And why even billionaires can be bought.
Yesterday’s post was about rent-seekers such as hospitals and public employees who receive cash from the California governments they seek to influence. Today’s post is about rent-seekers who receive benefits in other forms.
Unlike hospitals and public employees, public utilities do not receive money directly from governments. Instead, they benefit or suffer from regulations issued by governments. Eg, PG&E’s rates and profit margins are regulated by the CA Public Utilities Commission, which is governed by five commissioners appointed by the governor. Hence, PG&E cares about who the governor appoints to the CPUC. That’s why PG&E has been a persistent donor to Gavin Newsom and other California governors. Tribal governments are another example. They don’t receive money from governments but they benefit or suffer from laws and regulations issued by governments. That’s why they have donated to Gavin Newsom and other California governors.
Another difference between the two types of rent-seekers is in what politicians want from them. No candidate for governor wants a public endorsement by an electric utility such as PG&E but every candidate for governor wants a public endorsement from a public employee association such as the California Teachers’ Association. That’s because voters tend to hate public utilities but to love teachers. Indeed, in some cases endorsements can more valuable to candidates than cash. That’s why rich candidates who can self-fund their campaigns are being less than truthful when they say they can’t be bought. See eg, Illinois Governor JB Pritzker, a billionaire who sought the endorsement of the Illinois Teachers Union, and CA gubernatorial candidate Tom Steyer, a billionaire who sought the endorsement of the California School Employees Association. Cash is not the only valuable currency in politics. This is why associations of public sector employees are the most powerful political players in California. They have cash and cachet.
