09 May 2012

Money For Politics Is Too Tight To Mention With FIRE Economy Honchos

Earlier this morning I was replying to a post on a popular housing blog as to what I thought was happening with diminishing donations to the GOP this voting season. My guess was the lobbyists for and direct donations from the bigshots running construction, financing, insurance and real estate companies have had to pull back on trying to sway elected officials because stupid money is no longer being made in the building of new homes.


A recent bit of news tells the tale. From the Chicago Tribune:





WASHINGTON (Reuters) - The share of privately-owned U.S. homes fell to a 15-year low in the first quarter as falling house prices and stringent lending conditions push younger Americans, in particular, into renting.


The homeownership rate slipped to 65.4 percent, the lowest since the first quarter of 1997, the Commerce Department said on Monday, with the rate for Americans under the age of 35 dropping to an 18-year low.





With homeownership at a 15-year low, how badly could the FIRE Economy honchos be suffering in an era where so few are buying homes?


Well, my suspicions about lobbying money being short for the party which loves big business, the GOP,  were just confirmed in a Sacremento Bee article titled "Real estate bust sinks GOP fundraising". From the piece:






The nearby Los Angeles region is collecting donations at a rate that’s a bit better than half the speed of 2008. The view is just as bad if you zoom in on Orange County: about $2.6 million so far this election cycle, compared with almost $4.8 million at the same point in the 2008 race. Across the county, home values have slipped more than $150,000 since the crash.
The takeaway is clear: When real estate suffers, it depletes an entire ecosystem of developers, contractors, builders, sellers and designers who step back from presidential giving. One place that occurred is in Miami, where GOP giving plummeted 35 percent.

Through March 2008, donors from the real estate industry had given $14.5 million to Republican presidential candidates, according to data compiled by the Center for Responsive Politics. That total is down 57 percent, to $6.2 million. 
The crunch highlights the nexus between private capital and political sway. In an up economy, whales — in finance, real estate and other sectors — lean on deal partners in order to bundle checks. The fewer number of deals, though, the less campaign cash. 
“There are many, many people — very close friends of mine — that spent their whole careers in real estate, and they’re not in a position to be major contributors this time around,” said Jeff Kottkamp, Florida’s lieutenant governor until 2011 and a former backer of Rick Perry.


To which I will add, if it's that bad for GOP coffers, how can the Party of Big Business expect to win back the Congress and win the Senate and Presidency to once again establish One Party Rule as they had under George W. Bush for four of his eight years?


This is going to be a tough political season for all. But especially the GOP, which is used to gathering bigger from the frontlines of Big Business.


Campaigns are more expensive than ever and money is too tight to mention. 


I look for more mud-slinging than ever, the kind which will garner a candidate an above-the-fold free PR as politicians try to work around the shortage of contributions from their former well heeled friends.







Stat Counter from 10 Nov 08