Sam Pizzigati: Bloomberg could buy 2020 election and still make money

Via OtherWords.org

BOSTON

Gracie Mansion, the official residence of New York’s mayors since 1942, hosted billionaire Michael Bloomberg for three terms.

The first of these terms began after Bloomberg, then the Republican candidate for mayor, spent an incredible $74 million to get himself elected in 2001. He spent, in effect, $99 for every vote he received.

Four years later, Bloomberg — who made his fortune selling high-tech information systems to Wall Street — had to spend even more to get himself re-elected. His 2005 campaign bill came to $85 million, about $112 per vote.

In 2009, he had the toughest sledding yet. Bloomberg first had to maneuver his way around term limits, then persuade a distinctly unenthusiastic electorate to give him a majority. Against a lackluster Democratic Party candidate, Bloomberg won that majority — but just barely, with 51 percent of the vote.

That majority cost Bloomberg $102 million, or $174 a vote.

Now Bloomberg has announced he’s running for president as a Democrat, arguing he has the best chance of unseating President Trump, whom he describes as an “existential threat.” Could he replicate his lavish New York City campaign spending at the national level? Could he possibly afford to shell $174 a vote nationwide — or even just $99 a vote?

Let’s do the math. Donald Trump won the White House with just under 63 million votes. We can safely assume that Bloomberg would need at least that 63 million. At $100 a vote, a victory in November 2020 would run Bloomberg $6.3 billion.

Bloomberg is currently sitting on a personal fortune worth $52 billion. He could easily afford to invest $6.3 billion in a presidential campaign — or even less on a primary.

Indeed, $6.3 billion might even rate as a fairly sensible business investment. Several of the other presidential candidates are calling for various forms of wealth taxes. If the most rigorous of these were enacted, Bloomberg’s grand fortune would shrink substantially — by more than $3 billion next year, according to one estimate.

In other words, by undercutting wealth-tax advocates, Bloomberg would save over $6 billion in taxes in just two years — enough to cover the cost of a $6.3 billion presidential campaign, give or take a couple hundred million.

Bloomberg, remember, wouldn’t have to win the White House to stop a wealth tax. He would just need to run a campaign that successfully paints such a tax as a clear and present danger to prosperity, a claim he has already started making.

Bloomberg wouldn’t even need to spend $6.3 billion to get that deed done. Earlier this year, one of Bloomberg’s top advisers opined that $500 million could take his candidate through the first few months of the primary season.

How would that $500 million compare to the campaign war chests of the two primary candidacies Bloomberg fears most? Bernie Sanders raised $25.3 million in 2019’s third quarter for his campaign, Elizabeth Warren $24.6 million. Both candidates are collecting donations — from small donors — at a $100 million annual pace.

Bloomberg could spend 10 times that amount on a presidential campaign and still, given his normal annual income, end the year worth several billion more than when the year started.

Most Americans don’t yet believe that billionaires shouldn’t exist. But most Americans do believe that America’s super rich shouldn’t be able to buy elections or horribly distort their outcomes.

But unfortunately, they can — or at least, you can be sure they’ll try.

Sam Pizzigati, based in Boston, co-edits Inequality.org for the Institute for Policy Studies. His recent books include The Case for a Maximum Wage and The Rich Don’t Always Win.

David Warsh: 3 big things to know about Michael Bloomberg

Michael Bloomberg.

SOMERVILLE, Mass.

If it weren’t for the intricate machinery of party governance, former New York City Mayor Michael Bloomberg, 76, might be the odds-on favorite to be the Democratic nominee in 2020 and president in 2021. He is sensible and seasoned.

His major drawback is that he is a billionaire, like the incumbent, though far richer than Donald Trump. My favorite odds-maker puts Bloomberg’s chances at about 4 percent. Starbucks entrepreneur Howard Schultz, another billionaire, is going fold his bid sooner or later, just as asset-manager Tom Steyer did his last month, but Bloomberg isn’t going away. He hasn’t declared yet, so it’s much too soon to speculate about possible pathways to the nomination. Therefore, invest a few minutes in a little background.

Bloomberg’s biography is the first thing. Lengthy profiles will be written. I’ve read a few in the past, including Joyce Purnick’s 2009 biography, and I look forward to reading more. But meanwhile, I took advantage of the January thaw to visit his boyhood home in Medford, Mass. It is not far over the Mystic River and through the woods from my office in Somerville.

The Bloomberg family moved to a modest two-story colonial house at 6 Ronaele Rd., in 1945, when he was 3. His father, an accountant for a dairy company, born in Chelsea, Mass., bought the deed from his lawyer in order to circumvent a tacit ban on sales to Jews in the newly developed subdivision.

William Bloomberg died in 1963, at 57. Charlotte Bloomberg lived there until she died in 2011, at 102. Her son visited her frequently, and paid for a redesign of her synagogue, but Bloomberg himself left Medford in 1960 for Johns Hopkins University, Harvard Business School and Manhattan. His loose ties with the little city in which he grew up were nicely explored in 2012 by New York Times reporter Michael Grynbaum.

A second thing worth knowing about Bloomberg has to do with some changes last year in his business. You may remember how be got into the news business, by reverse engineering it. With the $10 million severance payment he received after Phibro Corp. acquired Salomon Brothers in 1981, Bloomberg – who had previously been banished to the firm’s back office – founded a bond-data business of his own. The real-time databank he assembled, equipped with a steadily growing battery of analytic tools, was vastly superior to the tables that newspapers offered in their financial pages. Bloomberg was able to sell subscriptions to his desk-top terminals for prices eventually reaching $20,000 a year.

In 1990, he hired Matthew Winkler, a Wall Street Journal reporter and editor, to build a staff for the brand-new Bloomberg News. The newsroom grew at an astonishing pace, until it had become one of the world’s largest news organizations, with 2,700 editors, reporters and commentators, arrayed in 150 bureaus around the world. The company put much of its news reports on the Web for free, but access to the whole remained the privilege of the high-paying few.

In 2009, Bloomberg bought the venerable BusinessWeek magazine from McGraw Hill, reorganized its coverage, and put his name on the cover. In 2015. he hired John Micklethwait, editor-in-chief of The Economist, to oversee all of Bloomberg News, and shape up a staff that had grown in ramshackle fashion. Last summer, the company took another important step towards becoming a proper news business, placing its previously free consumer news behind a metered paywall, offering full-access subscriptions at $35 a month, and slightly more content for $40 a month.

That strategy – It’s-Worth-What-You-Pay-for-It – brought Bloomberg News more nearly in line with the practices of The New York Times, The Washington Post, the WSJ and the Financial Times. It also made Bloomberg himself seem more of a newspaper publisher, complications and all, than a technocrat. (Bloomberg’s Rich List doesn’t mention the boss; Forbes pegs him at around $48.5 billion.)

What’s the third thing about Bloomberg? It is the observation with which I began. If he were 10 years younger, a good deal less wealthy, and fresh out of office, he’d likely be the front-runner in the presidential race now taking shape – ahead of four inexperienced senators, a former vice president and a thoroughly tarnished incumbent.

True, Bloomberg’s negatives are high with some traditional Democrats – stop-and-frisk policies as mayor, intimate ties to Wall Street, and a proudly prickly personality. Can the party leadership swallow their pride long enough to win an election? Bloomberg is old – 77 this month. Can the rising generation continue to work the ‘tweendecks of politics for another few years? What if Beto O’Rourke, 46, endorsed him? Would he enter the race if Joe Biden decided to run? (Perhaps not. Here, from The Atlantic last week, is Edward-Isaac Dovere’s well-informed account of Bloomberg’s planning.)

A term or even two of a Bloomberg presidency would give the nation intelligent and even-handed leadership. The major parties would have time to groom a new generation of leaders and narrow their differences somewhat. However unlikely it may be to succeed, Bloomberg’s candidacy is worth taking seriously.

David Warsh, a veteran columnist and an economic historian, is proprietor of economicprincipals.com, where this piece first ran.

James P. Freeman: Will Boston follow New York's perilous progressivism?

“One entered the city like a god; one scuttles in now like a rat.”
— Vincent J. Scully, Yale architectural historian

So was the thinking about the demolition  in 1963 of a Beaux Arts masterpiece in New York City, the old  Pennsylvania Station, an act of progressive vandalism, from which rose (or sank) the present site of the Madison Square Garden complex, a dingy maze of commerce and commotion. In the 1960s, progressivism – once a purely political movement – began to seep into civics and cultural mores, even private-sector  architecture.

The city ultimately recovered from this destructive movement in the 1990s and 2000s. But with vicious irony, Bill de Blasio was elected in 2013 as New York City’s mayor (the first Democrat in 20 years) within days of the  50th anniversay of the old Penn Station’s demise.

De Blasio is today’s most outspoken urban progressive, with ambitions beyond his abilities. His friend, and fellow co-chair of Cities of Opportunity Task Force (COTF), Boston Mayor Marty Walsh, should resist this progressive lurch, and distance himself from de Blasio, as he eyes re-election next year.

De Blasio’s Progressive Agenda is intellectual graffiti, slowly defacing the very progress that New York City has enjoyed over the last 20 years; it is also agitating residents, given recent polling.

Boston too has experienced a remarkable 20-year rejuvenation, from which it should not retreat in an effort to emulate New York.

Walsh may not seem like a progressive pillar (more of a wanna-be) but that didn’t stop then-Boston Globe columnist Joan Vennochi, during 2013’s mayoral campaign, from describing his stance on issues as, “dear to progressive hearts.” As The Globe further noted a year later, de Blasio and Walsh “both campaigned on a message of economic populism, vowing to tackle income inequality and dramatically expand early education” – among the flash points of the progressive agenda.

With regard to “rising inequality” and “declining opportunity,” de Blasio said, upon the launch of the COTF that, “the task force is going to organize and focus the progressive ideas coming out of cities.” The defining mission of the COTF is to “make equity a central governing principle” and “advance a national common equity agenda.”

What progressive ideas in the last 50 years have benefitted the likes of, say, Detroit, Chicago and Baltimore, bastions of murder and mayhem? And since when is equity a “governing principle”?

Under Mayors Rudolph Guiliani and Michael Bloomberg, New York City repelled those progressive ideas, making the city safer and more prosperous. Boston was certainly not a progressive haven during these years. Indeed, the late Thomas Menino – Boston’s longest serving mayor – was more of a powerbroker and pragmatist, eschewing lofty ideas. Rather, he fully embraced being the “Urban Mechanic.”

Last year at the second meeting of the COTF, held in Boston, Walsh said, “inequality is a national crisis. It’s holding down wages, it’s holding back our economy, it’s undermining the American Dream.”

Not in Boston. Apparently Walsh does not see the paradox of progressive thinking as it applies to his city. Boston has one of the highest inequality levels in the country, yet The Hub is flourishing. It will be fun watching Walsh explain why Boston should adopt de Blasio’s progressive politics during next year’s mayoral race.

There are other areas where the two mayors are ideologically simpatico: climate change (both mayors attended a Vatican conference on slavery and climate change last year; Walsh says – seriously! – there is “social equity” when “talking about the environment”); free universal pre-K education (in a 2013 position paper Walsh indicated that there is“no greater equity issue” than ensuring all students “start kindergarten with foundational skills”); and affordable housing. Progressives demand equality of outcomes in all aspects of life — even if it is not earned or deserved or paid for.

Writing for The American Prospect, Harold Meyerson noted that the mayoral class of de Blasio and Walsh, among others, in 2013 is “one of the most progressive cohorts of elected officials in recent American history.” Collectively, they may be “charting a new course for American liberalism.”

Today 27 of the nation’s 30 largest cities have Democratic mayors. But, mercifully, 23 states are controlled by both Republican legislatures and governors. It remains to be seen if the new progressives will leave a positive legacy. Preferably, it will be a short-lived one.

Once again, there is talk of “transforming” Penn Station and returning it to its former state of grandeur. That is the delicious irony of New York’s progressivism: everything old is new again. Boston need not repeat the refrain or rattletrap.

James P. Freeman is a New England-based writer and former columnist with The Cape Cod Times.  This piece originated in The New Boston Post.

David Warsh: Kasich's time may have come

SOMERVILLE, Mass.

Readers have wondered when I might back off the hunch I voiced a year ago, and reiterated as recently as December, that Jeb Bush still could eventually win the presidency.  Here goes:

Bush clearly no longer has a chance of winning the nomination. It is Ohio Gov. John Kasich who appears ready to seize the role of a plausible competitor to the eventual Democratic nominee. There appears to be almost no political difference between the two men, except the heavy baggage connected with the former’s name. Kasich is running second to Donald Trump in New Hampshire in the polls.

Nobody said it would be easy, but the logic of Kasich’s candidacy is simple:  If he polls strongly on Feb. 9 in New Hampshire; if he gains enough traction in February to score some successes in the Super Tuesday primaries on March 1; if he wins Ohio’s winner-take-all primary on March 15; if he gains the nomination of the Republican Party at its convention in Cleveland in July – then he stands a good chance of being elected president in November.

Why?  Because he is good at appealing to voters who consider themselves independent of either party’s establishment.  And it takes 270 votes in the Electoral College to win the presidency.  And it’s a stubborn fact of present-day U.S. politics that most states are virtually certain to wind up in one column or another.

Kasich would seem to be competitive with the Democratic nominee, whether it is Hillary Clinton or someone else, in all 10 states that seem likely to be up for grabs in the fall – Nevada, Colorado, Iowa, Wisconsin, Ohio, Pennsylvania, Virginia, North Carolina, Florida and New Hampshire.

I have been as surprised as everybody else by events of the last year. Let’s review:

It was barely a year ago that Mitt Romney announced that he was mulling a third presidential bid. The establishment wing of the Republican Party swiftly overruled him, indicating a preference for Jeb Bush, who in December 2014 had mentioned on his Facebook page that he was considering a run. Supposedly preemptive sums of money flowed to Bush’ s Super PAC, Right to Rise, run by political consultant Mike Murphy. Romney quickly steered off.

What happened next was that,  unfazed, 15  other persons declared their candidacy for the Republican nomination, one after another, along with Bush: Ted Cruz (March 23), Rand Paul (April 7), Marco Rubio (April 13),  Ben Carson (May 4), Carly Fiorina (May 4), Mike Huckabee (May 5), Rick Santorum (May 27), George Pataki (May 28), Lindsey Graham (June 1), Rick Perry (June 4), Bush (June 15), Donald Trump (June 16), Bobbie Jindal (June 24), Chris Christie (June 30), Kasich (July 21), and Jim Gilmore (July 30).

Among the Democrats, Hillary Clinton declared her candidacy on April 13, Bernie Sanders on April 20, former Maryland Gov. Martin O’Malley on May 29, and former Rhode Island Gov. Lincoln Chafee on June 3. Sanders has recently swept ahead of Clinton in polls in both Iowa and New Hampshire.

Why such pandemonium?  The over-arching explanation seems to be Bush-Clinton fatigue after so many years of their presence in presidential politics.

Without a single vote being cast, real-estate baron and reality-television star Trump vaulted to front-runner status in most polls of Republican voters.  It’s getting a little late to explain U.S.  outcomes in terms of the aftermath of the 2007-09 financial crisis; Europe is another matter: most likely the Trump phenomenon is an expression of ephemeral contempt for dynastic politics. 

Trump is not the first self-financed celebrity candidate to seek the presidency.  He’s just the one with the fewest principles.  Software entrepreneur H. Ross Perot ran as an independent candidate in 1992, upstaging incumbent George H. W. Bush and enabling Bill Clinton to win the presidency with just 43 percent of the vote (Perot received 19 percent and Bush 37 percent, but electoral vote totals were 370, 168, and 0.) 

Former New York City Mayor Michael Bloomberg is threatening to enter the race as an independent if Sanders gets the better of Hillary. An interesting questions have to do with Trump’s options once his star begins to fade. Eventually he presumably will become a commentator. Better for everyone if it were sooner rather than later.

Bush could do everyone a favor by quickly stepping out of the campaign if his New Hampshire totals are disappointing and urging his massive organization to support Kasich.  As far as I can tell, his politics are little different from those of the Ohio governor, except on foreign policy. Still, Bush would make a very good secretary of state in a Kasich administration.  The silly negative ads with which the two campaigns are attacking one another in the final days of New Hampshire should stop.

I have no idea how likely any of this might be. I do know an incredibly interesting political season looms.  There is a real possibility that the election of a moderate Republican would be good for the country, mainly for the obvious reason:  Kasich’s success would dampen the amplitude of extreme opinion on the right.

You might wonder, whence stems my license to pronounce on these matters?  I have, after all, never covered a campaign. All I can say is that these arguments are deeply grounded in concern for economic affairs over the long run, and you will never hear them from my old friend and fellow economics columnist, Paul Krugman, of The New York Times.  He thinks that there are no moderates in the Republican Party primaries, and that even if there were, they wouldn’t stand a chance.

David Warsh, an economic historian and a long-time financial journalist, is proprietor of  economicprincipals.com.