Print Edition: February 8, 2012
Have a hard time following conversations about the American primaries? Have no fear. Sean and Nick discuss and debate American politics for the everyman, so even your cat can follow along! Soon you, too, will be able to name-drop in drunken conversations with PoliSci students. Stay smart, stay informed. It might be States politics but it affects us Canadian kids too.
Nick: Neil Diamond once sang that “money talks.” He also sang “gold don’t rust,” but let’s hold that thought for the time being. My point is that the cost of a successful Presidential campaign is higher than ever before, even if you don’t factor in money spent by Super PACs (Political Action Committees, supposedly independent organizations that campaign for a certain candidate without that candidate’s oversight). In Thursday’s Globe and Mail, Konrad Yakabuski reported that campaign spending will likely pass $6 billion (USD) in this year’s election cycle. While that number includes estimates for both Presidential and Congressional campaigns across the entire US-of-A, it’s still an exorbitantly large number. It’s an average of 18 dollars for every man, woman and child living in the States. Although individual donations are capped at $2500, Obama still managed to raise $141 million in 2011 for his re-election bid and spent almost $750 million on his 2008 campaign.
Do you think these sort of campaign spending habits threaten free access to the political process or are they simply “the costs of democracy?”
Sean: The issue of finances and democracy is a tough one. The simple reality is that it takes money to reach an audience large enough to get elected. I like to believe that if you are talented enough, and your ideas resonate with the people around you, you can build a support base and eventually build the finances that it takes to get noticed. The reality, however, is that no candidate in the Republican primaries has a net worth less than a million dollars. It takes money to get noticed. Money is what drives this beast forward. What concerns me is where the candidates get money from. Like you said, Nick, the Super-PAC allows candidates to essentially receive an unlimited amount of money from anyone – including corporations. It is reasonable to wonder where the allegiance will lie: with the people, or with the corporations and major donors. Currently, Mitt Romney’s largest donors are hedge fund moguls. Romney’s Super-PAC raised over 30 million in 2011 (compared to two million for Gingrich and one million for Paul). As well, 56.6 per cent of Romney’s support came from investment and financial industries, including the CEO of Bain Capitol, Romney’s former company that made money liquidating businesses and laying off hundreds of employees. Another top donor for Romney last year was John Paulson, found of Paulson and Co. Inc., a hedge fund firm that made billions of dollars during the sub-prime mortgage crisis. It is no wonder that people are cynical about the seedy underbelly of the world of politics.
Nick, what are your thoughts on the ability of an inspirational leader to raise massive amounts of funds through small amounts? We saw Obama raise millions in 2008 through donations that were less than $10. We’ve seen it this year with Ron Paul being able to haul in millions for his campaign (as well as his Super-PAC). Does the nature of the Super-PAC essentially negate the power of the people?
Nick: I, too, really want to believe that the best candidates will eventually rise to the top through some combination of dedication and public support. Looking at the pack of Republican hopefuls, I’m beginning to feel a little more cynical; surely they can do better than Gingrich and Romney. As far as the candidates’ official campaigns are concerned, limits on individual contributions help strike a delicate balance between fair access to the political process and freedom of expression through donations to a particular candidate. But when it comes to Super-PACs, these caps don’t exist. The Supreme Court’s 5-4 decision in the 2010 Citizens United case held that the First Amendment prevents the government from placing limits on independent campaign donations, including those from unions and corporations. Justice Kennedy’s majority opinion cited difficulties in distinguishing between freedom of speech in journalism and other media, allowing for unlimited budgets for “electioneering communications.” The Super-PAC was born.
This will be the first Presidential election where Super-PACs will be an important factor and already their impact is being felt in the slough of attack ads clogging the airwaves in states holding their primaries and caucuses.
According to The Washington Post, only 23 per cent of PAC funding actually comes from corporations. It is likely that corporate spending is curbed only because the Federal Election Commission publicly discloses donor’s identities; most corporations aim to avoid showing any political slant. In October 2010, Target donated $150,000 to Minnesota Forward, a conservative Super-PAC. The move led to boycotts from the LGBT community and a high profile snub by Lady Gaga, who had previously agreed to an exclusive deluxe release of her latest album. Of course, this hasn’t prevented a small group of billionaires from exerting a tremendous influence on U.S. politics by way of donating to Super-PACs like Karl Rove’s American Crossroads, which raised 91 per cent of its funds in 2010 from billionaires.
This kind of pull seriously threatens the legitimacy of the political process and makes it ripe for corruption. It doesn’t help that most Super-PACs opt for these vaguely sinister, Orwellian names like Restore Our Future, Leaders for Families, and Endorse Liberty. I mean, who wouldn’t want to endorse liberty? Sean, you raise an important point in asking where the true allegiance of the candidates will lie. Herman Cain’s dubious endorsement of “the people” notwithstanding, do you think a heightened sensitivity to economic disparity will make voters resent candidates who seem to be in the pocket of big corporations and billionaires? Which candidates can be trusted to fight for the little guy amid a sea of ceaselessly flowing cash?
Sean: Ron Paul.
Nick: Care to elaborate?
Sean: I think his record speaks for itself. But for the uninformed, Ron Paul’s campaign finances have come primarily from small individual donations. Most of Dr. Paul’s support are young, college-aged and idealistic (as opposed to the rest of the Republican base: old and cynical). As a result, the Paul campaign has focused on building funds through many donations: 56 per cent of donations to Paul during this campaign were under $200, while 60 per cent of Romney donations were $2500.
On that same note, Ron Paul spends his money like he earns it – in small amounts. When the campaign hit Council Bluffs, Iowa, Rick Perry racked up a $1204 bill at the Hilton. Ron Paul paid $64.38 at a Super 8 Motel. In his disclosure report, as seen on chron.com, Ron Paul’s campaign listed a large amount of purchases from cost-effective places like Walmart, The Dollar Tree, Subway and over 40 outings at McDonalds (Paul’s favourite). His smallest purchase was one dollar at the Salvation Army. Paul is a man that puts his (and his supporter’s) money where his mouth is.
Stay tuned next week, when Sean and Nick tackle more American politics and issues that you don’t understand! (But don’t worry – you will. And so will your cat.)