The Campaign Finance “Bubble”

Campaign funding is in the middle of it’s own little “Nasdaq” bubble this year. Bloomberg reports today that between Bush, 10 democratic candidates, national party committes, and outside groups, $623.4 million for the election thus far. To get a sense of how extraordinary this is, if you exclude non-candidate funding, Bush and 10 Democratic rivals have spent $242.5 million through Feb 29, 2004; contrast this to the $277.6 million that 19 candidates spent in total throughout the entire 2000 primary season.

Part of this is accounted for by the doubling of individual contribution limits to $2000, and by the front-running candidate’s decisions to decline federal aid which would have capped spending during the primary season.

This is pretty amazing stuff. It suggests that individuals and groups will spend upwards of $1 billion before this is over, possibly considerably more.

Interestingly, the myth that Democrats are being outstripped by Republican fundraising isn’t true. Through the end of February, Republican fundraising (the candidate himself, RNC, other committees) has raised $313.6 MM; Democrats have raised $309.8MM, albeit in a larger series of smaller committees. The real difference is in the warchest under direct campaign control — Bush has $171.4MM to date, versus Kerry’s $61MM.

Even more interestingly, Democrats have the largest contribution sizes overall — thanks to George Soros and others like him (Soros has helped raise $32.7MM for the Democrats by Feb. 29).

What should concern all of us is that high office is forever closed off to “ordinary” citizens. You don’t have to be personally wealthy to be elected (though it helps), but you must be extremely well-connected and well-supported. And the latter requirement says volumes for how much we can expect high office-holders to fight special interests. In that, Ralph Nader is 100% correct — but a pie-in-the-sky solution to the problem is no solution at all.

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