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Affluent Investor | June 29, 2017

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Most Important Political Facts of the Week

Benjamin Solomon "Ben" Carson, Sr (Photo by Gage Skidmore) (CC2.0) (Resized Cropped)

Benjamin Solomon “Ben” Carson, Sr
(Photo by Gage Skidmore) (CC2.0) (Resized Cropped)

Most important political fact of the week: the dominance of the outsiders.

It’s not just Trump, who in last Thursday’s Monmouth poll hit an incredible 30%. The same poll found an equally improbable Ben Carson in second at 18%, and Ted Cruz tied for third with an increasingly anemic Jeb Bush.

A royal host of governors and senators trail in their wake. Far, far in their wake.

In many other polls, Jeb Bush is among those also-rans. Indeed, in the NBC poll released immediately after the first debate, the top four consisted of Trump, Carson, Cruz and Fiorina. Cruz, the Senator most hated by Beltway insiders, counts as an outsider for most practical purposes.

Regardless, the real issue is the ongoing rejection of anyone seen as “inside.” This is beyond mere populism (more on that in a minute). Plenty of pundits are talking about Ross Perot, George Wallace, even William Jennings Bryan. But Perot didn’t face a field of other Perots: there weren’t three or four outsiders leading the field in 1992, or any other year. And with Monmouth showing Rubio 5%, Huckabee 4%, Walker 3%, Kasich, Christie and Paul tied at 2%, Perry 1% and Santorum, Jindal and Pataki tied at 0%, the difference between them and the guys at the top is enough to make you catch your breath.

Something more than the usual frustration is going on.

Which leads us to the second most important political fact of the week: the degree to which this is all tempered by money.

Trump has something like infinity times a googleplex: the only limit is what he wants to spend. Carson and Fiorina continue to struggle both at organizing and at fundraising, but their poll numbers will drive their cash. As I’ve previously noted, Cruz came out of Q2 with ten times Jeb Bush’s donor base, with half as much money (but raised in half the time).

When last I spoke to him, he’d more than doubled his number of donors. We’ll find out at the end of the month about cash.

Number of donors matters because it’s a measure of breadth of support, and also because a larger numbers of donors equates to a large number of small donors: regular people. Bush’s 12,000 donors were mostly fat cats. Cruz’s 120,000 (now more like 300,000) are the kind of people who give $25, and then do it again and again. But they’re also the sort who show up at rallies, walk precincts and vote at caucuses. And unlike the big guys, once they’ve given you money they tend to stick.

How does this affect the outcome? Well, no matter how much Jeb Bush may be fading, he isn’t going away. He had $103 million on June 30, and even if he has completely ceased fundraising since then (not likely), he will easily be in second or third place in terms of available cash come Iowa. Whichever of those places he holds, Ted Cruz will take the other one. The Carson and Fiorina surges indicate that one or both of them will likely be fourth.

This is a disaster for the rest of the field (calling most of them “Establishment” would be grossly unfair, so we’ll call them the “officeholders” with apologies to Cruz). Why? Because there are only a handful of media markets in Iowa, New Hampshire, Nevada and South Carolina. Bush, Trump and Cruz by themselves can saturate those, right now, with no additional cash. The others can’t.

It’s not impossible to win Iowa without money. Santorum did it in 2012, Huckabee did it in 2008. But it’s improbable. And when there are wildly popular people ahead of you with lots of money, on the air all the time for weeks, you probably just need to pack it in. There’s time to change that dynamic. But it’s getting less and less likely anyone can.

So just what is that dynamic? This might be our third most important political fact of the week, but actually, it’s more likely to be at least one aspect of a larger “most important political fact of our generation”: the continued havoc being wreaked on our political status quo by the internet.

I have elsewhere discussed many aspects of that ongoing revolution, not least of which the massive increase in engagement, activism and voter turnout over the past 15 years. But every new medium brings its own stylistic demands. The TV era, for instance, brought an emphasis on sound bites, prepackaged blow-dried candidates and PC everything.

The internet era is annihilating that. Take the sound bite. How many times have you read a headline on the internet that was salacious and juicy, just to click the link and discover something very different? People hate that. But even more to the point, people click the link. They look for the substance. And then they debate it on Facebook or Reddit or wherever.

What people demand now above all else is authenticity. They experience it daily online, where even the nonpolitical get drawn quite frequently into political discussions. They expect honesty and straightforwardness and an ability to back up one’s point, and they expect all this to a degree that goes against everything the officeholders have been taught their entire careers.

Trump doesn’t talk like the officeholders: he doesn’t even know how. Neither does Carson. Fiorina and Cruz are right there with them. It’s not just a backlash against political correctness, though it certainly is that. And it’s not just “tough talk”: if that were all this took, Chris Christie would be king.

Every new medium creates casualties. Television killed a radio-optimized Richard Nixon in his famed 1960 debate against JFK. We’re having a year like that one now. The rules aren’t clear yet, and may not be for another decade.

But what is clear, in all three of these “most important facts,” is this: this is likely to be a watershed election, and not just in terms of policy or ideology or demographics or all the other things pundits prattle on about. The Earth is moving under the old order. That order won’t be “swept away” as some might hyperbolically postulate. But what’s left of it may look like San Francisco in 1906.

Rod D. Martin, founder and CEO of The Martin Organization, is a technology entrepreneur, futurist, hedge fund manager, and professor. Fox Business News calls him a “tech guru”, Britain’s Guardian labeled him a “philosopher-capitalist”, and Gawker describes him as a “brilliant nonconformist.” He was a senior member of PayPal’s pre-IPO startup team and is a member of the Board of Governors of the Council for National Policy.

 

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