Early in the Republican primary race to see who would challenge Bill Clinton in 1996, then-Texas Senator Phil Gramm said, “The only primary that counts is the money primary and I’ve already won it.” Mr. Gramm raised and spent an impressive $20 million, but he was nonetheless out of the race before New Hampshire citizens got a chance to vote. He and his wife were later caught up in the Enron scandal.
Despite his inept run, Mr. Gramm was not completely incorrect about the money. The fact that Rudy Giuliani is raising more money from other people than Mitt Romney is willing to kick in from his personal fortune speaks well for Mr. Giuliani’s chances. On the Democratic side, Hillary Clinton and Barack Obama are leaving all other contenders in the dust. Not only do candidates need cash to get their message out via commercials and yard signs, but the reporters who constitute “free media” tend to ignore candidates who do not have scores of millions in their war chests.
In the 21st century, there’s another “money primary.” The Tippie College of Business at the University of Iowa runs real-money political futures markets as part of its research and teaching mission. Futures markets have long been a staple of commodity trading. If a seller is willing to deliver a bushel of corn in April 2008 for one dollar and you think the price of a bushel of corn next April will be two dollars, then you buy as much corn as you can for a dollar a bushel and pay nothing until next April. If your prediction is right, you’ll double your money. If, instead, the price of corn is 50 cent a bushel, you’ll pay twice as much as the corn is worth.
Instead of corn or pork bellies, the Tippie College is asking people to put their money on who they think will win the respective party nominations (and, after that, the White House). This market has been eerily accurate. In 2000, despite John McCain’s early strong primary showing, the money was on George Bush the whole way. In the final weeks before the general election, Mr. Bush led in the “winner take all” market, while Al Gore had a slight advantage in “vote share” market. Wonder how much Karl Rove (and Antonin Scalia) made on that one.
As of Wednesday, the 68 percent of the market predicts Ms. Clinton will get the ’08 nod, Mr. Obama is at 15 percent, Mr. Edwards is around 6 percent and all other candidates scoop up the remaining 11 percent. In the GOP market, Mr. Giuliani is pulling away at 44 percent, Mr. Romney’s around 25 Fred Thompson, 14, Mr. McCain, 6 and the rest 11. The Democratic Party holds a narrow lead in the presidential market.
What does all this mean? There are many interpretations; here’s mine: It means the objections of the religious right and social conservatives will not prevent Mr. Giuliani from winning the Republican nomination and the objections of the anti-war left and social progressives will not prevent Ms. Clinton from winning the Democratic nomination.
It means – all you one-issue voters – that your concerns really don’t matter. Did you see the way all the Republican front-runners blew off the debate on African-American issues at Morgan State College recently? Get used to it; that’s the way of the future. Did you see how Mr. Bush vetoed the SCHIP program, even though Congressional Republicans begged him not to, knowing how it would hurt the party next November?
This is the way America is governed today. George Bush listens to the corporate masters who first gave him a baseball team, then the Texas governor’s mansion and then the White House. Those corporations didn’t like SCHIP, so it was vetoed. Those corporations don’t care if it hurts Congressional Republicans, because Congressional Democrats are just as ready to give corporations what they want.
That’s why it doesn’t matter if the right doesn’t like Rudy or the left doesn’t like Hillary. The money likes them both. Bill Clinton calls himself “America’s first black president” but what made his tenure historically significant was that he pushed NAFTA through the Congress and “reformed” welfare nearly out of existence. He didn’t do those things for African Americans, he did them for Corporate Americans.
The sad truth is Howard Dean was right when he said he was running to represent “the Democratic wing of the Democratic Party” and that, more than any “scream” is what doomed his campaign. Another sad truth is Ralph Nader’s charge that Republican and Democratic candidates read from the same corporate hymnbook.
The saddest truth is contained in an old graffito that becomes more accurate every election cycle: “If voting could change anything, it would be illegal.”
© Mark Floegel 2007
Iowa Electronic Markets:
http://www.biz.uiowa.edu/iem/markets/nomination08.html
One Comment
The term that comes to mind is “Political Oligarchy” Both side of the aisles with a few exceptions (like Bernie) are a bunch of rich people. Are you from Yale or from Harvard? Do you like Vanilla or Chocolate? it doesn’t matter its still ice cream. The point is, why do we trust a bunch of rich white folks that sit on their ass all day under a marble dome to run a country?
The electoral system overall has been rendered ineffective by the intrusions of the executive. This is not just a US phenomena, just last Sunday in Costa Rica in the first free trade agreement referendum ever the citizens decided to vote in favor of CAFTA. The vote was simple, YES or NO. Oscar Arias who received the Nobel Peace Prize on behalf of Costa Rica back in the 80s, bought over by corporations thereafter, was a cheerleader extraordinaire from the president seat. What president seat? yes Oscar Arias is the current president like he was back in the 80. In the last 3 years the Supreme Court was reshuffled and voted in favor of a reelection clause. Then guess who got elected? Arias didn’t even debate his opponents he ran in the coattails of his fame from the 80s and won by such a thin margin that the hum supreme court decided the election – sounds familiar. But it doesn’t end there, what happens next is straight out of a textbook for “How to break a country”. First agenda item, the only agenda item is the CAFTA. Congress like Pilates wash their hands and say: Let’s have a referendum, le the people decide. Here’s the punchline to Mark’s piece: Arias, as an acting President, raises 500 million dollars outspends his opposition (they only had 50 million) and of course the strongest purse wins. Now Costa Rica is going to shit.
Ah the power of money.