"Fewer than 400 families are responsible for almost half the money raised in the 2016 presidential campaign, a concentration of political donors that is unprecedented in the modern era," the New York Times breathlessly reported last Sunday. The popularity of so-called Super PACs, which can raise unlimited funds, has allowed the wealthy to dominate the fundraising scene. "The intensifying reliance on big money in politics mirrors the concentration of American wealth more broadly." Democracy, we are meant to believe, is at stake.
Drawing a connection between Republican dominance in high-dollar giving and the apparent increase in income inequality is a fashionable political and journalistic trend—one that makes no sense. Liberal economists say inequality has been growing for decades, as Democrats alternated control of Congress and the presidency with Republicans and often enjoyed a big-money advantage. I don’t recall the Times fretting during the 1990s, when Hillary Clinton’s husband deregulated Wall Street and the Democratic Party was rolling, sometimes drowning, in cash.
Then, in 2004, a small group of extremely wealthy people decided to influence the political process. They devised their plan at a secret gathering in the Hamptons, where they began issuing seven-figure checks to organizations devoted to an ideological agenda and the overthrow of a president who, at the time, was still relatively popular. These donors had grown rich off Wall Street investments, off selling insurance and subprime mortgages—classic liberal bugaboos. And they stood to profit from the increased access and favorable policies they would enjoy if their preferred candidates won the election.
How did the New York Times cover this attempted putsch? On May 31, the Times published a profile of one of these oligarchs, "And for His Next Feat, a Billionaire Sets Sights on Bush," which described the "rousing standing ovation" that hedge fund billionaire George Soros received for a "blistering attack on President Bush" delivered at the Cathedral of St. John the Divine in Manhattan. The Hungarian-born Soros, the Times said, "has emerged as a financial backer of Democrats, becoming a welcome source of money and a lightning rod for criticism." Not criticism from the Times, to be sure, which extolled Soros’ Horatio Alger life story and described the liberal good works of his Open Society foundations.
The newspaper of record included favorable quotes from associates—Soros approaches political giving "like a business," said one of his employees—and noted that Soros maintained his distance from the day-to-day operations of the left-wing institutions he seeded. "For instance," the Times reported, "even though he and Senator John Kerry, the presumptive Democratic nominee, used to see each other socially in Sun Valley, where they both have homes, they have not talked recently." How noble.
In July 2004 the Times Magazine published "Wiring the Vast Left-Wing Conspiracy" by Matt Bai, an in-depth look at the Soros operation. "The real significance of Soros’ involvement in politics has little to do with the dollar amount of his contributions," Bai wrote. "What will stand out as important, when we look back decades from now at the 2004 campaign, will be the political model he created for everyone else." Bai’s article remains an excellent introduction to the contemporary Democratic Party. It contains no mention of income inequality, no suggestion that Soros’ outsized role in shaping the oldest political party in the world might have social or moral implications.
What seems to have concerned the New York Times most, in fact, was defending Soros against charges that he was too powerful. It’s "a little silly" to suggest that Soros "has resolved to buy the Democratic Party," Bai wrote. "If George Soros really felt like buying the party, you would know it." In September 2004, when the GOP gathered in New York to nominate Bush for a second term, Paul Krugman latched on to some of the shakier criticisms of Soros, and said they were evidence that "many of the people at the convention, for all their flag-waving, hate America." His column was headlined "Feel the Hate." I can certainly feel Krugman’s.
A September 2004 article by Glen Justice, "New Pet Cause for the Very Rich: Swaying the Election," noted, "Democrats got an early start financing 527 groups," and called Susie Tompkins Buell, the centimillionaire apparel queen and left-wing donor, "one of the new stars of political giving this year." A Katharine Q. Seelye article the next month reported that Soros-aligned groups were looking "far beyond Election Day" to "build a permanent ‘message machine’ and strategic apparatus to counter Republicans." They succeeded.
Soros ended up spending more than $23 million in 2004. All of the money went to liberal groups. His friend, the now-deceased insurance magnate Peter Lewis, contributed another $23 million. Clinton bro Steve Bing gave $14 million. Herb and Marion Sandler, the subprime monarchs, donated $13 million—all to liberals.
Indeed, of the top 20 donors to 527 groups in 2004, only seven gave to conservative-leaning organizations. Liberals dominated the outside spending contest that year. Liberals dominated the outside spending contest in 1996, in 1998, in 2000, in 2002. Liberals dominated the contest in 2006. They dominated it in 2008. And the Center for Responsive Politics totals do not capture the full range of union spending for liberal causes and Democratic candidates, which the Wall Street Journal calculates is as much as "four times as much … as generally thought."
It was only in 2010, in the aftermath of the Supreme Court’s Citizens United decision, and in the run-up to the reelection campaign of our first black president, that the media took a special interest in the malign effects of money in politics. Now it was the conservative and libertarian rich, stung by President Obama’s tax increases and regulatory agenda, who sought change. The sums they raised through outside groups in 2010 and 2012 were enormous—about enough to match the overwhelming spending of the Obama campaign.
The idea that 400 wealthy families are manipulating American politics to enrich themselves and make the country more unequal is enticing. There may even be some truth to it. But the story told by the Times is simplistic. First, it makes a certain amount of sense that right now the "concentration of donors is greatest on the Republican side," since the Republicans are at the beginning of their most open and competitive presidential primary in memory, with 17 candidates, one of whom can draw from a more than $2 billion fortune. The Democratic primary, meanwhile, is ridiculously uncompetitive—yet the Times’s list still contains many $1 million donors to Hillary Clinton, including Soros and Herb Sandler and Steven Spielberg. Expect those big donations to grow.
Many of the most important liberal donors, such as Fed Eychaner, Tom Steyer, and James Simons, have not yet entered the outside spending game. Steyer spent $74 million in the 2014 cycle, and Michael Bloomberg spent $28 million—more than twice the amount donated by Sheldon Adelson, the biggest donor on the Republican side that cycle. Eychaner spent $10 million.
The Times notes that New York hedge fund billionaire Robert Mercer’s $11 million in contributions makes him "the top known political donor in the country so far this election cycle." But the article contains not a single mention—not one—of the liberal Simons, who is Mercer’s business partner, and who spent roughly the same amount as Mercer in 2014. Now, from a strategic point of view, it makes a lot of sense for a hedge fund to have stakes in both the Democratic Party and the Tea Party wing of the GOP. Indeed, such a fund would be a natural subject for an in-depth article by the campaign finance reporters of the New York Times. That article hasn’t been written.
Let it be said until the end of days: Money is necessary but not sufficient in politics, both the Republican and Democratic parties rely on wealthy donors, the motives of all of these donors is a mix of altruism and self-interest, the managerial class that rules the world is divided into right- and left-wings that struggle over control of resources and status, and one of the weapons the left wing uses to subdue the representatives of carbon energy, heavy industry, and conservative finance is "campaign finance reform," which strengthen the hand of government, media, and labor. What’s more troubling: That rich people are engaged in politics, or that the newspaper of record isn’t telling us the whole story?