March 26, 2017

Why Politicians Are Rich

Among the top 10 self-funding Senatorial candidates, only 2 remain as candidates, whereas the other 8 candidates have already been defeated. What is interesting to observe here is that none of the top self-funders are incumbents, which leads to a digression of why politicians are often wealthy. Since most incumbents have established bases to receive contributions from, such as constituents or Political Action Committees, incumbents have more financial support from others than newcomers. Additionally, incumbents often fundraise during their tenure, whereas newcomers usually begin fundraising about 10 months before an election. Therefore, newcomers to politics must either have an extraordinary ability to raise money or the willingness to spend a lot of their own money, with the former being more common. Over simplistically, it takes a lot of money for newcomers to compete with incumbents. While there are some additional aspects of why politicians are wealthy, the chart below shows how the initial start-up fee is certainly a reality.

The 2 remaining candidates of the top self-funders are both former CEOs.

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