This item by Mike Lux is cross-posted from The Huffington Post.
A fascinating article was in the WaPo yesterday morning about Democrats having more trouble raising money than they expected. I haven’t had the chance to really look closely at the numbers to compare how flat the big dollar fundraising was as opposed to the small grassroots donations but, according to the article, “The vast majority of those declines were accounted for by the absence of large donors who, strategists say, have shut their checkbooks in part because Democrats have heightened their attacks on the conduct of major financial firms and set their sights on rewriting the laws that regulate their behavior.” It also said that:

Other Democrats and their aides, who spoke on the condition of anonymity to discuss internal party strategy, said that rhetoric toward big business has grown so antagonistic that it has become increasingly difficult to raise money on Wall Street, particularly after the controversy about bonuses and executive compensation.

I am going to write today not from my populist blogger perspective, but from my intensely pragmatic Democratic strategist perspective. This is a complicated and important issue that Democrats, individual candidates, and we as a party, will have to wrestle with in the coming years.
Until we pass a public-financing bill for elections (a topic I will come back to), it is a very tough thing for a congressional candidate to not get the money they have raised in the past from big business. Wall Street is the wealthiest and most generous industry in cultivating politicians, so their withholding of dollars is a particularly hard hit, but other business special interests are going to be withdrawing or threatening to withdraw their campaign cash as well. If a public option is passed, insurance execs will be pissed, so a lot of their money goes away. If a serious climate change bill were passed, a lot of energy industry money goes bye-bye. It’s a serious problem for Democrats, and it’s what makes real change in Washington so damn hard.
I have raised a ton of money for Democratic candidates over the years, and I have worked on a ton of campaigns desperate for cash, so I would never minimize how hard it is to walk away from all this money. But tough as it is, the alternative in my very pragmatic view is quite a bit worse for Democratic prospects. The alternative is to downplay our rhetoric about change, and downplay our efforts to make real change — because let’s face it, it’s not mostly the rhetoric these business interests are worried about, it’s the policy.
That path leads us to mushy rhetoric that doesn’t address the real anger voters have at Wall Street and insurance companies. And it leads to policy choices that avoid dealing with the really deep and fundamentally important problems in our society. If we fail to take on the power and profits of Goldman Sachs and JP Morgan Chase, the smartest economists who most accurately diagnosed the problems that created the financial collapse last year say we are in for another major financial collapse in the not too distant future. If we fail to deal with these big banks after the bailouts they were given, the anger about those bailouts will boil over with voters in a hundred different ways.
Or take health care. The poll I referenced in my last post is absolutely stunning, and should strike terror in the hearts of any Democrat who is thinking of voting for an individual mandate without a public option: voters oppose a mandate on its own 64-34, but support a mandate with a chance of a public option or private insurance 60-37. And I think those numbers understate the sentiment. If you pass a mandate to buy insurance without creating real competition for private insurers, you know they will raise their rates and continue to screw people, and voters are going to be very angry.
The problem with the big money in politics is that politicians will start doing things that voters don’t like in order to get those checks. It leads to weak messaging and twisted policymaking, doing things that make no sense to average voters.
The ultimate answer is public financing of campaigns, ending this terrible dependence on special interest big money. It would make it so much easier for Democrats to do the smart thing politically and the right thing in terms of policy, to really make the transformative changes this country has to make. In the meantime, I am convinced that if we have to choose between losing that money from the bankers and the insurance execs, and doing the most sensible thing politically and policy-wise in every other way, the hard, cold, pragmatic path is the latter. We can find other ways to raise the money we need and win elections.