Money Still Rules US Politics

Whether it’s Donald Trump, the Democratic Party, or midterms, the best way to understand US politics is to follow the money.

by Paul Heideman Jacobin Nov 6, 2018

Though pundits have been scrambling to find new and inventive ways to describe the extraordinary nature of this year’s midterm elections, in one respect they’re just like the 2014, 2010, and 2006 contests: they’re the most expensive on record. Money has poured, in particular, into Democratic candidates’ coffers, with mediagenic figures like Texas Senate candidate Beto O’Rourke collecting massive amounts from out-of-state donors.Thomas Ferguson is the leading scholar of money in American politics, having produced study after study on the subject since the 1980s. In books like Right Turn: The Decline of the Democrats and the Future of American Politics and Golden Rule: The Investment Theory of Party Competition and the Logic of Money-Driven Political Systems, he has traced the way “investors” in political parties have shaped US politics from the American Revolution to the present. In a paper on spending in the 2016 election, for example, Ferguson and his colleagues found that while Hillary Clinton was certainly the biggest beneficiary of capital’s largesse, money pouring into Republican senate races was actually central to Trump’s victory.

Now, in a new paper, Ferguson takes on an even more controversial topic: voter behavior in 2016. Since the election, the liberal press has been quick to dismiss interpretations of Trump’s victory as linked to the stagnating economic fortunes of most Americans. These kinds of explanations, they argue, simply excuse the racism that drove Trump to power. While not dismissing the role of racism in Trump’s election, Ferguson and his colleague’s new work shows the way an economy for the 1 percent paved the way for Trump’s victory.

In the following interview, conducted by sociology PhD student Paul Heideman, Ferguson discusses his research on the 2016 election, the future of the Democratic Party, and the state of US politics on the eve of today’s midterms.


PH

You and your colleagues trace the “populist” upsurges of 2016 in both major parties to the runaway growth of a “dual economy” in America and the failure of our money-driven political system to do anything about this but talk. Yet among liberal commentators in the mainstream media it’s now all but axiomatic that economics cannot explain the election. They pin its outcome on racial resentment and gender prejudices. What’s your take on this line of argument?

 

TF

The short answer is that these folks are running a perfectly good point into the ground. From the day he announced — indeed, even before then, when he kept questioning where Obama was really born — Trump and his campaign hammered away on racial and gender-related themes. I doubt there was any dog whistle he and the campaign didn’t try out.

But Trump was also making noises that no other major Republican challenger had in many years. Parts of his critique of international finance, globalization, outsourcing, and free trade overlapped with Sanders’s. Also like Sanders, instead of burying his listeners in a blizzard of four-point plans and policy-speak like Clinton did, he forthrightly talked about the need to restore prosperity, bring jobs back to the US, and to “drain the swamp.” He criticized Goldman Sachs, raised the prospect of repealing the carried-interest tax deduction beloved of Wall Street, and mocked Bush’s decision to invade Iraq. He also questioned the value of NATO to the US and the continuing wars in Afghanistan and Iraq, while pushing to reduce tensions with Russia.

This is not to say he was a carbon copy of Sanders; he wasn’t, as anyone who read between the lines of his comments about blue collar workers vs. unions or paid attention to what he has done since taking office on taxes, labor policy, and immigration.

But the economic appeals were clear and powerful.

In the days after the election, I was astounded how fast the Clinton campaign’s notion that it was all due to the “deplorables” crystallized into “common sense” in so many quarters. Or the parallel wave of assertions that the electorate’s rejection of her was a convulsive reaction to the election of the first black president in American history. That one seemed to me quite implausible: why should the reaction be so much stronger in 2016 than in 2012, when Obama was running for reelection?

Trump’s boasting about his sexual conquests and tirades about women’s rights and roles and his volte face on abortion to please the Right were all obvious, but even newspaper polls suggested that the story had to be more complicated in regard to white women and possibly even Hispanics.

 

PH

What about the post-election academic studies that everyone keeps citing in support of the conclusion, though?

 

TF

If you look closely, you will see a kind of schizophrenia pervades these. Studies by Shannon Monnat and other scholars that analyze aggregate county-level voting returns suggest that Trump’s appeals resonated especially strongly in poorer areas left out of the painfully slow recovery of the Obama years. The force of the dual economy explanation is plain in these.

But the big studies of individual voters do not show this pattern. One problem with them is that the economic variables that you would really like to have — for example, vulnerability to imports, but above all longer-run trends in economic growth — are just not to be found in the data these studies collect. They can only be added at enormous time and expense and sometimes not at all. Statistical software for relating complex surveys of individuals to local growth patterns over time is also imperfectly developed.

 

PH

But you can’t beat something with nothing. If you don’t like those studies, what’s your answer?

 

TF

Exactly. So my old colleague Ben Page and I set out to analyze the American National Election Survey data afresh. We compiled a lot of data about congressional districts and related this to the survey data. My colleague Jie Chan and several of Ben’s students eventually joined us. Our first, somewhat preliminary, paper is now out as a working paper.

We agree completely with the studies that find racial resentment and gender considerations played substantial roles in the election outcome. We also concur that the political discussion and reception of the Affordable Care Act was heavily racialized — that really stands out when you study the survey data.

But we also find compelling evidence of the importance of economic issues. In the Republican primaries, for example, Trump’s support for import restrictions clearly distinguished him from the rest of the Republican field and helped gain him votes. The importance of feelings about the US being on the “wrong track” is also apparent. That likely reflects some economic considerations, though economics alone hardly exhausts its content.

When we analyze voting by congressional districts, especially changes in the presidential vote from 2012 to 2016, the importance of economic issues also stands out. Some of these factors are not obvious, unless you are familiar with recent studies of Brexit and German voting in the early 1930s, such as the importance of fiscal austerity in pushing voters to the right.

We find that economic considerations played a major role in the decisions of “switchers” — people who voted for Obama in 2012 but then voted for Trump; 2012 non-voters who came in from the cold to vote for the real-estate mogul; and last, 2012 Obama voters who didn’t vote in 2016. Limits on imports and, in the case of non-voters in 2012 who ended up casting ballots for Trump, beliefs that the government should take a more active role in sustaining peoples’ income both played a role.

We also find very direct evidence that the Clinton campaign’s relatively weak emphasis on policy as opposed to candidate qualifications cost it the votes of 2012 Obama voters. Many just did not perceive a meaningful difference between the major parties. Disappointment with the meager aid the Affordable Care Act actually provided individuals also appears to have influenced many of these dropouts.

We also discovered something else that has really interesting implications. In the earlier paper on money and the election that Paul Jorgensen, Jie Chen, and I wrote, we pointed out that in the final weeks of the campaign a wave of Republican spending on endangered Senate races dramatically turned many around, preserving Republican control of the Senate. The striking result was that for the first time in American history the party that won the Senate races also won the state’s presidential vote — with no exceptions.

Conventional election analysts barely noticed. If they did, they made nothing of it. But this led us to suggest that strong correlated efforts (often led by statewide parties) helped pull Trump across the finish line in some states where he was close.

 

PH

Wait a minute: you mean that the efforts by the Kochs and other interests cool to Trump who poured resources into Senate races to hedge against loss of the White House may have provided Trump with the racer’s edge?

 

TF

Yes, precisely: reverse coattails. And the survey evidence confirms this. Among both those who switched from Obama to Trump and those who finally decided not to vote, it appears Senate races had major effects. The probability of either voting for Trump or not voting for Clinton rose substantially in those states but not elsewhere.

We take this as evidence for the commanding role political money played in the election outcomes. In effect a dual wave of money (Trump also spent fairly lavishly toward the end, as we showed), floated the Republicans to victory in both spheres.

 

PH

Where does that leave all the claims that Russian interference handed the election to Trump?

 

TF

Unless you are prepared to argue that Vladimir Putin was in league with the Kochs and company to secure Mitch McConnell’s perch as leader of the Senate, and that they concentrated on states with Senate races, you need to think afresh about those claims.

We were clear that we had no pretensions to inside knowledge about things like Trump’s relations with the Deutsche Bank or what Roger Stone, Paul Manafort, or anyone else in his entourage may have said or not said to WikiLeaks, the Russians, or anyone else. For that, everyone will have to wait for the special prosecutor. We also said directly that we doubted that Facebook and other internet concerns had been forthcoming about all that they did and knew at the time and later. The various investigations have certainly confirmed that.

But nothing that has come out fundamentally changes the evidence that the mighty Wurlitzers of the Trump campaign and the domestic right-wing messaging infrastructure centered on Breitbart dwarfed Russian efforts. Russian efforts were not targeted with anything like the precision they should have been to be very effective, no matter how many people claim the opposite.

Russian or Russian-linked entities spent very little in key battleground states and, as we pointed out in our earlier paper, researchers who claimed the opposite relied on a poor statistical test. When you reanalyzed their data with a more appropriate test, their case evaporated. The Russians, for example, did foolish things like focusing tweets on states like West Virginia, which was a lock for Trump.

There’s more. Scholars have presented evidence that the Republican share of the vote in 2016 rose proportionately at least as high among people who used the internet the least. Past warning about empirical evidence on what would be required for high rates of belief change also remains relevant.

I think a new Harvard study probably has it exactly right when they observe the Russian efforts pale “in comparison to the directed efforts of the Trump campaign working with Facebook’s political marketing team.” No foreign operation can sow chaos like Steven Bannon and company. 2016’s madness was mostly made in America.

 

PH

So where does that leave America now?

 

TF

Not only the US political system, but the entire world economic order was already in the midst of wrenching change when Trump took over. He has basically heightened all these tensions, as though they were being refracted through a funhouse mirror. NATO, the world trading system, US-China relations, you name the issue. Not to mention discord and division within American society itself.

Within the United States, Trump and the GOP leadership, whatever their differences on trade and the international system, agree on recreating the pre–New Deal laissez-faire state typical of the First Gilded Age that institutionalized Social Darwinism and traditional male, white hierarchies.

The key issue right now is surely what will happen in the Democratic Party. The decisive issue for American life in the coming decades is what to do about the inability of most people to make a decent (“middle-class”) living and enjoy access to public services like education, day care, quality medical care, or secure retirements. Capitalist economies in developed countries are no longer providing these things. Full stop. Instead you have affluent people talking up Universal Basic Income as they push the idea of cutting Social Security and “entitlements”: anything that promises to lower taxes on the 1 percent.

Early post-election injunctions to “resist” bypassed the crucial question of what kinds of alternatives the party will offer. Together with the emphasis on Russia, it almost completely displaced any effort to assimilate the lessons of the Sanders campaign.

As Jorgensen, Chen, and I showed in our paper, Sanders’s campaign was truly sui generis: it was actually dominated by small donors. This afforded the Vermont senator the flexibility to address critical issues that other Democrats chasing big money could not afford to pick up, such as Medicare for All, the disastrous effects of political money, the economy’s inability to deliver decent wages for most Americans anymore, the right to unionize, and the state’s withdrawal from providing vital public goods like education. Not to mention the persisting problem of imperial over-extension that the Clinton campaign was oblivious to.

Watching the existing Democratic Party leadership react to the rising talk of democratic socialism is instructive. It is plainly trying to find ways to tap the bourgeoning energy for purposes of increasing electoral turnout, while playing with the movement’s issues like a cat with a ball of yarn.

The hollowness of a much-touted Democratic reform proposal — that candidates should solemnly pledge to refuse corporate PAC money — is patent. It is a sham, purely and simply. They know very well that big ticket donations from the 1 percent will still roll in, in several forms. A close eye will also see unmistakable signs that much of the brave talk of regulating Silicon Valley is coming from politicians with strong ties to there. Exceptions are Elizabeth Warren on financial regulation (though I think some of her proposals need tweaks), and of course Sanders’s efforts to squeeze living wages out of major US corporations.

For Democrats to offer real solutions, the party has to break its dependency on big money. Until it does I expect that turmoil within the party will run rampant. The ever-deepening spread of the dual economy continues to squeeze more and more Americans, of all races, colors, and genders. If the Democrats are not to go the way of the social-democratic parties of continental Europe, they need to squarely address this question and offer real solutions.

I’d also venture the Republican Party is never going back to where it was before Trump, even if the establishment succeeded in putting Pence in his place. In politics, the “New Abnormal” is, alas, the new “Normal.”

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