Wayne O'Leary

The Donors

Developments in Campaign 2024 added immeasurably to the perception that the first decades of the 21st century are America’s Second Gilded Age, rivalling the late 19th century. Foremost of these was a continued acceleration in the obscene level of political fundraising that has paved the way for special interests to control and direct our system of government.

Shortly before Election Day, campaign contributions to the two major parties were on track to eclipse all previous records, something that now occurs with regularity every election cycle since the Supreme Court decisions in Citizens United v. Federal Election Commission (2010) and McCutcheon v. Federal Election Commission (2014) opened the floodgates to limitless individual and corporate political fund-raising. According to OpenSecrets.org, total spending during the 2024 federal election cycle will approximate $16 billion, or $1 billion more than four years ago, with $5 billion contributed by “dark-money” groups, largely super PACs.

What’s more important is where the money originates. The investigative website Democracy Matters has determined that in 2020, business outraised labor by a ratio of roughly 25 to one. There’s nothing new in that; corporations have dominated political contributions ever since big money became the salient feature of U.S. elections during the original Gilded Age, starting in the late 1880s.

The father of the system was Ohio political boss and Republican National Chairman Mark Hanna (1837-1904), who effectively purchased the 1896 presidential election for fellow Ohioan William McKinley and thereby stopped the populist crusade of Democrat William Jennings Bryan dead in its tracks. Hanna’s philosophy was summed up in a famous quote: “There are two things that are important in politics. The first is money, and I can’t remember the second.”

Hanna collected (officially) $3.5 million from the reigning robber barons of industry, a process he called “frying the fat.” Historians consider the real total to be closer to $10-$16 million, sufficient to bury the opposition in a mass of advertising, torchlight parades, and armies of poll workers. That, as Matthew Josephson relates in his classic study “The Politicos, 1865-1896” (1938), set the pattern for America’s political future; we’re still living with its features 130 years later.

Some things have changed, however. In Hanna’s time and the decades immediately following, the party monetary balance was uneven; capitalism’s corporate largesse went overwhelmingly to protectionist Republicans. Of necessity, Democrats increasingly depended on organized labor and intraparty fundraising. In the 1936 campaign, FDR’s Democrats, who were outspent nearly two-to-one, relied heavily on unions (especially John L. Lewis’ United Mine Workers) and collections at Jefferson-Jackson Day dinners masterfully organized by Roosevelt’s campaign manager James A. Farley. Meanwhile, the GOP had bankers, industrial magnates, retail executives and investment houses; it was no contest moneywise.

The image of a cash-strapped Democratic Party competing, hat in hand, with an oligarchic GOP underwent a major transformation in the 1980s and after due to the ascension of a new generation of leaders (President Bill Clinton and Congressman Tony Coelho, head of the Democratic Congressional Campaign Committee, in particular) no longer averse to doing corporate America’s bidding in exchange for cash on the barrelhead. By the 1990s, the once-destitute Democrats were on a par with the Republicans in corporate contributions and on the road to becoming the party of business.

The immediate payoffs to corporate America were the North American Free Trade Agreement (NAFTA), the establishment of the World Trade Organization (WTO), permanent normal trade relations (pntr) with China, and, domestically, the deregulation of banking and financial investment demanded by Wall Street as a monetary quid pro quo.

Following in the wake of the Clinton era came Barack Obama, considered by many Democrats a liberal icon, a heroic combination of FDR and JFK in the party’s eternal struggle against market forces. Sadly, that hat doesn’t fit. In office, Obama continued down the neoliberal path blazed by the Clintonites.

As former Labor Secretary Robert Reich retrospectively characterized his two terms (“Saving Capitalism,” 2015), Obama “presided over one of the most pro-business administrations in American history,” pouring billions into Wall Street to bail out its investment banks during the Great Recession, then enacting a healthcare law (the ACA) that enriched insurance and pharmaceutical companies. In the process, the stock market boomed, and corporate profits reached record levels, while Obama’s Treasury officials saw to it that investment bankers faced few conditions on their bailout money, no new taxes on their trades, and no criminal prosecutions for their mismanagement.

Thus was Wall Street’s 2008 political investment in Democratic candidate Obama ($16.6 million to his campaign versus $9.3 million for Republican John McCain) repaid. Meanwhile, by the 2012 election cycle, labor’s historic role in Democratic campaign funding was being phased out in favor of business and the rich; the wealthiest 0.01% of U.S. households, the corporate investor class, gave the party’s candidates four times what organized labor provided them that year.

Fast forward to the 2024 election. Whereas, according to OpenSecrets.org, the Trump campaign was largely bankrolled by a grab bag of individual right-wing billionaires (Timothy Mellon, Elon Musk, Miriam Adelson, et al.), the Harris campaign, as befits the Democratic Party’s growing status as the party of corporate America, was considerably funded (indirectly through company PACs, shareholders, etc.) by the business establishment, especially technology and healthcare firms. By late summer, five out of its six largest institutional contributors (to the tune of a combined $15 million) were in high-tech, including Silicon Valley’s “big five”: Alphabet, Microsoft, Amazon, Apple and Meta.

Enter the super PACs with their limitless dark-money contributions. As of late October, the biggest of them, Future Forward, representing megadonors from Silicon Valley, had committed $700 million to the Harris campaign. This was obviously Big Tech’s presidential campaign to win or lose, along with Wall Street. Said Roger Hochschild, former CEO of Discover Financial Services, regarding the Street’s pre-election influence on the Harris economic agenda, “The campaign is definitely giving large corporations a seat at the table and giving them a voice.”

Corporate America’s organized donors, both the Silicon Valley and Wall Street branches, expected certain things for their money. They already had one scalp, Joe Biden’s. Next would be securing a Harris promise to remove both avid regulator Gary Gensler as Securities and Exchange Commission (SEC) chair and energetic trust buster Lina Khan as Federal Trade Commission (FTC) chair. Had she been elected, corporate Democrat and tech advocate Kamala Harris might well have complied.

New Dealers like the Roosevelt Justice Department’s crusading anti-monopolist Thurman Arnold must be spinning in their graves.

Wayne O’Leary is a writer in Orono, Maine, specializing in political economy. He holds a doctorate in American history and is the author of two prizewinning books.

From The Progressive Populist, December 1, 2024

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