Forgive me for going on a tangent, but this graph is just too startling to not comment on. Notice the steady growth in donations through ’06, a sudden drop in donations to Republicans as the GOP lost favor toward the end of Bush’s presidency, then WHAM! Spending on Republicans suddenly surpasses combined spending from the previous election. In 2010 as Obama has lost favor we see a sudden and drastic switch.
Like it or not, the fact is that hedge fund managers aren’t stupid people and I would be willing to bet that they are no more civic minded than the average citizen. So why this sudden jump in spending?
OpenSecrets.org offers this:
While individuals who work for hedge funds had been contributing to campaigns for some years, the industry itself didn’t emerge as a significant political player or campaign contributor until 2007, coinciding with the increased scrutiny the industry began to face from lawmakers.
Why the sudden change? It’s possible that Obama got hedge fund workers excited and then very suddenly changed their mind, but more likely they are chasing after those who will have political power. As with any industry, established firms want to court politicians to impose restrictions that reduce competition. Here are the top ten industries by political contributions for 2010 (from OpenSecrets):
|Rank||Industry||Total||Dem Pct||GOP Pct||Top Recipient|
|1||Lawyers/Law Firms||$65,528,469||82%||17%||Harry Reid (D-Nev)|
|2||Retired||$40,772,201||57%||43%||Barbara Boxer (D-Calif)|
|3||Health Professionals||$39,654,551||58%||42%||Mark Kirk (R-Ill)|
|4||Securities/Invest||$34,757,339||63%||36%||Charles E. Schumer (D-NY)|
|5||Real Estate||$32,515,882||62%||38%||Charles E. Schumer (D-NY)|
|6||Lobbyists||$26,951,037||70%||29%||Harry Reid (D-Nev)|
|7||Insurance||$25,729,843||53%||47%||Charles E. Schumer (D-NY)|
|8||Leadership PACs||$23,543,203||67%||32%||Roy Blunt (R-Mo)|
|9||Pharm/Health Prod||$17,509,087||58%||41%||Richard Burr (R-NC)|
|10||Public Sector Unions||$15,248,266||91%||9%||Gerry Connolly (D-Va)|
Health care figures prominently here, surprise, surprise. Interestingly a larger percentage was still going to the Democrats in 2010 for these industries, but all told Republicans did spend more in the 2010 elections. The sad truth is that many groups invest in elections instead of innovation. This slows growth and harms consumers. And bigger elections lead to bigger political investments.