By Mark Rhoads
According to a story on CNN Money, Mitt Romney raised more than $12 million worth of campaign donations in 2011 from Wall Street investment and banking executives, more than any other candidate. President Obama was in second place with just over $5 million, Newt Gingrich was a distant third with $460,000, Ron Paul was fourth with $317,000, and Rick Santorum was fifth and last with $232,000. What are some lessons we can infer from this pattern of Wall Street political donations?
First, it should be no surprise that rich people like one of their own and have still not entirely abandoned their 2008 love affair with Obama so they are hedging their bets by playing both sides of the fence which has been a classic standard operating procedure on Wall Street for many years. But Wall Street avoids long shot bets in favor of what they think is a sure thing so the last three GOP candidates combined did not get as much as $1 million.
Political fundraisers quickly learn there are two kinds of donors. The altruistic donors who only want a candidate that shares their values are usually small donors who give over the web. They are small business managers and small farmers and retired people. The self-interest donors give in much larger sums often through a bundler to make certain that they get personal credit and that their name will later open doors to the schedule staff for a Member of Congress or at The White House or a regulatory agency with jurisdiction over their industry.
When the Rev. Al Sharpton said on MSNBC last week that the Tea Party movement and the Occupy Wall Street movement had some things in common, I scoffed at Sharpton’s wild imagination but on reflection maybe I should not have. There are people in both groups who are correctly suspicious of the damage that super rich people can do to freedom and democracy because of their selfish approach to citizenship. More large Wall Street investors are more interested in exploiting government power to make sure their investment cannot lose money than they are in freedom for all and true marketplace competition.
Apart from the shared distrust of Wall Street’s political manipulation, a major difference is that the Occupy Wall Street groups are close to anarchy in that they have no real agenda that they can articulate.
But the Tea Party agenda of 2009-2010 was easy to articulate. Stop spending us into oblivion and return to the rule of law under our Constitution. In spite of a major gain in one half of one of the three branches of government, the Tea Party caucus has had a very difficult time blocking the Senate and Obama from doubling down on still more deficit spending. Given that the OMB projects another one trillion-dollar deficit this year, the action by Standard and Poor’s in downgrading America’s credit rating last fall now looks entirely reasonable. Not only does America have to borrow more but it also has to pay a higher interest rate on what is borrowed? Who benefits from that? The lenders do when there a lenders who are still willing to take a risk that U.S. bonds will be worth anything in the future which they might not be if the current trend continues. In 1990, the personal share of the national debt for new baby born in America was about $12,500 when Read My Lips Bush 41 was in office. Today under President Obama, every new baby who is born in America has a personal share of $48,905 and the dollar value of our annual budget is more than the total Gross Domestic Product of the country.
The country cannot afford another four years of Obama. But it also cannot afford to elect a new president who is also owned by the one percent that the OWS people rant about. If there are enough small donors who give without expecting a personal gain, return, or appointment, they can collectively raise enough money in altruistic donations to make someone like Santorum competitive in some state primaries even though he is dead last in Wall Street donors. One reason is that people with too much money find ways to waste it. Romney spent more money than he raised from Wall Street just on TV commercials in Florida. He spent more than $3 for every vote he got and even at that price he could not get more than a 46 percent plurality of votes in a competition with three other candidates who only had a small fraction of Romney’s Florida budget to spend. You all know the old joke that money is not everything, but it is ahead of whatever is in second place. For all of his millions, Romney has a talent for opening his mouth and losing millions of dollars in PR and good will on the day after a big win.
Money is not everything. In 1979, Democratic independent Jane Byrne defeated Chicago Mayor Mike Bilandic in the Democratic primary by spending only $100,000 against the Chicago machine. She did such a bad job in office herself that only four years later she could not win re-nomination even with ten million dollars in the bank. It should be obvious by now that Wall Street often bets on the wrong horses in political races and this year could confirm that trend also.
Also published at Illinois Review