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Home / Politics  /
The Purposeless Spectacle Of Presidential Elections, Part I
election president

Guess what?  The joke's on us.


An American citizen can't legally order alcohol at a bar Stateside until he's 21; but by age 18, as a legal adult, he has the 'right' to vote.

Most of those young ones find the alcohol imbibing privileges the more meaningful of the two.  So do plenty of older folk like myself.

Am I being overly simplistic and droll? Voting might yield personal rewards for the scads of local elections that don't make the news , for positions like county treasurer, president of the city council, or precinct committeeperson.  Even then, most of the local voting public probably derive more joy from choosing what beer or whisky to drink.

The big election in the USA, the election that grabs everyone's attention, including non-Americans', is the quadrennial one in which the President of the United States is chosen. Idealistic sorts could call the American Presidential election a symbol of democracy itself.

In my younger and more naive days, I voted in a couple of these. I was in England during my first eligible presidential election and in Sweden during my second. I voted absentee both times. I was in Malawi for my third and, by then, didn't think voting was worth the trouble. Other travelers convinced me to exercise my rights, so I headed over to the U.S. Embassy in Lilongwe. I was informed my absentee ballot wouldn't get back to the US in time to count.

I got a real sour taste in my mouth in the run up to the 2000 election. I was mostly apolitical by that stage, but my then partner on an internet venture wanted to raise money for John McCain's campaign because McCain was pro-internet. They all say they're pro-internet, by the way. The McCain campaign ignored us when inquired how we could be of aid, yet my friend/partner insisted we try to raise money for them anyway before McCain possibly became a nonentity. We barely raised any money, got accused of page-jacking, and were later interviewed and exonerated by the FBI.

I never bothered to vote in a presidential election again.

Presidential elections are a big, big business.  The Economist estimated that parties, candidates, and interest groups spent at least $5bn on the 2016 election, almost double what the 2008 and 2012 presidential elections cost.  The stakes continue to get bigger. In 2008, Barack Obama raised $778m, a figure greater than the amount all the presidential candidates combined amassed in 2004. 

It might be more explicatory to see this all as a business, which it certainly is. Think of Obama's run in 2008 as the formation of a startup called Obama Presidential Enterprises, Inc for which $778m was raised in a series A round and $760m spent. McCain Presidential Enterprises raised $383m and spent $358m. 

These are immense investments. Google, by comparison, raised just $125m in its angel investments and Series A.

Now ask yourself this very important question:  would Google have had any prayer of raising $100m in angel investments and $25m in a Series A if investors didn't see a chance of the company ever turning profitable enough for them to cash out? It's not important if Google had a workable profit model in place at the time of those investments. Investors ponied up the cash believing that someday Google would figure out a way to become profitable.

You could never imagine your local plumber being able to raise $125m to build up his local plumbing business. His business couldn't be scaled to reap the kinds of profits a $125m investment would warrant. You also couldn't fathom anyone investing $10m in the political campaign of some anonymous peon running for the position of state auditor in Wyoming, a job that doesn't pay above $40,000 annually. It would take more than 250 years at the position's pre-tax salary to break-even.

Incredibly, the break-even time for the Presidential spot takes quite a bit longer. Using Obama's 2008 figures, it requires 1,900 years of his pre-tax salary to pay off what was spent on his campaign.   Add in the $1.1bn Obama raised in 2012 on his Series B for re-election, and it takes over 4,600 years.

And yet the spending happened. And continues to happen year after year, campaign after presidential campaign.

Someone like billionaire Ross Perot can spend over $60m of his personal funds on his own campaign in 1992. When he lost, this $60m made no impact on his standard of living.  Were he to have won, on the other hand, the connections he would have secured inside government, fused with the companies he already controlled, stood to earn him a darned sight more than $60m in his post-Presidential years.

It's easy to see the return on investment for Perot. Perot is a special case. As a big spender in his own campaign, he held more shares in Ross Perot Presidential Enterprises, Inc. And as an already successfully operating businessman, he was in line to more profitably benefit his own business interests once he left office.

Make no mistake. It is VERY profitable to win the role of President of the United States.

Current laws limit individual contributions to $2,700 per election to a Presidential candidate.   Individuals can also give $5,000/year to a political action committee; $10,000 to a state or local party committee; $33,400/year to a national party committee; and $100 in cash to any political committee. Most Joe Average Taxpayers, if they're contributing, are giving in the hundreds of dollars, not the hundreds of thousands. 

One reason the amounts raised and wasted are so large compared to a Silicon Valley startup is the apparatus raising all this money doesn't have to care about furnishing Joe Average Taxpayer a real return on his 'investment.'   Joe's payoff is in his candidate winning, and even when that happens, Joe's contribution gives him nonexistent clout. He holds zero shares in that candidate's Presidential Enterprises business. Joe's cheque wind up a donation regardless of whether his candidate succeeds.

Those holding real (but never declared) shares in a Presidential Enterprises business get skin in the game.  The Washington Times profiled Obama's re-election bid for 2012 and discovered that 60% of his funds came from big-money bundlers. A Hollywood mogul, a Wall Street financier, or Chicago establishment figure contributes some of his own cash and/or offers perks like private jets or swank pads for parties and then utilizes his own power and connections to squeeze more cash from Joe Average Taxpayers. A bundler wouldn't actually have to outlay any of his own money to get shares in the candidate's Presidential Enterprises business as long as he can convince plenty of other people to do so.  All the campaigns, to the extent that they can, are using money bundlers to secure big funds. 

You and I and every other Joe are the equivalent of supporters of a Kickstarter campaign for the next Veronica Mars film. We get a free poster and a thank you note and have to go pay to see the movie in the theater like everyone else. When and if the movie becomes successful, only those with real shares get a portion of the profits.

The politically na├»ve (e.g. the little guys being solicited for a few hundred bucks) don't see any of this Presidential election stuff as for-profit business. This is the free and fair democratically famous United States of America. U.S. Presidents don't sit as figureheads on Presidential Enterprises businesses and distribute dividends to their shareholders, do they?

If you mean, do Presidential hopefuls incorporate real companies called George W. Bush Presidential Enterprises or William J. Clinton Presidential Enterprises and draw up legal agreements giving shareholders specific stakes in the company, no. There is no official Barack Obama Presidential Enterprises, Inc.

Rewards are divvied out to "shareholders" in more discreet ways. Haliburton, for example, supported George W. Bush's presidency after getting cushy with the government during Bush's father's time in office. Haliburton's CEO went on to become Vice-President, and Haliburton reaped dividends on its shares by getting awarded many no-bid taxpayer-fleecing contracts during the Iraq conflict.  All told, Haliburton was given $39.5bn in Iraq-related contracts, the number one recipient.

The Presidents are the front men of their various Presidential Enterprises businesses. They're not the CEO's. Their chief task is to act as a spokesman-salesman for their backers. The Presidents announce to the public their backer's agendas and then sell the public on them. Not by themselves. They have speechwriters, consultants, cabinet members, industry analysts, lobbyists, and the media to help compose the arguments and gather the 'evidence.'  George W. Bush and his team, for example, with ample help from the Associated Press and Fox News, sold the public on the idea that Iraq had weapons of mass destruction.    In between, if it isn't so controversial, a President can try to push through some of his own personal initiatives. 

In exchange for lending a face to the Presidential Enterprises' missions, the President is also given a certain amount of shares he can redeem for cash and benefits.  How much those shares are worth depends on several factors: the President's personal charisma, how well liked the President and his Administration are during their tenure and afterwards, the number of years which have elapsed since that President left office, and the other people or businesses in which the President chose to re-invest his shares while he was still in office.

That's right. The President can re-invest shares. Not literally, of course.  He does favors for particular individuals, businesses, and organizations while he's acting President in anticipation that these "investments" will reap compounded rewards down the road. Bill Clinton pardoned fugitive Marc Rich on his last day in office, a "shocking abuse of presidential power," by the New York Times' estimation, in exchange for a $450k donation to the Clinton Library by Rich's ex-wife and $1m+ to other Democratic campaigns during Clinton's time in office and other lucrative payouts by Rich's connections ever since.

A modern American ex-President won't waste a second in cashing out. These investments can take the rest of his life to redeem provided he re-invested his original shares shrewdly.  He'll get board of directorship positions that require little or no work, be hired for lucrative speaking fees by organizations he serviced while President, setup (corrupt) foundations to funnel in more cash. The number of lucrative schemes is limited only by the imagination and only becomes possible to deconstruct after the President has left office. 

The President, incidentally, isn't the only one granted the privilege of share re-investment for post-office profits. His vice-president and other various cabinet members, as part of the Presidential Enterprises business, get shares, but typically a lesser amount.

And all of it's legal. Well, sort of. It's legal in the sense that the ex-Presidents and fellow stakeholders aren't going to have to do jail time or return any of the cash.  The full extent of the Clinton corruption-wealth connection is documented in Peter Schweizer's book Clinton Cash.  None of that corruption or any of the Wikileaks cables publicized later hurt Hilary Clinton's chances for being nominated as a Presidential candidate. The by now quite familiar shady dealings orchestrated in the White House by Donald Rumsfeld and Dick Cheney during the George W. Bush Administration haven't put them anywhere near a jail cell.  George W. Bush Presidential Enterprises seems to be the most atypical of modern Presidential businesses in that the acting President looks like he got fewer shares than some of his team members. 

A company's objective is to increase shareholder value. That's also the job of any Presidential Enterprises concern.  But the shareholders here aren't the American public the President supposedly represents.   They're a shadow government, major conglomerates, the industrial military complex, bankers, the Council on Foreign Relations, the Trilateral Commission, the Bilderberg Group, and other organizations most of us have never heard of. Who they are exactly is hard to say since, officially, such shareholders don't exist. 

It's these shareholders who think nothing of spending $4.6bn on a Presidential election circus since they stand to profit a lot more than that when four years are over. 

A circus is an apt analogy because that's what it is. A show.  For public consumption. A month before the 2016 election, Hilary Clinton had $1.1bn in her coffers and Donald Trump $712m. Bear in mind that only one of these competing Presidential Enterprises operations is going to exist past the election.  Because Trump is more likely to lose this round, his $712m 'startup investment' appears to go up in smoke.  That's a lot of money to lose, but the losing camps have to spend big to have any chance of possibly winning.

This tanked cash in a losing Presidential Enterprises business is an illusion. There are not really two sets of backers funding two different Presidential Enterprises startups. There is just one set of backers offering the public a few seemingly different products, knowing that one has to stick come election time. This one startup, initially, is called Presidential Enterprises 2016. The immense sums raised and "lost" by the losers are part of the cost of putting on a $5bn show, and all good shows need lots of conflict.

Is that a good enough reason not to show up at the polling station?

In part 2, I outline more.

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