Tuesday, November 26, 2019

The run-the-richer-guy strategy


... because sometimes it works.

Michael Bloomberg officially has entered the race for the Democratic presidential nomination.  Bloomberg is a former New York mayor, an ex-Republican and a technology, media and financial mogul whose net worth has been estimated to be somewhere north of $50 billion.

That last, interesting fact apparently is causing heartburn in the already-crowded Democratic primary field.  A CNN daily newsletter to which I subscribe noted,
The media billionaire has already bought $37 million worth of campaign ads over the next two weeks, which has led Elizabeth Warren and other Democratic candidates to accuse him of trying to "buy the nomination." 
Being rich is not a bad strategy for getting elected.  As of a few years ago, the average net worth for members of Congress was nearly $500K, with the top 50 members averaging $7.5 million.

Illinois recently provided two powerful examples of the advantages of being a wealthy candidate.  As I noted back in the spring of 2018, Illinois' incumbent governor at that time was Bruce Rauner, a mergers-and-acquisitions wizard whose personal fortune essentially allowed him to spend his way to the governor's mansion in 2014.  So in 2018, Illinois Democrats countered by running JB Pritzker, whose wealth dwarfs even Rauner's pile.  Pritzker won comfortably.

What about the race for president?  Donald Trump's wealth is a matter of speculation; he claims to be a billionaire several times over, but that's open to question.  Various news organizations in recent years have estimated his fortune to be between $1 billion and $4 billion.  Trump himself has claimed that his worth is as high as $9 billion.  Those who have tried to estimate his wealth consider that figure to be characteristic Trumpian bluster and exaggeration.    But even Trump's most audacious overstatement would leave his wealth at only a small fraction of Bloomberg's.

Bloomberg isn't the only rich contestant; Tom Steyer also is a billionaire.  For that matter, Elizabeth Warren, Joe Biden and Bernie Sanders are millionaires.  Pete Buttigieg seems to be the closest to Mr. Smith, with a net worth of $100,000.   But Bloomberg could buy out all of his primary opponents 25 times and still have a few billions left over.

Bernie Sanders nearly won the Democratic nomination in 2016 by eschewing large donations and building a network of small donors.  Animosity toward the wealthy is a staple of Democratic populism.  It will be interesting to see how excited Democrats are about the prospect of having as their standard bearer one of the richest men in the world.

17 comments:

  1. Replies
    1. Jim, thanks. I corrected it.

      (I used to think I was a good speller. I've learned as an adult that I'm not so hot. I also get tripped up by "-ent" and "-ant" at the ends of words.)

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  2. Of course, Bloomberg and Steyer are my least favorite candidates. I don't even think they should exist. As billionaires, that is. But, yes, I will vote for them over the Creature from the Black Lagoon. But no oligarchs preferred.
    I don't think a million dollars is a lot of money anymore. Winning a million would not provide security for life. Millionaires are not wealthy.

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    1. "Millionaires are not wealthy." LOL, they are from my point of view!

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  3. Even before he officially declared, Bloomberg was pouring a massive amount of money into an online anti-Trump campaign. He may feel that his candidacy puts him in the best position to work against Trump.
    Personally, I'm kind of neutral about him at this point. If he ends up being the Dem candidate, yes I'll vote for him. I'm still working on the book he co-authored on solutions to climate change. He has some good ideas there.

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  4. The New Yorkers I know are not enthused about Bloomberg's throwing millions into the Democratic nominating lottery. Of course, everyone has their own view of why it is a bad idea, apart from all that money outspending the other candidates.

    To date, the best argument I've heard against Bloomberg being nominated is that he will put off people who might actually vote for the Democrat. First, many Democrats won't vote for him because he's rich, or because he came late to the party, or because they wanted someone else who has worked hard to stay in the race.

    Second, there are the voters who call themselves Independents, who won't vote for him for all those reasons plus: he's a New Yorker (though he comes from Boston), because he's Jewish, he's arrogant (and he is).

    Third, there are Republicans who might vote for a Democrat, but who won't vote for him because if you're going to have a rich, arrogant New Yorker for president, you might as well stick with the one you have.

    Seriously: I don't think Bloomberg will get the nomination, and if he did, he won't beat Trump (if he's the Republican).
    But if Bloomberg won, he would be the kind of president who could clean up many of Trump's messes while also keeping the country on an even keel and repairing our shambolic foreign policy.

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    1. Trump is no longer a rich, arrogant New Yorker. He says he is a rich, arrogant Floridian, where he doesn't have to file state tax returns that can be subpoened. (He is due to land any minute now.) I understand your state's tax collector is saying it isn't as easy as Trump thinks to become a former New Yorker.

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    2. Right, it won't be easy. There's that apartment on Fifth Avenue with the Ak-47 on the terrace. As you know, we could shoot anyone on Fifth Avenue and get away with it. And the high-end market in NYC is in the doldrums; he'd have to sell for a pittance!

      And then...the state income tax. That will be hard for Albany to give up, especially if, as suspected, he hasn't been paying it, or at least hasn't been paying his share.

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  5. Steyer didn't offend Trump as much as I thought he should have. Maybe Trump doesn't know what Steyer is worth. Bloomberg, though, should be pure oil upon the fires of the Trump's ego. He has already taken a few shots, but if Bloomberg starts buying time of Fox, say during Fox & Friends, it could cause a monumental meltdown. The rich guy thing is not so much a strategy as "I can, so why don't I?"thoughts leading to action. Wealth doesn't seem to be much of a predictor of how a person will perform as president.

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    1. Tom - the experience with Trump, as well as Rauner in Illinois, is that rich guys struggle to be political chief executives. A business chief executive is much more of an emperor-of-all-I-survey than a president or governor who has to deal with checks and limits on his power.

      Pritzker in Illinois, another business veteran/political rookie, has been having success so far in getting his programs passed - but he has a virtually veto-proof legislature to do his will. Scott Walker in Wisconsin looked like a political genius when Republicans controlled both houses there.

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    2. Trump has certainly internalized the "emperor of all I survey" philosophy. "I don't need no stinking checks and balances!"

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    3. We've had some good rich presidents who never had to work for it. FDR comes to mind. And we have had bad presidents with incredibly impressive executive experience. Herbert Hoover comes to mind. But now we have one with incredibly bad executive experience. Six bankruptcies come to mind. And whether he is rich remains a question until his tax records are released (and looked at by real auditors).
      After all, it is possible to be a billionaire if you have a billion dollars in assets, although Trump's assets, being mainly real estate and "intangibles," are valued by that old rating firm, Whim & Caprice. But are you still a billionaire if you also owe a billion-five? We don't know.

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    4. Deutsch Bank calculated his net worth at around $700 million in 2004. Apparently he now claims that his name is worth about $5billion - the value of his brand. Other records indicate that his valuations are dramatically lower when reported to tax authorities than the numbers he reports when trying to
      get loans from someone.

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  6. Musk and Branson are the best examples of what a billionaire can be. I doubt they are anything approximating a saint. They are probably batcrap crazy to some degree and legends in their own minds. But they want to do cool stuff. It's not about the money or being the richest guy. Also, they don't want to be heads of state. Can't say I hate all rich people.

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    1. I admire some of the things Bill and Melinda Gates are doing. And Warren Buffet's kids are doing some useful things, they don't seem as entitled as some whose parents made a lot of money.

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    2. Stanley, here is a neat project of a Tesla subsidiary: https://scoop.upworthy.com/ngo-installs-first-solar-power-plant-converts-salt-water-drinking-kenya

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