Obama's Long Tail Money

There are all kinds of things about the candidacy of Barack Obama that are a first.

But the nature of Barack's money is perhaps the most significant and measurable difference that could have a long lasting impact on the country.

While Hillary Clinton and John McCain have used the standard mechanisms of fundraising to propel their campaign, Obama is raising tens of millions of dollars in Long Tail Money.

(I can't claim credit for this phrase - my friend James Joaquin of Bridgescale Partners coined the phrase, and shared it with me.)

But think about it.

Where is Obama's money coming from?

Not special interests. Not bundlers. Not PAC's. The average donation to Obama in January was $109.00. And that added up to $32 million in total campaign contributions.

A graphic on the Obama site says that about 860,000 people have donated this year. In January he raised $36 million. That's $58 million this month if you multiply the $109 by the number of donors this year. That's huge.

Here's how it looks on www.opensecrets.org

Obama collected more than $1 million a day in January -- largely thanks to small online donors -- bringing his total to $138.2 million. These numbers have been reported, so they're not news. But what do they mean? Think about it. We could have, for the first time, a President who arrives in the White House with essentially no outstanding IOU's.

The political impact of this simply can't be overstated.

Obama will arrive without any need to curry favor with Big Oil, Big Media, Labor, or any of the other significant fundraisers who have historically helped to propel candidates into office and then showed up to collect on their investments. No doubt Obama won't be in any position to act unilaterally, there's a Congress to consider, and certainly those elected officials need to be concerned about keeping their caufers full for the next election.

To be sure, Obama has his share of bad financial press. The blogesphere is full of posts about his campaign finance chair Penny Pritzker. Pritzker used to be head of the notorious "Savings and Loans" Superior Bank, one of the banks involved in the sub-prime mortgage crisis.

But despite that, political insiders seem to agree that Obama would arrive at 1600 Pennsylvania Avenue with a far shorter list of favors than almost any President in modern history.

The results could be significant. First of all, you can begin to imagine a Cabinet of really extraordinary individuals. Not lobbyists from industry taking a time out to help shape favorable policy, but rather real issue oriented public servants who go to Washington to serve. Think about institutions like Justice, Education, Energy, State, Labor, and Defense. With the confidence of Long Tail Money that has lifted him to the White House, Obama need not recruit anything less than the best and the brightest. It's been a while since we've had that in Washington. Remember "Heck of a Job, Brownie!" Hard to imaging that happening in an Obama Administration.

Then, think about the impact of Long Tail Money on Legislation. There is no doubt that we're facing some difficult decisions ahead. Iraq has powerful economic interests at stake when you look at Haliburton, KBR, and others. But Obama's isn't funded by those interests. Ditto for Oil, and Automotive, and Labor. These area's could face significant change, with a President free to act without fear of a tap on the shoulder from a generous donor. And finally, there is the inevitable issue of Taxes. Historically, donors expect to keep their loop-holes in place, at least in part by getting the attention of their funded friend. But not this year.

Long Tail Money is the ultimate campaign finance reform.

It's Average American's voting with checks of $25, $50, and $100 dollars. They're not trying to buy influence. They're just trying to make sure that someone with their interests at heart has a shot at the Presidency.

This year, that may happen.

Comments

[BarnabyDinges]

These anti-capitalists rants and posts make me nostalgic for my college years. But in the present day they seem wildly unfair and certainly do a disservice to the fine corporate and charitable work of Penny Pritzker and her family. Is this what happens when a successful woman enters public service? Apparently it's all about scorched earth campaigning -- trying to drive good people out of the process -- and not the truth. No wonder so many Americans are turned off by politics.

The fact is, Penny Pritzker left her position as chairman of the board of Superior Bank 14 YEARS AGO, and years before there were any questions about the work of its managers and auditors. The Pritzker family lost millions by investing in the bank. The roughly 1,400 bank customers who had more than $100,000 in deposits are substantially whole.

The activities of Superior Bank in the mid-90's have no bearing whatsoever on current mortgage and lending conditions affecting the US economy. This is old news being manipulated by people who have agendas. The Pritzker family has done more to help Chicago than any family I know. They shouldn't be driven out of politics by the shock and awe tactics of mean-spirited and mostly anonymous bloggers.

As a former investigative reporter in Chicago, I"d say these old stories were thinly reported and agenda-driven back in 2001 ¦ and carry even less weight in 2008.