Tom Ferguson: Financial Regulation? Don’t Get Your Hopes Up

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It has come to our attention that an article by Tom Ferguson, the political scientist who is generally recognized as the expert on the role of money in American politics, had an article posted on TPM’s website on April 17, 2008, which appears to have been removed from the site.

You can find it via a wayback machine (hat tip Ed Harrison for tracking it down) but not at TPM or via Google. We are reposting it to make it more accessible. It is rather curious that TPM decided to remove the article now, while a presidential campaign is on, when Ferguson’s piece demonstrates that predictive social science is possible after all.

This is the header of the piece:

And the text, which you’ll see was a good call:

Kevin Phillips once gain does us all a service with his sharp and wonderfully lucid discussion of finance and politics. Since we can take it for granted now that neither the Democrats nor the Republicans are going to attempt any reforms of the US financial system this year, the task is going to fall to the next President to propose something. I wish I could find real grounds for optimism, but that’s not easy.

Here is a table that I’ve prepared for a short presentation at an academic conference. It is an analysis of “early money” (defined as that contributed before any voting took place) in the current presidential election. It covers the usual universe of large firms and investors that I typically investigate every four years.[If you are interested in details, just see my Golden Rule (Chicago, University of Chicago Press, 1995).]

I think it pretty much speaks for itself. Both Obama and Clinton are heavily supported by financiers; I include Chris Dodd, whose candidacy was not on the same level, since he remains head of the Senate Finance Committee. Note that the candidate most heavily supported by finance in the Republican race, John McCain, also won that one.

I would caution against over-interpreting these results. Broadcasting, defense, pharmaceuticals, and other sectors all weighed in. But the particular importance of finance to the Democrats is hard to miss and I am sure will also show up when subsequent contributions get inventoried. Kevin Phillips’ analysis, I think, is likely to remain timely.

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  1. Middle Seaman

    Of course top candidates are supported by financiers. As Willie Sutton implied: this is where the money is. The issue is whether the candidate once elected works for us or Wall Street. Obama is Wall Street’s ambassador to us.

    1. LadyLiberty

      You don’t have to flashback it’s still happening today

      JPMorgan Employees Join Goldman Sachs Among Top Obama Donors
      By Jonathan D. Salant – Mar 20, 2012 11:01 PM CT

      Major recipient of private equity donations – Barack Obama

      What fun Democrats must be having, watching Republican presidential candidates treat the private equity industry like a piñata.

      Should Mitt Romney, the one-time CEO of Bain Capital, emerge as his party’s presidential candidate in the fall, he will represent, according to David Axelrod, President Obama’s campaign strategist, “everything that people hate about this economy.”

      Huh. The biggest beneficiary of campaign contributions from private equity donors last year was – President Obama. Of the $17 million the sector poured into campaigns, from 2007 to 2011, Obama received close to $2 million, according to numbers compiled by MapLight, the Berkeley nonpartisan research organization that publishes data on campaign contributions and their links to issues before Congress.

      Out of the $20 million in contributions to congressional lawmakers from 2001 to 2011, the six biggest recipients were Democrats, headed by Secretary of State Hillary Rodham Clinton, touted in recent days as Obama’s running mate in November.


  2. Conscience of a Conservative

    Salient point. Obama’s actions have been heavily guided by campaign contributions. Case in point, his recent evolution on gay marriage, which was done , not so much based on potential election results on the issue, but with an eye toward raising money from Gay and Lesbian groups, which until now were not specifically targeted.

  3. PaulArt

    I am not surprised that Josh Marshall is playing for Team Obama – he is another one of those geniuses who thinks that his readership will not notice these things and that he can have it both ways. Pompous twit hardly even begins to describe him.

    1. wendy davis

      LOL! The Pompous Twit closed down the readers’ blog, TPM Cafe when some us were a bit too full-throated denouncing Obama and elitist Dems.

      I just dug out a discussion at My.Firedoglake (where I finally landed) about about it all, and the conventional wisdom that JMJ claimed: it was too expensive to run.

      Right, Josh. It was about getting gigs on MSNBC with the rest of O’s beatifiers.

  4. Ned Ludd

    It’s not just political candidates that are corrupted by money. Marc Andreessen, whose venture capital firm manages more than $2.7 billion, personally led a round of financing for TPM Media back in 2009.

    When asked about this, Marshall declined to discuss the amount of the round or details about the round; he also wouldn’t divulge the names of the other angel investors. However, he did tell paidContent that the proceeds will largely go towards doubling the size of the of 8-member editorial staff.

    The round was considred small as far as venture capital investments go – “between $500k and $1 million” according to TechCrunch. At the time, though, the reporters at TPM made between $24,000 and $40,000, so that investment allowed a significant expansion of TPM’s staff.

    1. JTFaraday

      The little hitch to this kind of business plan in the liberal/ left-leaning blogosphere is that they may get some money, but they lose their readership. Despite the fact that there is still a good-sized Obama cult out there, the readership of TPM like the once respectable American Prospect (and probably some others), has plummeted through the floor since 2008.

      Meanwhile, they may move toward the so-called “center” economically, but the imperious culture warrioring that is a fundamental part of the psychological makeup of the people they tend to hire is of such a deprecatory nature that no one in “the center” can tolerate it for very long.

  5. David Dimon Gregory

    Pretty much supports the conclusion the entire political process is bought and sold. There’s not a chance of reform either, no one discusses it. The press occassionally documents the amount of money, but there’s never serious talk of changing anything.

  6. Tom Crowl

    This can and will change when the political micro-transaction becomes part of your life.

    When you and 150 million other voters start getting emails every week saying “click here to support our bill to revive Glass-Steagall and contribute 25 cents to our lobbying effort!”…

    The nature of the debate will change… and the balance of power will shift.

    Its math. Its also a missing necessity for scaling speech.

    Its not a secret. Or, at least, its not intended to be a secret.

    1. bluntobj

      “Political micro-transactions”

      This has to be the best phrase I’ve seen all day, and thanks for pointing it out. I’ll even take it one farther by pointing out that in any second or third world country (or even first world countries) these political micro-transactions are also known as bribes, squeeze, h’eung yau, “facilitation payments”, etc.

      Here they are just campaign contributions paid in advance for future favors.

  7. chitown2020

    Right….they are the regulators…..Maybe we all need to fax or e-mail the Senate, the CONgress, the White House and the bankster CEO,S a pic of our middle finger….

  8. chitown2020

    If we fail…they will ALL fail because WE THE PEOPLE are TBTF..Imagine a world with no MEGACORP…That is what is coming. Their stores are dying….I see 2-3 cashiers in Target with no long lines…the malls, the banks and the Grocery stores are ghost towns…that says it all. No one is buying their b.s.

      1. chitown2020

        What backs the wealth of the FED…? JUNK..ZERO COLLATERAL…EMPTY PROMISES TO PAY $1.2 quadrillion in debt… The FDIC should revoke their banking charter…their license to do business in America should be terminated.

    1. Yves Smith Post author

      Sorry, that excuse is not even remotely germane. Nice try for the peanut gallery, though.

      This piece was not in the user generated content section. It was an invited review of Phillips’ book.

      And it was not scrubbed a year of two ago. It was up as recently as a couple of months ago.

      1. Meg

        The user content was dumped some time ago, but not the entire TPM Cafe. Contributors were still occasionally posting until about a month ago, and all their posts were still there until a recent redesign of the TPM site apparently dumped the entire Cafe. I can still see Cafe posts via the RSS feed (the last one is dated April 24, 2012).

  9. Lambert Strether

    No surprise. WKJM (Who Kidnapped Josh Marshall) was Marshall’s sobriquet in 20028, when some of us who thought TPM was about actual reporting noticed had turned into a cheerleading section. Like Krugman, except worse, in some ways, because the world really does need reporting.

    Funny about user-generated content, eh? Built the traffic, threw away the ladder when he’d climbed up it. That’s your career “progressive” for ya.

    1. SqueakyRat

      Krugman’s a cheerleader? What happened to the days when he was being denounced for supporting Hilary?

  10. Hugh

    This got me to thinking about the various “progressive” sites that railed against Bush and the Republicans but then basically drank the kool-aid when Obama and the Democrats did much the same. This is my offhand list, please feel free to add to it:

    TalkingPointsMemo (TPM)
    Crooks and Liars
    Democratic Underground
    Huffington Post

    Firedoglake after the great healthcare fiasco has become more critical of Obama but still believes in good Democrats

    1. Jim Clausen

      Hugh, I have followed and admired your work for years.

      I think if you have visited FDL lately you will find few Obamabots. They are referred to as the veal pen.

      Yves cites David Dayen’s work all the time.

      What’s the scandal list up to?

      1. Hugh

        They are critical of Obama but they have never officially rejected the Democratic party and they have never championed the creation of a progressive third party.

        As for the Obama scandals list, I have been on hiatus. The last addition to it was, I think, back in November 2011 when it hit 300. I have been saving some links in the interim, however, and I may start updating it beginning this week.

        1. Debt Relief

          Commondreams. Could be wrong, but I don’t think they ever mentioned MERS. That would be too leftish of them. Abby Zimet has the grocery store level humorous insight, with an agenda and evident good training. Obamacare can’t be critized, that would be too “left” before an election. Wall Steet? They’re given a combination flogging of the Nation, occassional Tiabbi, Rall and others. You know, all the critical stuff, that, upon closer inspection doesn’t really go too far in criticism by hammering on obvious corruption and naming powerful names. These authors will never say “burn the whole corrupt f#$king thing down it doesn’t work” that would be, you know, too accurate.

  11. Schofield

    If there are two types of capitalism in operation Real Economy Capitalism and Cannibal Capitalism then the one running the latter which also supplies loans to the former and has power to create money from nothing is going to dominate capturing democracy.

    NB. Cannibal Capitalism’s name is because it devours, or sucks out, demand from the real economy by blowing inflationary asset and commodity bubbles which substantially increase costs for the real economy through increased asset and commodity prices and debt repayment amounts.

    1. bluntobj

      I wish someone would coin a new term to replace all the “hyphenated capitalism” terms.

      The capitalism we, as citizens, practice is one where we work, earn money equivalents, and then spend or invest them as we see fit. We don’t blame others for our earned failures, nor arbitrarily prescribe how other people spend or invest.

      That kind of capitalism is not what we have now. I wish there was a more catchy term other than “mixed economy”.

      1. F. Beard

        I like “Banker Fascism” and “Counterfeit Capitalism” and “Faux Capitalism”.

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