Money Elections, Ditka, & Finance Fraud
Did an interview with bank, Wall Street analyst, and old friend Chris Whalen on Friday and had dinner with him last night. Chris knows history, too few these days, less than ever. I met Chris twenty years ago with an introduction from Bill Greider, who knew Chris’ dad, Richard Whalen, author and one time speech writer for Mistah Nixon.
Chris knows a lot about banking and mortgages, he’s also author of a number of good books. Best, out of school he worked for the NY Fed, brought in by none other than Paul Volcker I discovered last night. That was a different financial era.
It was nice catching up. He got me to talk about elections, which I don’t do much anymore, why would you really? I’ve pulled a couple parts, but you can find the whole talk here:
The IRA: Politics has gotten to be like a bad cartoon. We grew up watching the Republican side of the equation with Richard Nixon, Gerald Ford and Ronald Reagan. Tell us what you think is happening and what's going to happen in November.
Costello: If it was 30 years ago, November would just be a washout for the GOP. The Republicans would be killed. But I was just looking at the polls yesterday, both the parties are amazingly unpopular. Each one with a certain segment of the other’s base, especially unpopular, but then also, just generally very unpopular. So I don't know how that's going to play out. Since 1974, there's been three 50-seat House swings.
The IRA: President Trump is on the campaign trail, trying to get out the base. Is that a positive or negative for Republicans?
Costello: I think a lot of Republicans are going to sit at home. One thing I know for sure about American politics is that we should focus on the things that unite us. One of the things that unite us is Americans hate high gas prices. I mean, they hate it more than anything else. Is anything going to bring the price of gas down between now and the election?
The IRA: No, the Trump/Netanyahu war with Iran will probably means higher energy prices for years to come, especially gasoline, diesel and other refined products and also food. Prices for fertilizer, for example, are up dramatically and will probably cause crop yields to fall in 2027. We’ve laid this scenario out in gruesome detail with our friend John Dizard. How does the issue of affordability impact the elections? Does the Republican advantage in cash matter?
Costello: Money has limited utility. In 2020, the Democrats spent $60 million trying to unseat Senator Susan Collins in Maine. They ultimately left $10 million on the table because they couldn't buy any more commission-based advertising. They left $10 million on the table and they lost. The Democrats got 350,000 votes with $60 million. Last cycle, in 2024, with Senator Jon Tester in Montana, the Democrats spent $100 million on that election, got 250,000 votes and lost to Republican Tim Sheehy.
The IRA: Those are two striking examples. Does money matter or is the decisive factor something else?
Costello: That's the system. In the 1980s, the fundraising people never had a lot of political clout. Just go raise the money, don't tell us your political stuff. But now everything's run by who raises the money. Look what happened in 2024, there was a donor-coup against Biden. I always told people that you just got to raise enough money to do what you need to do. You don't need to raise any more than that. More money doesn't matter. Attack ads have limited impact. People get overloaded with this stuff. So it's very hard to kind of crush someone just with a bunch of 30 second ads. It's kind of like air-bombing Iran. But if you don't have enough money to do what you need to do, then the money advantage is really going to kill you. It's always nice to have more money than the other guy, but you don't need it to win.
Coach Ditka has left the field. He was a funny SOB and of course there was '86. As always and forever, Go Bears!
We talk plenty about political corruption, but really, it pales in comparison to finance. I recently ran across this fellow Ed Elson, does the heart good seeing a young person getting to the nut. Too little attention is paid to the complete uselessness of the SEC, old Joe Kennedy spins violently in his grave.
Finally, below is a club packed with SoCals listening to that little Sicilian guy from New York City laying Pipeline down Sunset – Surf’s up, dudes! Say what you will about the US, but it had its moment in that last half-century, though should have been a lot more than that.