Money and Obama
Money and Obama
On Thursday June 19th (a.k.a. Juneteenth here in Texas), Senator Barack Obama declared his emancipation from the public financing system for US Presidential Elections. The punditocracy thinks this is a funding battle between two political parties and their respective candidates. In my opinion, there is a transition happening to a post-Internet political party. Obama has recognized it and his funding decision embraces it.
Political parties control access to money and political activists. This control, if it can be marshaled for electoral success, results in real power. The iron triangle of parties, media and special interests has worked to reinforce that control. Senator Obama, by exploiting the power of the Internet, has split a large chunk of the money out of any party’s control. He is also using the Internet to attract the activists. In other words, the parties no longer control the entrance to the political process. After Obama, any candidate can raise money and gain supporters without having to be vetted by party insiders who support the status quo.
The Obama Paradox
Senator Obama, as a community organizer, has long worked for campaign finance reform. Most of the criticism of his decision to leave public election financing system is his apparent betrayal of that goal. Yet any decision is about balancing values and goals. Let us look at some factors Obama had to balance.
First, Obama is, to quote Senator Clinton, “in it, to win it.” Hence, tactical and strategic advantages need to be carefully weighed. The Obama team has demonstrated a huge tactical advantage over Senator McCain’s campaign from their prodigious network fundraising. Apparently, half of Obama’s $240 million primary campaign election funds came from 1.5+ million people donating less than $200 each. In other words, just sticking to his most numerous donors brings his campaign more money than the public financing system ($120M v $85M). In a real and profound sense, his campaign is already community funded. One does not throw your community funded financial advantage away lightly.
Obviously, in early 2007, Senator Obama naïvely offered to make a deal with the Republican nominee to mutually preserve public financing. Equally obviously, he had no idea he would also have the great success of building a true small donor, community funded election campaign. Here is the paradox. Both funding methods are public. One organically grew up around his campaign. The other uses government funds. Which one is more aligned with Obama’s values? While some may quibble about the difference, let’s remember that no candidate has ever raised so much money from so many individual investors in the history of any democratic campaign anywhere. I assert there is no meaningful difference between the methods. The community/small donor funds are intrinsically aligned with Senator Obama’s values. His decision makes sense.
Second, can either candidate actually reign in or otherwise control members of his party? A promise to preserve public financing is not a suicide pact. As Senator McCain demonstrated recently, his own party ignored his pleas to stop playing a racially divisive ad in a recent primary. In other words, neither Senators McCain nor Obama can actually make a deal that would be respected by other members of the political firmament. That is the lesson of the 2004 “Swift Boat Veterans” 527 groups character “hit job” against Senator Kerry. They are, by statute, independent of every campaign operation and, hence, any agreement the campaigns may make cannot have any force over the 527 groups. While the Republican 527 groups are not in evidence right now, they are out there and they’re keeping their “powder dry”. Senator Obama has to expect them to show up in the fall. When they do, he needs the resources to fight back. Perhaps Senator Obama was naïve to suggest working out a deal with the Republican nominee. Or is Senator McCain cynically calling for Senator Obama to unilaterally disarm his campaign?
Third, Obama wants to control his own message. When a significant number of political messages are funded outside of the candidate’s control, he or she is at their mercy. Once again, Senator Kerry versus the “Swift Boat Veterans” shows the imbalance. Senator Kerry, with his limited, publicly financed resources, had to respond to the “Swift Boat Veterans”, a foe with potentially unlimited resources. That response could not have legally been coordinated with any other organization. Hence, Senator Kerry could not fully respond and he suffered the consequences. To put it bluntly, in 2004 Senator Kerry brought a knife to a gunfight. Senator Obama has already started to show a rapid message response methodology. When an attack comes from any member of the opposition, they respond to nullify it and then start a riposte to reframe the debate. Senator Obama is bringing a Special Forces platoon to a gunfight. He can only do this with enough resources to roughly match their aggregate resources. The “Swift Boat Veterans” and other 527 groups killed effective public financing before Obama was elected to the Senate.
Obama’s paradox is a tough one. He has successfully created a broad base of supporters (1.5+M) for funding his campaign. It meets many, if not all, of the goals of the public funding model. Does he walk away from that to embrace the public funding system and its attendant restrictions? This single decision could cost him the election.
On Juneteenth, he chose to stay with the system his team had already built. He has emancipated himself from external constraints. Hopefully, he has emancipated the rest of us.
Postscript:
Obama could have handled his withdrawal from public election financing announcement better. His speech vaguely covers the paradox I describe above. Unlike most of Senator Obama’s speeches, it wasn’t focused or clear. I think this is due to the transitional nature of his candidacy.
Juneteenth celebrates the day the Emancipation Proclamation came into force in Texas, June 19, 1865.