February 07, 2008

Money Talks: Why is Hillary Running Out Of It?

After the American Century

Remember all those news stories about Hillary Clinton amassing a huge campaign fund? More than anyone else? About $100 million. Well, she has used it up. She has had to give $5 million of her own money to keep the campaign going, and even so some members of her staff are not being paid this month. One reads in the press about "donor fatigue," because she has been hitting the same people for funds continually sine 2006.

But this is likely not "donor fatigue." This is money talking, and the smart money is now saying "Obama." Yes, Hillary has more delegates than Obama, if you count the super delegates. But without them (and they can change their minds), she is in a dead heat with Obama. Therefore, she really needs money right now, and the idea that rich donors suddenly are "fatigued" is almost silly. How better to create a political debt than to donate right now?

How bad is it? Until a few days ago Clinton had no campaign staff in the State of Washington, where the largest group of delegates is to be selected on Saturday. So the out-of-state professionals, who have rushed in now, must compete with Obama's office. It has been open for a long time, and it does not have any money problems. With almost 100 delegates at stake in a strange hybrid system that involved a caucus but also later voting, being on the ground early is crucial. Washington State is a likely place for Obama to gain on Hillary.

For Clinton, it gets worse. Louisiana also holds a primary on the same day. After the Bush Administration's flawed handling of the flooding from Katrina, the population there is angry at the Republicans and ready to vote for change. There is also a large Black population there, likely to vote overwhelming for Obama. In short, this state could also go against Clinton.

Finally, there is Nebraska, a Midwestern state that might vote the same way that neighboring Iowa and Kansas did, for Obama.

Is it not possible that Hillary's donors have begun to suspect that Obama can carry the most states, and therefore win the most electoral votes? Are some of her (former) donors also friends of Ted Kennedy? If one assumes that, regardless of who is the candidate, the Democrats will win California, New York, and Massachusetts, as all polls and past elections suggest, then which candidate can win elsewhere, particularly in the swing states? The voting this weekend could establish Obama is the one who can do that, making him the most viable candidate. This might give him the momentum needed to get the nomination.

Then again, even if Obama wins all three states it will only bring him a modest gain, because the Democratic Party rules divide the delegates up roughly proportionally. That is why there seems to be almost no chance that either Hillary or Obama can assemble 2025 delegates before the Pennsylvania Primary in April. One of the most important swing states, because of its 12.4 million population, Pennsylvania calls itself "the keystone state" - certainly an appropriate name in this election.

Hillary will need money for Pennsylvania, and so will Obama. But he has been phenomenally successful raising money from ordinary people. More than 100,000 individuals donated more than $30 million to him in January alone. It may seem a shallow way to compare the candidates, but the ability to raise money and organize an effective campaign might be one measure that helps us to decide who is the better candidate. As Americans say, "Money talks." At the moment, Hillary has to dig into her own pocketbook to be heard.