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In the 1896 election, Mark Hanna, the campaign strategist for William McKinley, memorably quipped, “There are two things that are important in politics. The first is money and I can’t remember what the second one is.”
A recent news story tells the tale of our new Gilded Age.
Last week, a gaggle of moguls made news by having dinner. Hosted by venture capitalist David Sacks, the party included Elon Musk, the world’s second-richest man, along with Rupert Murdoch (see Succession season four); Peter Thiel, who almost single-handedly put J.D. Vance in the Senate; Travis Kalanick, cofounder of Uber; and Michael Milken, whom those of a certain age will remember as the formerly jailed “junk bond king” pardoned by Donald Trump. The meeting was taken as a sign of Silicon Valley warming to Donald Trump and a turn toward the right in that community of vast concentrated wealth and cultural power.
That conclave reveals much about the real story of money in American politics. Ever since Citizens United effectively deregulated campaign money in the United States, there’s been a race between a flood of small donors empowered by digital fundraising and big donors unleashed by the Supreme Court. Small donors get the ink. More than we realize, though, big donors like Musk and his friends have secured the power.
Small donors gave more than $4 billion in the 2020 federal elections, up from $1 billion in 2016. Largely good news, one might think. Yet because that rise has coincided with ever worsening polarization, some pundits have blamed American political dysfunction on those $10 and $20 gifts flooding in to some politicians.
A new analysis by my Brennan Center colleague Ian Vandewalker punctures many of these myths.
For starters, while funds from small donors have grown, those from megadonors have risen much faster. As the Brennan Center reported last year, in 2022 just 100 big donors still outspent all small donors by 60 percent. Small donors are still swamped by big donors. “In 2022, just 21 individuals and couples together spent $783 million, easily outspending the total given by the millions of people who made small donations,” Vandewalker writes.
Those big donors can be just as ideologically extreme as small donors. Incumbents, especially Republicans, live in terror of a billionaire-funded super PAC dumping huge sums to defeat them. Megadonors now sponsor candidates like prize racehorses.
What about polarizing attention-getters like Rep. Marjorie Taylor Greene (R-GA), currently busy torturing House Speaker Mike Johnson (R-LA)? True, figures like Greene attract small donors through a freaky political brand. So do some firebrands on the left. But most small donor money goes not to the most extreme candidates, but to the most famous. Republican Sen. Lindsey Graham (SC) and Democrat Rep. Nancy Pelosi (CA), establishment stalwarts, have raised staggering sums from small donors. Donors from around the country pour money into races to support candidates such as whoever is running against Sen. Mitch McConnell (R-KY) at any time.
Polarization in politics has many causes. So does the fracturing of power that has made the House, especially, ungovernable. In the quarter century since 1998, Republicans have chosen seven House speakers; the Democrats, one. All that fractiousness, basically limited to one party, rose before social media and online fundraising platform ActBlue and cannot be blamed on the recent rise of small donors.
In any case, there’s a way to minimize any harm from the surge in small donors even while bolstering the trend. Public financing of campaigns remains the best way to ensure that politicians can listen and respond to the needs of citizens, not just donors. A new program enacted in New York State provides multiple matching funds for small donations when those gifts come from within a district. Federal legislation such as the Freedom to Vote Act should provide matching funds for in-state contributors only. That would keep the politicians closer to home.
