Politics and Economics Don’t Always Mix

David Crane
Lecturer and Research Scholar at Stanford University and President of Govern for California

University of California at Berkeley economist Emmanuel Saez knows something about economics but apparently not about politics.

In a recent debate with former US Treasury Secretary Larry Summers, Saez (who is also an advisor to presidential candidate Elizabeth Warren and proponent of a wealth tax) claimed there’s a correlation between wealth and political power. As the Financial Times described it, ”Saez said that wealth create[s] power, which skew[s] politics.”

But Saez’s own state and campus illustrate a very different correlation.

This year California’s legislature and governor are awarding $10 billion in compensation and benefits to 57,000 state prison employees, or $175,000 per employee. That’s 2.5x more than the $4 billion the legislature and governor are awarding to the University of California system, which amounts to just $16,000 per UC Berkeley employee.

Prison employees aren’t wealthy but they are among the most powerful political actors in California. That’s because they focus on donating to legislators and governors who make budget decisions. See for yourself at Cal-Access, which reports political donations. The most recent report lists 219 donations totaling $855,000. It’s not a huge amount of money but it helps to generate a huge return ($10 billion). It’s also about $855,000 more than UC faculty members donated. Because they don’t donate, UC gets less and students pay more.

For all the talk about money in politics few take the time to understand about how money in politics actually works. Political power is correlated less with wealth than with focus. A difference in focus is why prison guards received five salary increases over the last nine years while UC’s share of state spending declined. 

California isn’t unique in this regard. Just visit opensecrets.org to view donations to your favorite members of Congress. You’ll be surprised by how small are the donations from special interests that, like California’s prison guard union, know that a little goes a long way — especially when others evacuate the playing field.

Don’t blame prison employees. They’re operating no differently than corporations and others who seek to influence legislation for their benefit. Blame yourself if you’re not protecting legislators who are willing to legislate in the general interest.

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