January 2016

About half of retiring senators and a third of retiring House members register as lobbyists

[Commentary] Members of Congress now make $174,000 a year — not a bad living. But usually they can at least quintuple that salary by switching over to lobbying once they retire. And many of them do just that. A new study by three political scientists has some good data on the trends.

Jeffrey Lazarus, Amy McKay, and Lindsey Herbel went all the way back to 1976 to see who went on to lobby after leaving Congress. Their results are reported in a new article, "Who walks through the revolving door? Examining the lobbying activity of former members of Congress," in the journal Interest Groups & Advocacy. The rate of retiring members going to lobby has grown steadily over time, though it seems to have peaked around 2000. The Senate exhibits more up and downs because fewer senators retire each year, making the percentage trends more sensitive to small fluctuations. The obvious caveat in these measures is that they only represent registered lobbyists. Many former members prefer not to register, but still do work that looks very much like lobbying, with former Sen Tom Daschle (D-SD) being a prominent example. Political scientist Tim LaPira estimates that there's probably twice as much lobbying in Washington as shows up in disclosures.

Why Americans Should Pay Attention to What Facebook Is Doing in India

[Commentary] The first thing to understand is that Free Basics is Facebook, and Facebook is Free Basics, and they're both basically Internet.org. Free Basics is Facebook's effort to help the billion people of the world who don't have access to the Internet take their first baby steps online. Or, cynically, it's Facebook's effort to suck the next billion people of the world who don't have access to the Internet into Facebook.

Open Internet advocates in India went positively up in arms. I'd wager that Facebook CEO Mark Zuckerberg did not expect the backlash to be so decisive. “Who could possibly be against this?” he wrote in an editorial in the Times of India. Well, lots of people, for a number of reasons. First, there is the Western imperialism angle. (Economist news editor Leo Mirani told me Free Basics includes "the sort of things that people in the West think that people in the poor world should have access to.") Most of the backlash, however, was centered not on the gall of a Silicon Valley company galavanting into India with its own prescription for what it sees as a problem, but rather on the implications for the open Internet. Indians know that "some of the Internet" is a poor approximation of the whole Internet. Furthermore, zero rating—making some parts of the Internet free while other parts aren't—chips away at the nature of the open Internet as we know it.

Donald Trump has nothing left to gain from media coverage

[Commentary] A number of pundits, political scientists, and politicians have attributed Donald Trump’s lead in the polls to the media’s incessant coverage of his candidacy. This claim undoubtedly has some truth. Had Trump’s candidacy been covered in only a perfunctory fashion, it seems unlikely that he would have soared so quickly to a lead in national polls and many state polls. But our new research suggests that we should not be too quick in attributing Trump’s success to his ability to dominate the news cycle. Moreover, the media may be more important to several other candidates than to Trump.

What we find is striking: increases in Trump’s media coverage do drive Google searches, but not his poll numbers. And neither do his poll numbers appear to drive media coverage, as we might think it should if the media focuses on traditional horserace metrics. For other candidates, the story is much closer to our traditional expectations for candidate media coverage. This is particularly true for candidates who were not as well-known as Trump going into the race. We suspect that media coverage of Trump has outpaced his levels of support. The media continues covering Trump at very high rates, but there are no more sympathetic voters for him to reach. A bump in media coverage drives more interest for him in general, but does not seem to convert supporters. Contrast this with candidates like Dr Ben Carson, who does gain significantly from bumps in media coverage because he has not yet reached the same level of media saturation.

[Kevin Reuning and Nick Dietrich are PhD students in the Department of Political Science at Penn State University]

VC funding in 2015 was highest since dot-com era despite valuation fears

Venture capitalists spent more money during 2015 on private companies than in any year since the dot-com era, but a slowdown in funding during the final three months of the year suggested that financiers have become a bit queasy about plunking down cash on startups, according to the latest Money Tree Report. The slowdown in funding could be due to worries about so-called technology "unicorns," a term used to refer to technology upstarts whose estimated private valuations have reached $1 billion or more. Some industry watchers fear that these unicorns have become overvalued.

During 2015, venture capitalists spent $27.35 billion on private companies in the Bay Area, according to the Money Tree report released by PricewaterhouseCoopers and the National Venture Capital Association. The venture financing during 2015 was the most that venture capitalists have spent since 2000, when they plunked down $33.42 billion on Bay Area private companies. The 2015 venture financing levels were 7.6 percent above the $25.43 billion investors spent in 2014.