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Ethnicity

African 2.4 East Asian (China, Japan, Korea), 8.5 Other Asian, 8.7 British/Irish, 21.5German/Scandinavian/Dutch 35.4 Other European 18.1Latin American 4.6 Other 2.3

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Religion Catholic 32.8Methodist 9.2Lutheran 6.0 Other Protestant 19.2 Jewish 9.1None 10.4Atheist 1.3 Muslim 1.2Hindu 1.8Eastern Orthodox 1.2Other 1.9

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Politics

Liberal 30.0 Middle-of-the-Road, 28.3 Conservative, 36.3

Apolitical 4.8

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Origin

Foreign 12.8 American non-Indiana, 40.5Indiana city, 10.1Indiana suburb 13.5Indiana town 16.9 Indiana rural 6.7

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Announcements--Tuesday

Breakout--do Paper Case write-up. No class Thanksgiving week

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Announcements--Thursday

Breakout next week-- review Quiz 2 is in progress. It continues

till next Monday

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G302, Week 12: Coalitions and Lobbying

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Park Place Entertainment Corp.

Caesar’s Palace (Las Vegas) The Flamingo Hilton (Las Vegas) Atlantic City New Jersey casinos Mississippi casinos

A 1998 spinoff from Hilton Hotels

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Senator Corzine said to the CEO of Park Place, June 28, 2000 that he

"does not mean to be pushy but he has to know before the meeting with the president if he can count on you for $16,000."

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Two Interesting Dates Aug. 30, 2000

Dismissal of rival's appeal of favorable court decision, following BIA recommendation

Park Place donates $16,000 to the Democratic Party

October 6, 2000     BIA declares tribal court cannot enforce

$1.8 billion judgment against Park Place

Park Place donates $10,000 to the Democratic Party

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What you will learn today

How to form a coalition to help fight your political battle

What lobbyists and campaign contributions are good for

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Coalition Formation Figure out who should be on your side Make sure they know they should be

on your side. Solve the free rider problem and get

them to help.

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The Rent ChainDistributionChannels

Value ChainInputs

Labor

CapitalCommunity

Logistics

Customers

Whole- salers

RetailersSuppliers

Operations

Marketing

Service

Support

Distri-butors

Consumers

Anheuser-Busch is a good example of a company that uses the rent chain

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Policy under analysis: Exemption for job-creating exports Interests Demand Side Supply Side Prediction

Benefits from the Policy__ Ability to Generate Action

Supporting Organizing Political Interests Subs. Magnitude Per Capita Numbers Coverage Resources Costs Action Boeing lower price shareholders sell shares large small large extensive large high little employees few large substantial large little limited low little suppliers other bus. substantial moderate substantial extensive moderate high moderate Communities Boeing few substantial considerable small little small low little suppliers few moderate moderate considerable extensive moderate high little Oil rig,container lower price moderate small few little moderate low little mfgrs Lessors other loans moderate small small little large low little Opposing Organizing Political Interests Subs. Magnitude Per Capita Numbers Coverage Resources Costs Action Taxpayers none large small huge complete huge high little Tax-exempt none substantial substantial large extensive small low large

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Example: Construction Waste

A state proposed allowing builders to bury solid waste on the construction site, with appropriate inspection by the cities.

The lobbyist representing disposal companies had to decide what to do.

First, he contacted environmentalist groups.

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Who would make the best coalition partner to oppose the disposal bill?

(a) Builders(b) Construction unions(c) Non-union construction workers(d) Landscaping companies(e) Local governments

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Example:1977 Clean Air Act Amendments

How should sulfur dioxide emissions be reduced? “Scrubbers” on new power plants? Low-sulfur western coal?

Eastern coal produces ~ 4 lbs sulfur/MBTU

Western coal produces ~1 lb sulfur/MBTU A ceiling on pounds of sulfur/MBTU of coal?

(EPA proposal)

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Western vs. Eastern Coal

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The Strange Coalition Environmentalists were strong in the

West. They supported scrubbers and opposed Western mining.

Eastern coal companies and the United Mineworkers union found allies in the Sierra Club.

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“Logrolling”: You vote for me on this, and I’ll vote for you on that

1. Did the sign-in sheet get around? 2. If you answered a question, bring up anotecard for me.

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What Do Lobbyists Do? Identify threats Track legislation Provide information about the issue Provide information about the issue’s

politics Organise coalitions Influence public opinion

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Lobbying matters most in interest-group and client politics

Concentrated

Dispersed

Concentrated

Interest group politics

Entrepreneurial politics

Dispersed Client politics

Majoritarian politics

Policy Benefits

PolicyCosts

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The Inside and Outside Games The “Inside Game”: contact officials

directly

The “Outside Game”: get other people to contact officials: Grassroots: get your members and friends to

write letters Astroturf: hire a lobbying firm to create real

or simulated grassroots support Grass-tops: get your members who already

have ties to the officials to contact them

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Example: The New Jersey Cable TV Ass.

A $39 million tax on cable TV was proposed. The NJCTA killed it by sending a packet to each member company suggesting:

A 30-second public-service ad from NJCTA Letters to newspapers (with a sample for them) Ask employees to write to legislators Letters to legislators from the general manager Give antitax postcards to subscribers and

employees (150,000 were mailed in, which the NJCTA sorted and delivered to legislators)

An antitax phone message for customers on hold

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Campaign Contributions: Can You Buy a Congressman? “Money buys access, not action”.

Contributions are part of informational lobbying

In client politics, a contribution may make a direct difference

Contributions help elect people with positions you like--but, free rider problem

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Microsoft Political Donations

0

100

200

300

400

500

600

1992 1994 1996 1998

PACIndiv.Soft $

$000

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Soft Money and Hard Money

http://www.opensecrets.org/basics/law/index.asp

Corporations cannot donate directly to candidates

Before 2002, corporations, unions, and individuals could donate unlimited amounts for “party-building”

1999-2000, the national parties raised $495M in soft money, 2/3 from 800 donors of $120,000+

Soft money was banned in 2002

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Soft Money For data on campaign contributions: http://

www.opensecrets.org/lobbyists/index.asp

See my own contributions...

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People who help raise money matter

171,000 people contributed to George W. Bush’s 2000 presidential campaign.

Bush had 150+ “Pioneers”, who each committed to raise at least $100,000-- e.g., $1,000 each from 100 people.

Obviously, he would be grateful to the Pioneers and listen to them in staffing the new administration.

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Top PACs of 2000-2001

•Assn of Trial Lawyers of America $1,370,753•Laborers Union $1,240,500•Machinists/Aerospace Workers Union $1,204,500•American Fedn of St/Cnty/Munic Employees $1,202,000•Intl Brotherhood of Electrical Workers $1,106,150•Teamsters Union $958,821•National Auto Dealers Assn $953,650•National Assn of Realtors $926,595•United Parcel Service $864,406•Service Employees International Union $857,999

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Top Soft Money Donors, 2000-2001 (1,000s of dollars)

Organization Dems Repubs •American Fedn of St/Cnty/Munic Employees 1,466 0 •Service Employees International Union 1,209 20 •International Game Technology 100 1,115 •American Financial Group 0 1,200 •Philip Morris 56 1,134 •Communications Workers of America 1,115 0 •AT&T 485 579 •Freddie Mac 550 500 •Loral Spacecom 1,020 0•Governor Bush Cmte 0 1,000