Follow the Money Trail

As the military action in Gaza escalates, Obama continues to keep his “deafening silence” (Guardian, 4 January 2009). This oblivion, when juxtaposed with the loud and clear statements he made on the Mumbai terrorist attacks, rendered his explanation of he “would not intervene in the delicate negotiations carried out by the outgoing administration” a blatant excuse.

This confirms the author’s earlier commentary (Lianhe Zaobao, 30 December 2008) that the widely propagated Obama-style Islamic policy could not act against the reality of the American domestic scenes, especially that of the bastion of mega political donators – the Jews.

No doubt that Obama has made history as the first half-black U.S. president, but, more importantly, he will see the biggest swell in the power of the White House since President Roosevelt’s New Deal. Under the threat of the current economic crisis moving towards a Great Depression, Keynesian beliefs make a sounding return. With various market bail-outs, automotive industry rescue packages and other major spending programs in force, the degree of economic intervention by the American government will reach an unprecedented height.

Advantage in Fund-Raising Gave Obama the Winning Edge

Based on a Wall Street Journal commentary on 5 January 2009, the cost of Obama’s economic stimulus package is just second to the total spending on the World War II. His social reform program, especially those pertaining to health care insurance and public education, involves gigantic expenditure and an extension of governmental authority. Therefore, the author has, time and again, predicted that Obama’s attention will be largely on domestic affairs. In Cultural Revolution lingo, domestic affairs are the “titles” while foreign affairs are the “subtitles” under the Obama administration.

How should we analyze and project the stance of Obama administration’s domestic policy then?

What came to mind was a phrase coined by Mr. W. Mark Felt, the former assistant director of the F.B.I, who passed away just before the New Year at 95-–follow the money trail. As the “Deep Throat” for the Washington Post, he urged the two reporters who were covering the Watergate case closely to “follow the money trail."

Follow the money trail indeed and you could throw light on the penchant of the new master of the White House towards domestic policies, especially on his new new deals, which involve astronomical fiscal pay-out and tax cut.

According to a post-election article in the Wall Street Journal by a former political adviser to President Bush, Karl Rove, the victory of Obama obeys the axiom of “follow the money trail." That is, Obama managed to defeat McCain mainly because the former was able to outspend the latter by the biggest margin in history, or $250 million, to be exact. In some of the key states where Obama stole a win from the Republican, his campaign was 1.5 to 7 times more than McCain’s.

McCain shot himself in the foot, to a certain extent, by abiding faithfully to the cap set by Campaign Finance Law which he advocated. On the other hand, Obama broke his promise and accepted huge donations from private individuals resulting in an absolute funding advantage. This was a repeat of the nomination race between Obama and Hillary. Obama sealed his victory over Hillary as he overtook her in fundraising at the latter stage. Up till today, Hillary is still repaying her debt incurred during the race.

Money is Part of the Democratic Game

The reality remains: money is an integral part of the democratic system. Karl Rove declared that the 2008 Presidential Election marked the end of public funding for a campaign system that McCain has relentlessly pushed for. Campaign funds are gaining in importance as the lifeline of political parties and politicians.

Just take some examples from the Obama camp. The New Mexico governor, Richardson, withdrew from his bid for commerce secretary as he allegedly approved infrastructure projects in exchange for political donations. On 4 Jan 2009, the New York Times covered the story of a developer who donated $100, 000 to the Clinton Foundation after Senator Hillary helped to secure millions of federal assistance for his project.

Even for Blagojevich, the Illinois Governor who tried to put Obama’s Senate post on sales, political donations are what he is after in return.

In such a commercialized world, political donations follow the laws of Economics. Hardly is there any donor who would fund politicians or policies that would hurt his/her interest. This is especially so for mega-donors such as those on Wall Street.

One of the bright spots of the American politics is openness, the end-result of hundreds of years of efforts made in the areas of transparency, public participation and jury independence. And this openness has kept the power of money in politics in check. However, there exists ample room, within the rules of the game, for the aforementioned "power-for-money" transactions and “pay to play” practices.

While Richardson has given up his nomination as commerce secretary, he remains a governor. Hillary is likely to be appointed as the secretary of state even with her alleged involvement in the Clinton Foundation’s donation saga. Even the infamous Blagojevich is still keeping his post as the Illinois Governor.

More Money to Trail

Another manifestation lies in the expansion of federal spending and degree of economic intervention that have created proportionally more opportunities for the ruling party to carry out "power for donation" within the rules of the game. It is no coincidence that the Democrats gained a political edge for half a century as a result of President Roosevelt’s New Deal. Similarly, Obama’s more ambitious “New New Deal” is going to give the Democrats a good chance to "pay to play."

While Obama flies the “post-party” flag, his election victory, a bid for second term and policy could not be achieved without the resources of the Democrats machine. Hence, his astronomical economic stimulus plan and social reform programs will not go against the mission to expand Democrat finances.

For example, the automotive labor unions have given almost 100% of their donation to the Democrats. This delineates the attitudes of the Democrats and the Republicans towards the Big Three. The Republican Congressmen know very well that a good part of the billions of dollars from the rescue package would end up in the donation box of the Democrats.

Having recognized this, the Congress Republicans have put up an increasingly stronger resistance to Obama’s economic stimulus plans.

From the author’s point of view, the new administration will spread its “goodies” from the lower class to the middle class when implementing its policy in order to develop new sources of funding for the Democrats. And the health care insurance reform will be a key constituent of this strategy.

More insights into Obama’s other domestic programs could be gained by applying the “follow the money trail” principles.

The author is a researcher in North America