge Gil McBride, who requested an investigation in November 2013.

The grand jury issued the indictments May 12, according to the GBI. Wyatt in a phone message in May said he is innocent, and has hired Columbus attorney Tim Flournoy for his defense.

To apply for appointment to the commission seat,

Applicants have until July 30 to submit a statement of interest and resume to:

Office of Governor Nathan Deal
Attention:  Rhonda C. Barnes
201 State Capitol
Atlanta, Georgia 30334
rbarnes@georgia.gov

Deal will interview candidates and select a replacement. Pursuant to O.C.G.A. § 45-5-6(d)(1), there being no general or local law, ordinance or resolution governing the filling of this temporary vacancy, the governor must appoint someone to fill the vacancy.

In Hart County, Probate Judge Bobby Joe Smith resigned ahead of a hearing on suspending him from office.

In a letter sent Wednesday to Gov. Nathan Deal, Probate Judge Bobby Joe Smith made no mention of the hearing or misdemeanor battery charges pending against him that prompted the state’s judicial disciplinary agency last week to seek his emergency suspension from office.
Instead, Smith cited an unspecified medical condition as the reason for his resignation.
In his letter, Smith said his resignation will not take effect until Sept. 30. But he said he intends to take medical leave immediately and that he will remain on leave and not perform any judicial functions until his resignation is effective.
On May 23, agents with the Georgia Bureau of Investigation successfully sought warrants against Smith, charging him with simple battery and criminal attempt to commit sexual battery. Both are misdemeanors, according to the JQC’s suspension motion. The charges stemmed from allegations that Smith had kissed a woman and then attempted to grope her after she sought help from him regarding a “serious” traffic citation in another county, according to the JQC motion.

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