By Thomas B. Edsall, The New York Times, September 18, 2019
Money is the mother’s milk of politics, as the old saying goes, and the slow-motion realignment of our two major political parties has changed who raises more money from the rich and who raises more from small donors.
A pair of major developments give us a hint about how future trends will develop on the partisan battleground.
First: Heading into the 2020 election, President Trump is on track to far surpass President Barack Obama’s record in collecting small-donor contributions — those under $200 — lending weight to his claim of populist legitimacy.
Second: Democratic candidates and their party committees are making inroads in gathering contributions from the wealthiest of the wealthy, the Forbes 400, a once-solid Republican constituency. Democrats are also pulling ahead in contributions from highly educated professionals — doctors, lawyers, tech executives, software engineers, architects, scientists, teachers and so on.
These knowledge class donors, deeply hostile to Trump, propelled the fund-raising success of Democratic House candidates in 2018 — $1 billion to the Republicans’ $661 million.
While there are advantages for Democrats in gaining support from previously Republican-leaning donors, this success carries costs. In winning over the high-tech industry, the party has acquired a constituency at odds with competing Democratic interest groups, especially organized labor and consumer protection proponents. Picking up rich backers also reinforces the image of a party dominated by elites.
In their paper, “Increasing Inequality in Wealth and the Political Expenditures of Billionaires,” Adam Bonica and Howard Rosenthal, political scientists at Stanford and N.Y.U., track the partisan contribution patterns of the Forbes 400 from the 1981-82 election cycle through the 2011-12 cycle.
For that three-decade period, the level of giving to Republicans and Republican Party committees by members of the Forbes 400 followed a steady downward trajectory, falling from 68 percent to 59 percent.
This downward trajectory coincided with the steady transformation of the sources of wealth for those on the Forbes list. In 1982, when the list was first published, solidly Republican manufacturers and energy producers dominated — 89 of the 400 richest Americans having made their fortunes in oil.
By 2018, 59 of the Forbes 400 had made their fortunes in technology, including six of the top ten: Jeff Bezos, No. 1; Bill Gates No. 2; Mark Zuckerberg, No. 4; Larry Ellison, No. 5; Larry Page, number 6; and Sergey Brin number 9. Eighty-eight more made their money in the financial sector. In contrast to the 1982 Forbes list, only 14 on the 2018 list made their money in manufacturing and 24 in energy.
“The 400 have trended steadily to the left,” conclude Bonica and Rosenthal.
The two authors write that from 1989 to 2017, members of the Forbes 400 have fared much better under Democratic presidents than Republican presidents: The 400 “did very well under the two Democrats, Clinton and Obama. They did not do well under either Bush.”
Bonica and Rosenthal’s analysis may prove troubling for those seeking to slow or reverse increasing wealth and income inequality. As the Forbes 400 moves toward the Democratic Party, they write, “Inequality in campaign contributions in the American plutocracy has grown hand in hand with the growth in economic inequality.”
They go on to raise another basic question: Does increased support for Democrats among the affluent and the rich undermine efforts to stem the growth of inequality?
The historic rise in inequality in recent decades has not ushered in an era of Republican fund-raising dominance. On the contrary, Democrats have made substantial gains against Republicans in recent decades while inequality was on the rise.
In a separate essay, published on the Scholars’ Strategy Network, which discusses the implications of their work, Bonica and Rosenthal wrote:
The superrich control resources that parties and politicians require and, as a result, are courted. Politicians have incentives to pay attention to the policy concerns that animate wealthy donors on left and right alike — and this dynamic influences public discussion and policymaking.
The continued concentration of money at the top, they write, translates into more political power:
"The ideas, values, and preferences of wealthy donors distort the focus of U.S. democracy more than individuals’ desires to grow their already vast fortunes. Rather than worry about individual corruption, citizens and leaders should worry about the many ways money in politics can amplify the voices of the privileged few over those of the majority. As wealth concentration grows, so will uneven political influence."
Bonica has turned tracking campaign contributions by wealth and occupation into a specialty.
He provided The Times with data extending from 1980 to 2016 covering the contribution patterns of donors who gave the largest amount of money in each election cycle. (Roughly a quarter of Bonica’s list overlaps with the Forbes 400 list.)
In the 1979-80 presidential election cycle, 71 percent of the top 400 donors gave to Republicans and to right-of-center political action committees, while 29 percent gave to Democrats and left-of-center PACS, a 42-point difference. In the 2015-16 presidential cycle, 54 percent gave to Republicans and right-leaning PACs, and 46 percent gave to Democrats, an 8-point difference.
In the case of contribution patterns of those in different occupations, Bonica emailed in response to my inquiry:
"The medical profession has perhaps experienced the largest generational realignment. Physicians who graduated medical school before the 1990s tend to favor Republicans, but younger cohorts have trended sharply to the left.
Bonica’s data shows that doctors who graduated in the 30 years from 1960 to 1990 consistently gave more to Republicans than to Democrats, generally in the 54-55 percent range."
Starting with those graduating in 1990, however, the share of contributions going to Republicans began to decline, dropping below 50 percent for those graduating in 1996 and falling to the low 30s for the youngest cohort.
As further evidence of this trend, Bonica cited a 2017 survey of 1,660 medical students published in the journal Academic Medicine. The survey reported that 89.1 percent said they supported Obamacare. In the survey, 77.7 identified themselves as liberal, 12.2 percent moderate and 7.2 percent conservative.
Bonica’s study of lawyers, conducted with Maya Sen, a political scientist at Harvard, also demonstrates a strong pro-Democratic trend in campaign contributions, although attorneys have leaned Democratic for decades.
On an ideological scale — with plus numbers indicating right-of-center and minus numbers indicating left-of-center — Bonica found that lawyers who graduated from nonelite schools shifted from roughly evenly split between left and right in the 1950s to minus .6, or liberal, by 2012. Lawyers from elite schools (Harvard, Stanford, Yale, etc.) were liberal-leaning in the 1950s (minus .25) and became rock-solid liberals by the current decade (minus .9).
Three different scholars — David E. Broockman and Neil Malhotra, professors at Stanford’s Graduate School of Business, and Gregory Ferenstein, an independent journalist who writes about Silicon Valley — have a different take. Their paper, “Predispositions and the Political Behavior of American Economic Elites: Evidence from Technology Entrepreneurs,” explores some of the political consequences of the ascendance of high-tech.
Technology entrepreneurs, despite their Democratic leanings, are ambivalent on key elements of the Democratic agenda, according to Broockman and his co-authors. They are reliably orthodox liberals on some issues, not so reliable on others.
On matters of globalization, trade, and immigration, this Silicon Valley constituency is firmly pro-globalization. Eighty-seven percent support free trade agreements and 56 percent are “in favor of increasing levels of immigration,” which is “15 points higher than Democratic” rank and file, the paper says.
On social issues, the authors found that “technology entrepreneurs are again very liberal,” including near-universal (96 percent) support of same-sex marriage, 82 percent support of gun control and 67 percent opposition to the death penalty.
Perhaps most significant and most surprising, surveys of high tech executives conducted by Broockman and colleagues show that tech entrepreneurs “strongly support redistribution and taxation.” For example, Broockman et al. continue, “nearly all technology entrepreneurs support increasing taxes on those making over $250,000 or $1,000,000 per year (with 76 and 83 percent expressing some support for each, respectively).” Seventy-five percent support programs specifically targeted toward the poor, including 59 percent in support of increased spending for the poor. Some 82 percent indicated “support for universal health care even if it means raising taxes.”
While high tech executives share the views of liberal elites generally on the issues described above, there are significant areas of conflict.
“Technology entrepreneurs do not share conventional Democratic views on the regulation of product and labor markets,” the authors write. “Technology entrepreneurs are indeed more conservative even than Republican citizens and most similar to Republican donors.”
On specific issues, almost all (82 percent) tech executives believe that it is too difficult to fire workers and that the government should make it easier to do so. However, majorities of Democratic donors and citizens believe the government should make it harder to fire workers (a 50 percentage point difference from technology entrepreneurs).
In the case of organized labor, three quarters (74 percent) of tech executives “say they would like to see labor unions’ influence decrease, versus only 18 percent of Democratic donors and 33 percent of Democratic citizens.”
In their conclusion, the three authors address how the growing influence of the tech industry in Democratic politics will affect the party’s approach to social spending and the reduction of inequality.
On one hand, they write, “technology entrepreneurs seem poised to support Democratic candidates — and therefore redistributive policies that should reduce inequality — financially.”
On the other, they point out that these entrepreneurs generally stand opposed to many government interventions in markets — such as government support for labor unions, worker protections, and consumer protections — that have long been central to the Democratic Party’s ideological answer to inequality and supported by traditional Democratic constituencies.
The result, they suggest, is that as Democratic elected officials receive increasing financial support from technology entrepreneurs and attempt to court further support from them” intraparty conflicts over “regulating product and labor markets may take center stage.
Altogether, the developments at the high-end of campaign finance are a mixed bag for the Democratic Party, expanding the sources of political money while simultaneously risking internal divisions.
More worrisome for the Democratic Party and its candidates is Donald Trump’s exceptional success in raising campaign money in small dollar amounts, which suggests that his racial and anti-immigrant rhetoric continues to motivate supporters.
Federal Election Commission data on Barack Obama’s 2012 campaign and Hillary Clinton’s 2016 bid, along with an analysis of Trump’s fund-raising in the 2020 campaign by the Center for Responsive Politics, shows the following.
By the end of his re-election campaign, Obama raised a total of $549.4 million, of which $234.4 million, or 42.7 percent, came in contributions of less than $200.
By the end of her 2016 campaign, Clinton raised a total of $405.7 million, of which $105.6 million, or 26.0 percent, came in low dollar amount,
By the end of June 2019, at a much earlier stage in his campaign, Trump had raised a total of $124.8 million, of which $87.3 million, or 70.0 percent, is made up of donations under $200.
Brian Schaffner, a political scientist at Tufts, wrote in an email that “Trump’s appeal is more to ideologues and emotional Republican contributors rather than to strategic and traditional Republican large-dollar donors.”
He argues that the fact that Trump raises such a large share from small-dollar donors is due less to Trump’s improvement among small donors than it is to the difficulty he has raising money from large donors. This is really a story about how the traditional large donors in the Republican Party didn’t want to give to Trump in 2016 and even so far in 2020 they continue to be reluctant to contribute to him.
Raymond J. La Raja, a political scientist at the University of Massachusetts-Amherst, also emailed me:
"It is not too surprising that Trump has outpaced others, even Obama, in raising money from small donors."
Individual donors — big and small — tend to be much more polarized compared to the rest of the electorate. They give because of strong ideological preferences and passions. People like Trump ignite those passions.
Bonica notes that “there is a strong association between ideological extremity and total funds raised from small donors at the presidential level.” Bonica’s calculations of the ideological positioning of the candidates shows that Trump is “the most extreme conservative,” while Bernie Sanders, who “raised 58 percent of his campaign dollars from small donors” in 2016, stands out as the most liberal candidate, “which might mirror what we see in Trump from the left.”
Trump’s success in raising small-dollar contributions is not necessarily a harbinger of his prospects in November 2020. It does, however, raise a question about the contemporary role of the two major political parties.
Traditionally, one of the core strengths of the Democratic Party has been that voters trust it more than the Republican Party to protect and advance the interests of the middle class. In recent years, however, that advantage has been eroding.
The NBC/WSJ poll has repeatedly asked voters “which party do you think would do a better job looking out for the middle class?”
In the 1990s, an average of eight polls showed the Democrats with a 22.25 point advantage, 43.0 to 21.75. The question was dropped only to be resumed in December 2011. From 2011 to September 2014, the Democratic advantage fell to 19.5 points, 44.0 to 24.5.
Since then, in six surveys conducted from June 2015 to October 2018 — the Trump era — the Democratic advantage continued to erode to 13.1 points, 41.3 to 28.2. In the two most recent surveys, the Democratic advantage fell to 10 points, 41 to 31, less than half of what it was in the 1990s.
The Democrats may or may not regain the presidency in 2020, but they could well lose their invaluable credential as the party of the middle class.
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