"Money On My Mind" is a monthly column by Jay Mandle. The views expressed here are those of the author, (not necessarily those of Democracy Matters or Common Cause), and are meant to stimulate discussion.
By Jay Mandle
Barack Obama’s victory shows that the United States has changed profoundly. But the way our first Black president-elect paid for his electoral success suggests that it is unlikely that his administration’s policies will be sufficiently progressive to meet the needs of the people of the country.
Obama was the first major presidential candidate since Watergate to choose not to pay for his campaign with public funds. Private donations fueled his effort. He could have defended his decision to opt out of the public funding system as an undesirable necessity. For the fact is that the funds available from the government have not kept pace with the amount of money that candidates can raise from private sources. What Obama could have promised, but did not, was that once in office he would move to rectify the public funding shortfall so that in the future the temptation to depend on special interest donors would be less compelling.
Instead he and his staff attempted to make a virtue of their choice. The argument was that Obama’s run for office was largely financed with small donations and that this, in his words, represented “a parallel public financing system.” With it, Obama maintained, the American people “will have as much access and influence over the course and direction of our campaign” as that “traditionally reserved for the wealthy and the powerful.”
The facts speak otherwise. A careful study prepared by the Campaign Finance Institute indicates that only 24% of Obama’s presidential funds came from donors who contributed $200 or less. That percentage was only slightly higher than the 21% John McCain received from small contributors in his presidential primary races and was almost identical to the 25% contributed by small donors to George Bush during the 2004 nominating process.
Indeed, the financial base upon which Obama’s campaign depended was quite narrow. As of October 27 only about 322,000 people had contributed $200 or more to Obama’s campaign. That means that only about 0.14 percent of the country’s adult population contributed 74% of the funds the Obama campaign accumulated.
Furthermore, the sources of Obama’s funds were highly skewed. Leading the pack were lawyers as well as the professionals who work in the Finance, Real Estate and Insurance Sector. In comparison to the $37.1 million contributed by members of the legal profession and $33.1 million donated by Wall Street, the contributions made by members of unions pale to insignificance.
None of this is good news for progressives. Of course, the Obama Administration will have to address the economic crisis and it is very likely that the neo-Keynesianism of the late Bush Administration will be continued after January 20. But over and beyond the need to stimulate the economy, this country urgently requires reform and renewal. Unhappily the way Obama’s campaign was funded means that it is unlikely to get it.
Most urgently, the United States needs a new system of financial market regulation and an extension of health care insurance to the growing millions who cannot gain access to that necessity. But those are precisely the kinds of innovations that the principle Obama funders will fight. Finance sector donors possess a vested interest in minimizing market regulation and contributors attached to the insurance industry can be expected to resist extending insurance coverage to people who cannot afford expensive premiums. Nothing can be more certain than that these political patrons will use the influence their contributions have accorded them to try to put a brake on regulatory and health insurance reform.
The problem is that no criticism of the influence of the major donors emerged during the campaign. Driven by the serial debacles of the Bush Administration and attracted by the profundity of the country’s racial redemption, progressives refrained from commenting on or concerning themselves with the implications of Obama’s funding. Too much seemed to be at stake. It was thought that nothing should be said that might put Obama’s possible victory at risk.
But this act of self-censorship was almost certainly a mistake. It means that the incoming Obama Administration is not under pressure to clearly identify how it would go about engaging its funders so as to be able to reform Wall Street and the health insurance industry. As a result of this absence, it is very likely that the Obama Administration will choose the path of least resistance in these areas and will be cautious in pushing for progressive change.
This caution however will not be a necessity associated with its governing a center-right electorate, as the mass media put it. Rather it will be a response to the interests of its major funders, in a political context in which the political left has been mute.