Economics / Organizational Strategy

For the People, By the Money

The 2016 presidential election is upon us; well it’s still about a year away.  However, the campaign trail is hot and candidates are doing everything they can to sway the minds of voters in their favor. As a 20 year old college student, this is the first election my peers and I can participate in. However, it’s honestly a little overwhelming seeing all the commercials, watching the debates, and keeping up with all the candidates. Every candidate has a slew of commercials, websites, and billboards all expressing why they should win. Every day the news is talking about who said this, who lied about this, and who isn’t fit to lead this country. However, no one is talking about how all of this is funded. Keep in mind that these candidates aren’t being given free space to plug their image and cause into the minds of the American people. In addition to advertising costs, there are traveling fees, boarding fees, and the many other miscellaneous costs expensed by the candidates. Hundreds of millions of dollars are spent on campaigns. Moreover, capitalism is still alive and it doesn’t give allowances; not even to the next possible leader of this country.

democrats_and_republicans_colludingFor most people, they seek a candidate who aligns with their thoughts and views. However, have you ever considered the motives behind the decisions of these politicians? If you’re running against Donald Trump, you’re running against about $4 billion in net worth. Well its $9 billion if you ask “The Donald” himself but who’s counting right? His campaign reported $1.9 million in funding received during the second quarter of this year. Of that money Trump gave $1.8 million. You would think candidates would have trouble keeping up with Trump in the “money race.” Actually, not in the slightest bit. Hillary Clinton has received over $400 million over her career in campaign spending. This year, by the third quarter, she raised the most total funding among all candidates with $29.9 million. Bernie Sanders isn’t far behind with $26.2 million, and Jeb Bush has raised $13.4 million. Surprisingly, Donald Trump isn’t even in the top 5. The committees of these campaigns are only allowed to receive $2,700 per person in funding. The rest of this money however, is donated through Political Action Committees or “Super PAC’s.” These groups are made up of people who support specific issues like abortion or the legalization of marijuana. There are no limits on how much they can fund campaigns and they account for a lot of candidate spending.

These Super PAC’s open the door for the wealthy to donate as much as they see fit to the candidate of their choice. Joe Ricketts, the founder of the online financial services company TD Ameritrade, donated $5.1 million this year. Farris and Dan Wilks from Texas who received their billion dollar fortune through fracking, donated $15 million. Robert Mercer, a wealthy hedge fund manager, donated $11.3 million. Corporations also are partaking in the giving of generous donations to politicians. Hilary Clinton’s top sources of funding in 2016 were Citigroup Inc. with $266,160, Goldman Sachs $234,670, and MetLife with $155,860. She also received funding from Lehman Brothers, Merrill Lynch, and Morgan Stanley. This wouldn’t raise any red flags, however most democrats are known for their support of the regulation of banks and investment firms. Moreover, Hilary Clinton doesn’t support reinstating Glass-Steagall whose repeal arguably helped contribute to the 2008 financial crisis; which the aforementioned institutions were heavily involved in. I don’t have hundreds of thousands to donate to Hilary Clinton or any other candidate for that matter, and I doubt many of her supporters do. However, normal Americans are still contributing as much as they can.

Middle-class Americans are taking their hard-earned money and are donating it to the campaign of Donald Trump. Mr. Trump clearly doesn’t need funding, however, he’s still receiving donations from all kinds of voters. Rudolf Pohlreich an Iraq vet from Arizona said this about Trump. “It’s like the police when they arrive on the scene — when there’s chaos, you want the police on the scene, you want a—holes to show up and take control, nullify the situation and maybe apologize later.” He donated $250 dollars to the campaign and 63 others maxed out their contribution at $2700 two weeks after the announced it. Trump’s main demographic isn’t even middle class Americans. Just imagine how much the middle class must support candidates such as Bernie Sanders and Hilary Clinton. They try to target less financially powerful demographics such as women and youth voters. Sure, these groups are represented by Super PAC’s, however, there are definitely individual voters in these demographics who financially support the campaigns directly. Middle America wants to be heard, however they don’t necessarily have the funds to compete with the wealthy. Another rising issue is that the wealthy don’t even care who they fund.

The rich now may not only be giving to one candidate, but multiple candidates, even if they are giving across multiple parties. The daily beast stated that 17 wealthy executives donated at least $1,000 or more to committees supporting Jeb Bush and Hilary Clinton. Some have given $30,000 to one and $2,700 to the other. Others are split down the middle, giving around the limit of $2700 to both candidates. This isn’t just these 17 individuals either. Larry Noble of the Campaign Legal Center said, “Some of them will say they believe in the process, but the truth is you usually see them giving to people who will be most helpful to them if [the politician] gets into office. They are not necessarily Republicans or Democrats, they are business people first.” They are BUSINESS PEOPLE first. These individuals can use their affluent status and wealth to give the candidates of their choice an edge, no matter what party they identify with. Another startling idea is that individuals may not be the only ones taking part. Who’s to say corporations aren’t funding both sides of the election. Tech CEO’s, Wall Street Execs, and even the corporations themselves all have a hand in this election and that hand is definitely heavier than the hands of the American people.

Current young voters and potential future voters are taking notice to the trend of corporate and wealthy political funding. Although they may not have the money, they do have the technical prowess to shed light on the ties between money and politicians. Nicholas Rubin, a 17 year old programmer from Seattle, Washington created an internet browser plugin called Greenhouse. This plugin activates whenever a member of Congress shows up on a web page. Highlight their name, and you immediately get a breakdown of the groups funding them (data provided by opensecrets.org). A quote directly from Rubin’s Greenhouse site reads, “Some are red. Some are blue. All are green. What it signifies is that the influence of money on our government isn’t a partisan issue. Whether Democrat or Republican, we should all want a political system that is independent of the influence of big money and not dependent on endless cycles of fundraising from special interests. The United States of America was founded to serve individuals, not big interests or big industries. Yet every year we seem to move further and further away from our Founders’ vision.” The plugin has gained over 70,000 users in just 10 months on the Google Chrome web store. Yahoo Tech, Engadget, and Washington Post have all covered Rubin and Greenhouse. Rubin’s plugin has made waves in the tech world, while also shedding light on a topic that isn’t new at all to the American government.

Our government has put laws in place forbidding certain groups from funding elections. The Tillman Act of 1907 prohibited corporations from funding elections. The Taft-Hartley Act, enacted in 1947, prohibited unions from donating, but both acts weren’t really enforced.  However in 1971, Congress passed the Federal Election Campaign Act. This required campaigns to report the donations and expenses of its operations. But a part of this act was ruled unconstitutional, and that led the way for the Citizens United ruling in 2010. This ruling allowed corporations and unions to donate to campaigns, just not directly. Thus, we now have to deal with the flood of money being given to candidates in 2016 through Super PAC’s and other political organizations. So who will in 2016? Bernie Sanders? Hilary Clinton? Jeb Bush? I don’t know. Ask your wallet, and pray you have to enough in it so your voice is heard.

Sources:

http://www.forwardprogressives.com/want-know-funds-politician-now-theres-app/

http://allaregreen.us/

http://www.nytimes.com/interactive/2015/10/11/us/politics/2016-presidential-election-super-pac-donors.html

http://www.nytimes.com/2015/10/11/us/politics/wealthy-families-presidential-candidates.html#donors-list

http://www.opensecrets.org/news/2010/11/democrats-and-republicans-sharing-b/

http://www.forbes.com/sites/katiasavchuk/2014/11/03/tech-billionaires-hedge-election-bets-by-funding-both-parties/

http://www.politico.com/story/2015/08/donald-trump-president-2016-donors-213102

http://nypost.com/2015/06/17/trump-funding-presidential-campaign-without-donors/

https://www.opensecrets.org/politicians/summary.php?cid=N00000019&cycle=2008

https://www.opensecrets.org/politicians/contrib.php?cycle=Career&type=I&cid=N00000019&newMem=N&recs=20

http://www.thedailybeast.com/articles/2015/08/04/hillary-clinton-s-mega-donors-are-also-funding-jeb-bush.html

http://www.nytimes.com/interactive/2016/us/elections/election-2016-campaign-money-race.html

http://www.publicintegrity.org/2012/10/18/11527/citizens-united-decision-and-why-it-matters

https://www.opensecrets.org/pacs/superpacs.php