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The Rise of the Political Ultra-Rich

The wealthiest Americans are now flexing their political muscles more than at any time in decades.
Image: US Currency is seen in this January 30,
US Currency is seen in this January 30, 2001 image. AFP PHOTO/Karen BLEIER (Photo credit should read KAREN BLEIER/AFP/Getty Images)KAREN BLEIER / AFP/Getty Images

The rise of the political oligarchs

Money and deep-pocketed donors have always played a key role in American politics, but the wealthiest Americans are now flexing their political muscles more than at any time in decades. Consider the examples: On the right, the Koch Brothers-backed Americans for Prosperity has been airing millions of dollars in TV ads (see here and here) hitting Democrats in key 2014 Senate contests. Just last week, a single billionaire -- conservative casino mogul Sheldon Adelson -- held what amounted to a political cattle call where four potential 2016 presidential candidates showed up. On the left, environmentalist billionaire Tom Steyer has vowed to spend $100 million in the 2014 midterms. And in the relative center, former New York City Mayor Michael Bloomberg has created gun-control groups and turned a single Democratic special primary election in Chicago into a referendum on guns and the National Rifle Association. On top of this activity, Wednesday’s 5-to-4 Supreme Court decision allowing individuals to donate the maximum amount to as many federal campaigns as they wish only increases the amount of power and influence of super-rich donors. Moreover, it creates a new incentive structure for political parties and candidates to spend even MORE of their time courting these donors. The big loser in all of this new money and new power to the wealthy: the individual campaign (more on this below).

The financial arms race in American politics

Here’s one guarantee from yesterday’s Supreme Court decision: You’re only going to see more money in politics. So if you didn’t think there was enough money in politics before yesterday, then you should be happy about yesterday’s decision. Indeed, when you add the McCutcheon decision (eliminating the aggregate contributing caps) to the Citizens United decision (providing the blueprint for creating the Super PAC era) and the end of matching funds, we’re seeing a financial arms race in American politics. Political spending from outside groups -- either created or bankrolled by American billionaires -- has skyrocketed from $193 million in 2004 and $338 million in 2008, to a whopping $1 billion in 2012, according to the Center for Responsive Politics. To put this $1 billion in outside spending in perspective, it’s almost TWICE what John Kerry and George W. Bush spent COMBINED in the 2004 presidential race ($655 million). And it’s THREE TIMES the amount John McCain spent in the 2008 election ($333 million). Another way to look at all of this money: Overall political spending on races (presidential plus congressional) has DOUBLED from $3 billion in 2000 to $6.2 billion in 2012. And in presidential races alone, the combined amount that George W. Bush and Al Gore spent in 2000 (about $250 million) QUADRUPLED to the combined amount Barack Obama and Mitt Romney spent in 2012 ($1 billion-plus). And that doesn’t count the political-party spending…

Is this any way to run a democracy?

These twin developments -- 1) the rise of the oligarchs and 2) the financial arms race -- raise this important question: Is this any way to run a democracy? The New Yorker’s John Cassidy argues that what the Roberts Court has done with the Citizens United and McCutcheon decisions is to take the principle of “one man, one vote” to “one dollar, one vote.” Given the current Supreme Court, the remedies are very limited on how to put limits on political money if money equals speech. So it’s either a constitutional amendment (good luck with that) or more aggressive laws on disclosure (which could at least create a NASCAR-ization to politics where everyone’s “sponsor” is there for all to see). What’s stunning is how little interest there is in Congress to even promote the idea of more disclosure. But bottom line: This system of financing campaigns has now consolidated power in the hands of a few, which neither party should be celebrating. Does any candidate who runs for office want to have a wealthy person dictating the terms of the debate for them by simply using the power of their purse? Over the next week or so, the NBC News Political Unit will have ongoing coverage of the “Rise of the Oligarchs” in American politics. So be on the lookout.

The winners and losers of yesterday’s McCutcheon decision

The winners are the wealthy (see above), the political parties (not only can rich donors max out to all three main political party organizations, but now MORE can be created; think joint fundraising committees on steroids), and organizations that emphasize on bundling (like EMILY’s List and Club for Growth). But the BIGGEST winners are the political consultants and the entire industry of American politics. The loser from yesterday’s decision, however, is the individual campaign. With the power of Super PACs (thanks Citizens United) and now the increased bank accounts of the parties (thanks McCutcheon), individual campaigns are going to have less power than they’ve had in a long, long time. An individual campaign has so little control now over its own message and the issues it wants to focus on; it’s all going to be dictated more and more by the outside groups and the billionaires.

A short-term advantage for the GOP

As we wrote, the McCutcheon decision also gives the Republican Party a short-term advantage. Of the 591 donors who contributed at least $46,200 to all federal candidates in 2012, 14.5 million was given to Democrats, versus $19.5 million to Republicans, per the Center for Responsive Politics. That's 43 percent to Democrats and 57 percent to Republicans. But remember that political parties always adapt after campaign-finance changes. After the McCain-Feingold law, which banned unlimited "soft money" to the political parties, Democrats and Barack Obama created an army of small-dollar donors, who helped their victories in 2008 and 2012. Which all hits at this campaign-finance truth: A short-term money advantage doesn't last forever.

Charles Koch in WSJ op-ed complains about “character assassination” against him

Speaking of the oligarchs and money in American politics, Charles Koch last night published an op-ed in the Wall Street Journal defending his company, Koch Industries, and lashing out at the “character assassination” against him and his brother. “Instead of encouraging free and open debate, collectivists strive to discredit and intimidate opponents. They engage in character assassination. (I should know, as the almost daily target of their attacks.) This is the approach that Arthur Schopenhauer described in the 19th century, that Saul Alinsky famously advocated in the 20th, and that so many despots have infamously practiced. Such tactics are the antithesis of what is required for a free society—and a telltale sign that the collectivists do not have good answers.” Many political observers have wondered why Senate Majority Leader Harry Reid and other Democrats have pilloried the Koch Brothers after the millions of dollars their Americans for Prosperity has spent in key Senate races. Well, we’ve now seen one reason: Democrats have wanted to make them bleed. And the Koch Brothers have now responded in this Journal op-ed like they’ve been cut. In many ways, Charles Koch writing this op-ed is probably exactly what Reid and Democrats had in mind; they want to make the Koch Brothers a household name, they need the help of the Koch brothers to take the bait… One could argue, in this op-ed, he took bait.

How establishment Republicans are trying to survive Tea Party challenges

Turning to Senate contests, we’re seeing examples of how establishment Republicans are trying to survive Tea Party challenges. In North Carolina, American Crossroads is airing a TV ad for establishment GOPer Tom Tillis highlighting his work for voter ID laws. And in Mississippi, Thad Cochran is using guns and abortion as way to strengthen his conservative bona fides.