The Future of Progressive Reform

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. 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 against. 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 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 from its left 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.

Comments

[CarlDavidson]

Mute? Who's been mute? Certainly not our corner of the political left, 'Progressives for Obama.' We've published critiques from day one and continue to do so. Same with The Nation and HuffPost.The majority of the socialist far left groups opposed Obama and tried to take him down from day one, to their discredit, and are still at it. So who are you talking about? It's true that the mainstream media rarely reports on us, but that's another matter, and has always been true, Obama or no Obama.

[caterpol]

The CFI study also admits that:

Obama raised more money from hundreds of thousands of donors more than any other candidate; that an unprecedented number of these donors gave repeatedly in small amounts; that both one-time and repeat donors, giving in the aggregate less than $1,000, made up well over half (53%) of his contributor base; and that 2.5 million donors giving no more than $200 chipped into this campaign, more in this category than for all 2004 candidates combined.

http://www.democracyfornewhampshire.com/node/view/6278

So if, you accept the 53% figure, it's not quite as easy to say he's indebted to special interests, is it?

And while I understand that you're interested in making a case for campaign finance reform, I don't know that in the present economic meltdown, Obama suggesting a massive amount of more public funding for elections would be all that popular.

And is there some reason you chose to call him "our first Black President-elect" is in this context?

[cjo30080]

Jay Mandle wrote, "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."

I think these statistics are misleading, and I'll explain why by using myself as an example.

I contributed over $1,000 to Obama's campaign. Prior to that I donated approximately $100 to Howard Dean's campaign. As I recall, these are the only two presidential campaigns that I've ever contributed to.

My contributions to Obama's campaign began with a $10 dollar donation here and a $25 donation there. I eventually signed on to give monthly recurring donations of $25. I also eventually gave $100 donations here and there as the primary election heated up and later as the general election heated up, usually when I was asked to make a matching donation to encourage a first time donor.

I'm a lowly software developer, I have no political connections, but somehow a "careful study" by the Campaign Finance Institute has defined me a large donor that undermines Obama's claim to have broken from the moneyed interests.

In fact, there are tens of thousands, perhaps millions, of individuals like me who made multiple small donations that added up to significant sums over time, not because we're wealthy, connected, or expect favors in return. Rather, we believed in the cause and we gave until it hurt.

Therefore, I don't believe that the Campaign Finance Institute's study was as careful as Mr. Mandle would have us believe.

[basementfrog]

Where is Brooksley Born in Obama new cabinet? All this guy has done is bring in the old boys network (Hillary being one as well) from the Clinton Admin. and most of the old financial crooks who got us into this major economic catastrophe, particularly Summers, Rubing, and even Timothy Geithner, who also worked in the treasury department under Rubin and Summers. All Goldman or Citibank employees. Funny how many crooks come out of those two institutions.

Summers most vehemently pushed for congressional passage of that drastic deregulation measure, the Financial Services Modernization Act, Commodity Futures Modernization Act.

The only opposition from Brooksley E. Born who, as head of the Commodity Futures Trading Commission. She dared defy Summers and Rubin, as well as Greenspan. In frequent appearances before Congress, she warned that the burgeoning derivatives trading "threatens our economy without any federal agency knowing about it." In reward for her prescience, Born, a highly regarded legal expert on derivatives, was treated to scornful attacks from the old boys' network, led (again) by Rubin, Greenspan and Summers, who questioned her competency and insisted it was she who threatened the stability of the market.

and please paste the word limit so we know how much of our opionion you appreciate before we start writing.