Does Money Talk or Scream Politics?

Running for office in this country, particularly for national office or for almost any elected position in expensive states, especially those with the biggest cities and largest populations, is hideously expensive. You can watch influence-buyers target Senate seats (two per state) in sparsely populated rural venues, because it is so much less expensive. But there are no shortcuts in presidential races.  

“*  The cost of campaigning to be elected president has steadily risen over the last 100 years, but particularly so between 2000 and 2012, when spending by the candidates more than quadrupled.

*  In the 2016 campaign, eventual winner Republican Donald Trump and runner-up Democratic nominee Hilary Clinton spent a combined $1.16 billion; including all other candidates, a total of $2.4 billion was spent.

“Even when adjusted for inflation, the amount of money it takes to become president has increased more than 250-fold from Abraham Lincoln to Barack Obama. Even more striking, the trajectory of the graph steepens as the years progress, suggesting not only campaign spending itself but the growth rate in campaign spending is accelerating rapidly…

“At the time, many estimates for the presidential election in 2016 said it would cost at least $3 billion; some even put the number as high as $10 billion. At $2.4 billion, it fell a bit short of that but was still a staggering amount. Among the two nominees, Hillary Clinton's campaign spent a total of $768 million, vastly more than the $398 million Donald Trump's campaign spent, according to the Center for Responsive Politics. That $1.16 billion total is actually lower than the 2012 election's $1.97 billion total, the first decline in decades – though it doesn't take into account the value of "earned media" (that is, free media) coverage that the candidates (especially Trump) benefited from. Federal Election Commission filings show that Trump personally contributed a total of $66 million toward his campaign, while Clinton contributed $1.4 million of her own money.” Investopdia.com, May 13^th. 

Trump’s 2020 target for his direct campaign spend: one billion dollars. Add to that at least double for Political Action Committees… a rapidly growing number since the 2010 Supreme Court decision in Citizens United vs Federal Election Commission uncapped the amount such indirect contributions could raise and spend. But most of that money stinks… strings attached everywhere, even if not openly stated. Can candidates exist without corporate, PAC and other organizational money?

 “The mayor of South Bend, Ind. [Pete Buttigieg], the senators from California [Kamala Harris] and Minnesota [Amy Klobuchar], and the ex-vice president [Joe Biden] are among the Democratic presidential candidates disavowing corporate cash, lobbyist checks, or the super PAC system. They’re trying to outdo each other with promises to finance their campaigns with grassroots contributions. But while they play down the role of money and influence, longtime Wall Street donors who have both say little has changed. ‘I’ve talked to about half of them, and I have not run into a single one who said, ‘Hey, you worked at Goldman Sachs, I can’t take your money,’ ’ says Heyman, who helped elect Barack Obama by collecting checks from friends, and later became his ambassador to Canada. ‘I’ve not heard that—ever.’” Bloomberg.com, May 21^st.

How about big money from the rich associated with those corporate big boyz or billionaires with an agenda? “Wall Street has long been a deep well from which presidential candidates draw hundreds of millions of dollars for advertising, travel, and staff. As the presidential race gears up, almost the entire Democratic field is hitting up the industry’s donors, according to money manager Marc Lasry, who says he’s already met with about 10 Democrats. ‘At the end of the day, candidates need money,’ says Lasry, who was a bundler for Hillary Clinton in 2016, runs Avenue Capital Group, and co-owns the Milwaukee Bucks.

“There is one notable difference. ‘In the past, there was no candidate who didn’t come to New York, Chicago, L.A. for money,’ says Lasry. ‘Today, there are two candidates who aren’t doing that—Elizabeth Warren and Bernie Sanders.’ Few bankers would want to promote those senators anyhow. This month, Vermont’s Sanders proposed capping credit card interest rates, calling banks ‘modern-day loan sharks.’ Warren, from Massachusetts, has pitched a tax on family assets above $50 million to wipe out student debt. She wants to jail executives whose companies’ negligence causes harm, citing bank bosses and the financial crisis…

“Near the end of April, Buttigieg said he was returning $30,250 from lobbyists. Two days later, Biden said he was rejecting support from super PACs to increase his appeal to middle-class voters. Super PACs blossomed after the Supreme Court’s 2010 Citizens United decision, and they now raise unlimited amounts from companies and people. New York’s Kirsten Gillibrand, who was a corporate lawyer before becoming a senator, and her New Jersey colleague Cory Booker, a Wall Street favorite for years, have both said they won’t take money from corporate PACs. But Buttigieg, Biden, Gillibrand, and Booker are meeting with bankers and investors to talk policy or raise money. Those four campaigns didn't respond to requests for comment. Wall Street fundraisers often ask guests to give a candidate $2,800, the most allowed in the primaries…

“Robert Wolf, who ran UBS Group AG’s Americas unit, says he’s already donated to nine Democratic presidential candidates and plans to meet with about 15. ‘You have to, more than ever, be involved,’ says Wolf, who started the strategy and investment firm 32 Advisors.

“Besides Buttigieg, Myers has had John Hickenlooper, the ex-governor of Colorado, and Jay Inslee, Washington’s governor, drop by his office for what he calls policy lunches. He says the idea isn’t to get them to go easy on Wall Street. What he really wants is to resist what he sees as the party’s socialist tilt while fighting Trump. ‘I don’t feel embarrassed at all,’ says Myers, who was vice chairman of Evercore Inc. before he started Signum Global Advisors, which does policy research for finance firms. ‘Running for president and winning a general election is incredibly expensive, and the other side will raise enormous amounts of money.’ He’s right so far: Trump’s reelection campaign and joint fundraising committees raised $38.3 million in the first quarter of 2019. Sanders, the Democratic contender with the most cash, raised $18.2 million. Harris raised about $12 million, with only about 37 percent in amounts of $200 or less.” Bloomberg. And that’s just about getting elected.  One elected… the money need really starts to explode.

Republicans have deferred infrastructure repair and enhancement, shifted the cost of college to the students and their families, are trying to get the federal social programs cut to the bone (from Social Security and Medicare to the Affordable Care Act) and passed all those cuts in the form of lower taxes and deregulation on to the richest in the land. Effectively, America is living on the investments from past generations but investing very little for our future. I’ve noticed that Republican candidates are no longer touting “job creation” from trickledown money from the now-even-richer Americans… just saying “we cut taxes” as if that were enough. Trickledown didn’t trickle down. And Trump has increased the peacetime deficit by more than any other president.

On the other hand, the Dems are increasingly embracing bigger government with spending programs to match… perhaps a bit more than the economy is able to support. “The competition among 2020 Democratic presidential hopefuls to be bold in confronting vexing social and economic challenges has created a mountain of policy promises. The rising price tag has implications the contenders prefer to sidestep.

“Candidates’ breezy assurances that everything from four years of college to first-class medical care to cash payments for the middle class can be had for free — unless you are one of those very wealthy Americans targeted to foot the bill — have concerned even liberal economists.

“‘These big, ambitious proposals are so expensive, it is not possible to pay for them by just taxing the rich,’ said Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center. ‘They are going to require taxing middle-income people…. But talking about that just doesn’t fly politically.’” Los Angeles Times, May 21^st.  For a nation that is clearly slip-sliding in power, influence, global stature and even relative economic size, everything seems to be about money. Money we don’t have, money rather dramatically targeted to buy political power and influence (the bedrock of any corrupt society) and money that has increasingly shifted to the highest rungs of our economic ladder… like never before.

              I’m Peter Dekom, and since this financial structure is probably unsustainable, exactly what happen when we really do hit a wall… and there is nowhere else to go?