Business/Finance

Game over? Billionaire elites now blatantly rule American politics

What drives a man or a woman to spend millions of dollars — even tens of millions — of his or her own money to get a job that would place the words senator, representative, governor, or mayor in front of his or her name? For most of us unwashed heathens, the multiple millions of their own money these financial elites spend on their political campaigns represent seemingly staggering amounts.

But viewed in the rarified context of the very wealthy, the amounts are petty cash.

For example, former eBay chief executive Meg Whitman has put $19 million so far into her campaign for governor of California — but that’s barely 1.5 percent of her $1.3 billion fortune.

Whitman has “publicly floated the notion of a record-shattering $150-million campaign budget” — but even if she financed $100 million of that herself, that still would only be 7.7 percent of her billion-dollar-plus wallet.

She wants to be governor of what used to be one of the 10 largest economies in the world. But she takes a back seat to newly re-elected New York Mayor Michael Bloomberg in spending your own money to be somebody big. No one in American history has spent so much of his own money to win an election.

Bloomberg has now spent $261 million to become and remain the mayor of the Big Apple. That works out to $174 per vote this year, $85 in 2005, and $74 in 2001, according to New York Times reporter Michael Barbaro.

Egads — more than a quarter of a billion dollars. But even that amount of political spending represents only 1.63 percent of Bloomberg’s $16 billion fortune. But he had to overturn New York City’s term limits law to win that third term. Ironically, this year fewer people voted for him — 557,059 — than voted to approve term limits in 1996— 586,890. In an election in which he had been expected to coast easily to his third term because of his extravagant spending and the perceived weakness of his opponent, he won by only 4 percentage points.

Bloomberg had argued that New York City needed his — and only his — expertise in coping with the crisis that enveloped the global economy and hurt the city. Yes, he does have a credible reputation as mayoral manager. But to argue that a law must be changed — a law he supported — to allow him to continue in office as the only suitable mayor during an economic downturn is arrogant.

And Village Voice writer Tom Robbins reported that, based on a book by former NYTer Joyce Purnick, “many months before economic disaster struck in September 2008 — the crisis that Bloomberg said prompted his reversal on term limits — the mayor was already pondering the move.” More arrogance.

Size — as measured by wealth — matters in politics. For example, the total wealth of the 50 richest members of Congress is nearly $1.3 billion, an average of about $25 million each. Sen. John Kerry tops the list at $167 million.

But compared with the personal finances of mega-rich political and corporate elites such as Bloomberg and Whitman, Kerry’s ability to self-finance an election pales. This trend has been apparent for nearly 20 years, particularly in the land of 90210.

California, it seems, breeds really rich people who want to buy a political title. One of Whitman’s opponents — state Insurance Commissioner Steve Poizner — says Whitman’s trying to buy her way into Sacramento. Yet Poizner’s no piker. He “sold a high-technology company for $1 billion in 2000, and plunged $12 million of his fortune into his 2006 election as insurance commissioner.”

Internet entrepreneur, eBay founding member, and venture capitalist Steve Westly spent $35 million of his own $200-million-plus wealth before losing the gubernatorial primary election in 2006. Former Marriott and Northwest Airlines exec Al Checchi burned through $40 million of his $700 million nest egg in his 1998 race, also losing in the primary.

And who can forget Michael Huffington, who spent $28 million of his own money and $100 million overall in losing to Sen. Dianne Feinstein in 1994.

Wealth, combined with time served in office, leads to the late Sen. Ted Kennedy. Liberals would argue he’s been one of the most effective senators in American history (although credible conservatives might disagree). Yet he spent little of his own fortune to stay in office, at least since 1998. Kennedy gave only $1.35 million of his own money to his campaigns, compared with $28 million in individual contributions and $2.6 million in PAC money, according to Federal Election Commission records aggregated by the Center for Responsive Politics. But Kennedy was far from a billionaire. His last Senate disclosure estimated his net worth between $43 million and $163 million.

Money has always spoken loudly in politics. But the tens of millions available to billionaires to spend on their own campaigns is deafening.

Billionaires have always spent plenty of money on politics. Since 1978, one aggregation of data says, 82 billionaires have donated almost $62 million to Republican and Democratic candidates.

Some of these wealthy men (only seven billionaire donors were women) would argue it’s a merely a cost of doing business. Others might argue that campaign contributions to worthy candidates might foster social change (according to their definitions, of course). Still others might admit that they donate large sums simply because they can. The last is called really hefty “political throw-weight.”

But the political largesse of these 82 billionaires is miniscule compared with Bloomberg’s $261 million and Whitman’s $19 million. Her spending has been just since January — and the election is still a year away. Whitman’s spending, since she has no political profile and has rarely voted, has only one goal — name recognition. She can afford to spend $60 million, $80 million, even $100 million to have her name on the tongue of every registered California voter.

I have argued (here and here) for a radical overhaul of campaign financing. I have said that Congress should appropriate sufficient monies to adequately pay for every federal and statewide election in America. If candidates or incumbents took the public money, then they could not take a dime from any other source. (Forget the money-as-free-speech argument. The candidate makes the choice, not the donor.)

But is that argument for massive public financing feasible any more? When a billionaire 16 times over spends $261 million be merely the mayor of a city, how could Congress expect taxpayers to cover that stratospheric cost, let alone statewide and federal races?

The arrogance of Bloomberg and Whitman — I can outspend anyone, and thereby buy the political office I want — fosters another dramatic and saddening change in how America elects its leaders. As Bloomberg and Whitman have discovered, they no longer need to press the flesh and make nice to such commoners as mere multimillionaires to raise the money to run. (There are other consequences, too, as Doc Slammy will explain in his “Democracy & Elitism” series beginning today.)

America has plenty of billionaires. The Forbes 400‘s collective net worth is $1.27 trillion. Many are shrewd, capable, intelligent people. Others were merely lucky, married well, or inherited wealth. And wealth by itself does not render any citizen ineligible for public office. (Or poverty, for that matter.)

But what massive wealth offers is literally the ability to avoid the voters. Yes, all candidates face the electorate at the ballot box. But wealth affords the ability to artfully mediate or remanufacture the narrative of one’s self, one’s policies or positions, one’s history and biography. Handshakes and baby-kissing at the county fair are no longer a mandatory ritual for a really rich candidate. The wealthy can manipulate elections through the legal means of self-financing a campaign. They can hire the best consultants (and Bloomberg rewards his consultants with $100,000 bonuses) and produce the most effective ads. And they can spend money on polling to parse the electorate for targeted emails and direct mail messages.

Most important, they need not depend on the Republican and Democratic national parties for financing. They need not kiss anyone’s ass.

These are the major leagues that professional egotists Lou Dobbs and Glenn Beck wish to inhabit. Despite their large incomes from various media, they’re still in the minors.

But Rush Limbaugh? He’s at or near the billion-dollar mark, thanks to a first eight-year contract for $265 million and a second for $400 million (and the rumored $100 million bonus).

Limbaugh could self-finance a Senate seat from Florida — or any state he chooses to move to and establish residency.

Frankly, I’d rather have Salma Hayek move to New York state, where I live, and run for the Senate. After all, she married well. With a net worth of $7 billion, she could easily buy that seat. Even Caroline Kennedy, with a net worth estimated between $100 million and $400 million, couldn’t pony up enough.

Welcome to the well-funded New American Political Oligarchy — a Bloomberg-Whitman production.

13 replies »

  1. Sad, ain’t it? As of 2005 there were 2.6 million millionaires and 449 billionaires living in the US. There are 305 million people in the US. It would seem then that .008% of the country is governing the rest of us. So much for government of the people for the people by the people. Conservatives have destroyed America.

  2. I’m thinking we should just do what’s been done for many centuries and allow the wealthy to buy noble titles like “Sir,” “Earl,” and “Duke.” It would help fill the treasury and maybe divert them from trying to buy much the much-less-impressive titles of “Congressman” and “Senator.”

  3. Not that I approve of billionaires electing themselves to office this way, but at least there’s some transparency with regards to their agenda. They can spend money on name recognition, but that’s not all good if they’re viewed as robber barons.

    While I find this troubling, I’m more troubled by the relatively “poor” congress folks who take gigs at lobbying firms after their terms are up. There’s no way to vote against candidates who accept back room handshake deals that aren’t consummated until after it’s all over.

    I could see legislation being enacted to prevent the former, but how do you prevent the latter?

  4. Some of the post, elected official lobbying gigs should be taken care of by campaign finance reform, as that would erode the power of lobbyists. If you can’t dispense millions, i’d imagine that being a lobbyist would be a lot less appealing…

  5. @ckbsh2u I have seen no evidence that America has been destroyed. The mail still gets delivered, crops are still being planted, public projects are still being constructed, the cops still patrol the street and the firemen still show up if you call. This country is still going on, and I suspect we’ll muddle through this socialist (crony protection) phase of the current administration. There’s something far more insidious on the horizon that I’m really surprised that the writers on this blog haven’t addressed yet.

  6. THE TAX BILL
    A tax bill is a life-altering event for someone. The money flows from taxpayers to tax eaters. To understand taxes, we must know who pays and who receives. Ordinary people pay the tax bill, directly or indirectly. No one is immune from a tax, even if they do not pay it from their own pocket. The money leaves the community none the less. Who gets the money? Those employed by the taxing source and the special interests to be rewarded for political support get the money. We can look at it like food. Some lose food and do with less and less nourishment, while others are able to eat well off the backs of the taxpayers. However, all of this transfer of wealth affects behavior. That’s where the rubber hits the road. If the one paying is discouraged from earning more, from which taxes come, the tax-take diminishes and must be replaced from other sources. The behavior of recipients is also affected, in that their appetites are encouraged to take even more. So, then, how should the money be used? Government has two roles it can assume. In America, the role was once to prevent injustice, which would be to protect citizens, and nothing more. For the Obama America, government’s role is to provide justice as defined from moment to moment to select interests. In this latter case, there is never an end to the need for more and more money, and the taxpayer is doomed. Claysamerica.com

  7. @ jeff watson: i would agree with you that America hasn’t been destroyed, but it’s not where it should be either. The mail still gets delivered but consumers’ demand for “free shipping” from their vendors has their vendors pressuring the USPS into an ever smaller corner. They’re currently contemplating an end to Saturday service. When the hell could I get packages mailed were it not for Saturday service? I work for a living. Crops are still being planted, but there’s a hornet’s nest there. Public projects? How about that bridge in Minneapolis? Face it, our nation has been robbing Peter to pay Paul for decades (and I don’t mean that in a partisan sense, both parties have been doing it). Public projects aren’t “stilll” being constructed. Things have just finally gotten bad enough that we’re getting back to them. If you consider the privilege of not falling into a river every time you cross a bridge “crony protection”, then keep slurping up the crap that Rush Limbaugh serves you.

    As for the “far more insidious”, please stop scaring us, Cassandra! What, oh what, is that horrible future on the horizon? If you say “national debt”, be prepared to dig up Reagan’s corpse and reanimate him: http://www.theonion.com/content/video/zombie_reagan_raised_from_grave

    The right has done 10 times the damage to put us in that hole as the left. While I do think Obama should turn the money faucet off now, the reality is that cleaning up after Bush/Cheney’s 8-year “yee-haw” bender was going to be costly, no matter who inherited it.

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