With all the focus on the Presidential and Congressional elections, the enormous amounts of money spent on state-level races and ballot questions has gone largely unnoticed. Coverage by the mainstream corporate media is minimal, in part due to cuts in budgets for reporting that increase corporate profits. But that’s a whole other topic.

According to the National Institute of Money in State Politics (NIMSP), a small Montana nonprofit that has the most detailed nationwide records, spending in state and local races is likely to exceed $3 billion this year. [1] This may not seem like a huge sum when spread across many elections in 50 states, but a relatively small amount of money can have a big impact on state races and ballot questions. For example, the cost of a campaign for the most expensive state legislative seat in the country, a Virginia Senate seat, is “only” $500,000. And $1 million or so can fund a successful campaign for a state Supreme Court seat. [2] Campaign spending that can swing the outcome of a state election represents a modest investment for a corporation or individual with a significant financial interest at stake. [3]

The portion of campaign money contributed to state and local races by individuals is typically less than half of the total and stands at 38% for the 2016 elections. The rest is donated by political groups, corporations, unions, and other organizations. [4] The amount of money coming from out-of-state sources and dark money entities is growing. The portion of spending in state elections for which voters know the true identity of the original donor has declined from three-fourths in 2006 to only one-fourth today. [5]

The most disturbing aspect of state campaign spending is the growing spending on judicial elections by those with vested interests in court decisions. (See this previous post for more details.) These inherent conflicts of interest threaten the integrity of our judicial system. In addition, growing spending on judicial races by the political parties is politicizing our state courts and undermining their impartiality.

More than $26 million was raised for judicial races in the 27 states that had judicial elections this fall. In Texas, where over $2 million was raised, the major donors are law firms who have a clear vested interest in judicial decisions. Louisiana, Ohio, and Wisconsin also had judicial races that attracted over $2 million. [6] In addition to trial lawyers, corporate-funded groups (such as energy, medical, insurance, manufacturing, and real estate interests) and unions have been big donors to judicial races. Education funding and charter school issues have emerged as important judicial issues in Washington State and Louisiana. Therefore, those with a financial stake in those decisions have emerged as large campaign donors for Supreme Court races in those states.

Many of the donors to judicial races are frequent litigants in state courts. This raises serious concerns about conflicts of interest and the possibility that judges will need to (or should) recuse themselves from significant numbers of cases. However, because of weak disclosure laws and the presence of dark money (where the true donors are hidden from the public), in many cases the presence of a conflict of interest may not be publicly known.

Furthermore, the advertising for or against judges, which is how most of the campaign money is spent, tends to focus on criminal cases, even though the real interests of those paying for the ads are in the arena of civil and commercial cases. A common strategy is to attack a judge as “soft on crime” or to highlight a high-visibility, emotional case and criticize the judge’s handling of it without discussing any of its complexities or legal issues. Not only does this affect voting in elections, but there is evidence that it affects judges’ decisions in criminal cases. [7] (See this previous post for more details.)

Donations from political party-affiliated groups politicize judicial elections, which are most often, technically, non-partisan. The Republican State Leadership Committee has been particularly active, spending over $4 million on this year’s state judicial races. Politically-affiliated donations create the perception – if not the reality – that judicial decisions are made on political grounds, rather than impartially based on the law. [8]

Allowing individuals and groups with financial or partisan interests to donate large amounts to judges’ election campaigns undermines the credibility of our court system. These donations compromise judicial impartiality, fairness, and independence, which are essential in a democracy.

There are two solutions to the problems raised by large campaign donations to judicial races:

  1. Appoint judges using a good, non-partisan process with reasonably long or lifetime terms (with a mandatory retirement provision); or
  2. Establish citizen funding and effective regulation of judges’ elections including:
    • Partial public financing through matching of individuals’ small donations in exchange for limits on spending and the size of contributions;
    • Tight regulation and full disclosure of outside, truly independent spending; and
    • Strong conflict of interest and recusal standards for judges.

(See this previous post for more details.)

A fair and impartial justice system is essential in a democracy. Judges need to serve the public interest and not be beholden to wealthy special interests. Therefore, judges should be appointed by a transparent, non-partisan process. If judges are elected, it is critical to have a well-structured and regulated campaign finance system that prevents special interests from having undue influence.

[1]      Quist, P., 10/17/16, “$1 Billion…and Counting,” National Institute of Money in State Politics (

[2]      Johnson, G., 11/1/16, “A look at notable state supreme court races in 2016,” The Washington Post

[3]      Chisun, L., Valde, K., Brickner, B.T., & Keith, D., 6/26/16, “Secret spending in the states,” Brennan Center for Justice (

[4]      Light, J., 10/13/16, “The $1 billion election no one is noticing,” Moyers and Company (

[5]      Chisun, L., et al., 6/26/16, see above

[6]      Light, J., 10/13/16, see above

[7]      Brennan Center for Justice, 10/18/16, “New analysis: Outside spending surges in important state judicial races as Election Day nears,” New York University School of Law (

[8]      Brennan Center for Justice, 10/18/16, see above



The US needs to stop hemorrhaging jobs to other countries. For starters, we need to do three things:

  • Impose financial disincentives for offshoring jobs,
  • Change the mindset among corporate executives that offshoring jobs is the right and acceptable thing to do, and
  • Reverse the resignation among workers and the public who believe that the offshoring of jobs is inevitable.

To create financial disincentives, we should pass laws that place special taxes or restrictions on corporations that have offshored say 100 or more jobs in the last five years. Possible examples include:

  • Bar such corporations from receiving federal contracts. Or there could be demerits subtracted from the scores of proposals from such corporations in competitive bidding situations. Or there could be financial penalties on existing federal contracts such as the deduction of $10,000 per offshored job or of 1% of a contract’s annual payment per 1,000 offshored jobs, whichever is greater.
  • A corporation’s taxes could be increased by $10,000 per offshored job or its tax rate could be increased by 1% per 1,000 offshored jobs, whichever is greater – with no offsets to allow a corporation to avoid this tax.
  • Bar such corporations from receiving government tax breaks, loans, or grants.
  • Require such corporations to pay a special, unavoidable, and substantial tax on aggregate executive compensation that is over $1 million. [1]

Senator Bernie Sanders has announced that he will introduce a bill in Congress that will include provisions similar to these to discourage the offshoring of jobs. He is calling it the Outsourcing Prevention Act. [2]

To counter the mindset that favors offshoring jobs, we should pass laws or establish executive branch procedures that publicize a corporation’s offshoring of jobs. Possible examples include:

  • Require such a corporation to hold a public hearing in the community losing the jobs 90 days before the termination of the jobs. If the number of jobs is 500 or more, a hearing in Washington before a congressional committee should be required.
  • Establish a new anti-offshoring czar in the Office of the President who would visit any such corporation’s CEO to make it clear that offshoring jobs is viewed negatively.

Providing financial rewards to corporations to keep jobs in the US is not an efficient way to stop offshoring. Typically, state or local governments provide tax abatements or other tax benefits to corporations to keep jobs. However, state and local taxes are generally only 2% or so of a corporations’ costs. Labor costs are a far greater portion of operating costs. Therefore, tax abatements are not likely to offset the savings in labor costs provided by offshoring. For example, in the recent United Technologies / Carrier (UT/C) case in Indiana, the state will provide $7 million in tax benefits over 10 years. However, UT/C estimated was that it would save $65 million per year ($650 million over 10 years) for offshoring 2,100 jobs. [3]

Corporations’ demands for financial benefits from state and local governments to keep or create jobs are really just blackmail. To stop this job-based blackmail, which robs states or municipalities of needed tax revenue, the federal government should put a 100% tax on these financial benefits, so there is no overall financial incentive for the corporation. The federal government should also reduce grants to state and local governments that give financial incentives to corporations to keep jobs. For example, awards under the Community Development Block Grant or other economic development programs could be cut for states or municipalities that agree to pay job blackmail to corporations. The federal government has used a similar strategy in other instances to get states to change policies. For example, the federal Transportation Department used cuts in federal transportation grants to get states to raise their alcohol drinking ages to 21. This reduced car accidents and saved thousands of lives. [4]

I encourage you to contact your US Representative and Senators and ask them what they plan to do to reduce the offshoring of US jobs. Request that they support a systematic approach to discouraging offshoring such as that offered by Senator Sanders’ Outsourcing Prevention Act.

[1]       Greenhouse, S., 12/8/16, “Beyond Carrier: Can Congress end the green light for outsourcing?” The American Prospect (

[2]       Sanders, B., 11/26/16, “Sanders statement on Carrier and outsourcing,” Press release from Senator Bernie Sanders (

[3]       Leroy, G., 12/7/16, “Can Trump’s wild one-off at Carrier combat corporate welfare?” The American Prospect (

[4]       Leroy, G., 12/7/16, see above


President-elect Trump received a lot of good publicity for his claim that he saved 1,100 jobs at a United Technologies / Carrier (UT/C) plant in Indiana. Although the focus of his claim and effort – to keep good, middle income jobs in the US – is laudable, the facts of this case and the implications for the larger, systemic policy issue are not very favorable.

In fact, only about 730 jobs that were slated to move to Mexico were kept in the US. The other 350 research and development jobs at the facility were never slated to move to Mexico. Meanwhile, another UT/C plant in Indiana will close and roughly 700 jobs will be lost. [1]

UT/C responded to the President-elects’ strong-arming because it has $56 billion in federal contracts it didn’t want to jeopardize and it received $7 million in taxpayer-funded subsidies from the state of Indiana, where Trump’s vice president, Mike Pence, is Governor. [2]

We do need to change the mindset and incentives that make it not only acceptable but a preferred and successful business strategy to ship American jobs overseas. We need to do this through systemic changes in policies. However, what Trump is doing isn’t policy-making and it doesn’t change the underlying market incentives. Furthermore, it’s a drop in the bucket in terms of jobs. [3]

Many economists have been very critical of Trump’s actions because they undermine the rules, predictability, and consistency on which companies and our economy rely. These economists, including former Treasury Secretary Lawrence Summers, argue that the resultant uncertainty could lead to reduced investment, fewer jobs, and slower economic growth. [4]

Trump’s ad hoc, company-by-company approach reflects the arbitrary and capricious use of the personal power of the President’s bully pulpit. While it can affect individual company’s actions – through effects on stock prices, public opinion, federal government contracts, etc. – it is driven by random, autocratic whims. The result is a bullying style of ad hoc capitalism that reflects a personal agenda and a person who wants corporate America to be beholden and deferential to him. [5]

The likely result is that corporations and their senior executives will work to curry favor with Trump by contributing to his re-election campaign and taking other actions that will please him. This is pay-to-play crony capitalism and plutocracy; it is not how a democracy is supposed to work.

My next post will present some systemic, policy-based approaches that we should be taking to counter incentives for offshoring American jobs.

[1]       Nichols, J., 12/8/16, “Chuck Jones is a better president than Donald Trump will ever be,” Common Dreams (

[2]       Greenhouse, S., 12/8/16, “Beyond Carrier: Can Congress end the green light for outsourcing?” The American Prospect (

[3]       Reich, R., 12/7/16, “The Art of the Autocrat,” Common Dreams (

[4]       Greenhouse, S., 12/8/16, see above

[5]       Reich, R., 12/7/16, see above