When billionaires throw money to influence US elections

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Among the rich list, there’s one who’s made their way into the spotlight this election cycle: Elon Musk, whose  fortune was estimated at $270.3 billion (October 1, 2024).

They are power players, members of America's financial elite pulling the strings of US politics. Each one a powerful influencer, their support is poised to tip the scales in one of the most financially-charged elections in US history.

Here's a closer look at billionaire donors:

Over the past few weeks, the CEO of Tesla and Space X has been assisting the Trump campaign financially through his America PAC, as well as in-person at campaign rallies.

Billionaire spending on the 2024 US election campaign has already reached record highs, with estimates showing that donations from ultra-wealthy Americans are likely to exceed previous years by billions.

As of early October 2024, super PACs and outside spending groups have contributed approximately $2.6 billion to the campaign, according to the Washington Post. The blog OpenSecrets projects that total spending for the 2024 election will reach around $15.9 billion, surpassing the 2020 election’s $15.1 billion – even before adjusting for inflation.

Musk factor

Is the billionaire’s exposure good or bad for Trump?

Musk’s involvement with Trump – and whether or not the billionaire is helping or hindering the former president’s campaign – has been sliced and diced by US political pundits.

A survey of Yahoo Finance users from all political backgrounds was made this past week to investigate the question: “Does Elon Musk’s support for Donald Trump make you more likely to vote for Trump or less likely to vote for Trump?”

While 25 per cent of participants in the survey said Musk makes them more likely to vote for Trump, 28 per cent said Musk would make them less likely to vote for Trump.

Survey results were highlighted in the latest episode of Capitol Gains, hosted by Rachelle Akuffo, Washington Correspondent Ben Werschkul, and Yahoo Finance senior columnist Rick Newman.

“Part of the takeaway here is to be careful which billionaires support you,” Newman says. “Elon Musk's involvement with Donald Trump doesn’t seem to be an obvious asset for Trump.”

Undecided

When isolating undecided voters, 21 per cent said Musk's support made them more likely to vote for Trump, but 28 per cent said it made them less likely, creating a seven-point net negative effect.

The Democratic polling group Blueprint also conducted research on young men (ages 18–29), a demographic Kamala Harris has struggled to reach, where Trump holds an advantage.

High-profile endorsement

This group indicated that Musk’s involvement slightly reduced their likelihood of supporting Trump, suggesting that high-profile endorsements may not have a universally positive impact.

As both Trump and Musk are known for their strong, distinct personalities, their alliance may influence Republican voters still undecided.

Swing states 

In a close race focused on key swing states like Georgia, Pennsylvania, Michigan, and Wisconsin, even slight shifts in undecided voter preferences could be pivotal in the final days.

Billionaire involvement in politics is not new, but the 2024 campaign has elevated it to a higher pitch, highlighting the influence exercised by this select group.

Musk has been vocal about his political preferences. His wealth gives him the potential to deploy resources that amplify messages favoring his political stance.

Other billionaires like Thiel and Harlan Crow have also strategically invested in campaigns, political action committees (PACs), and candidates who align with their ideological views. This influx of capital has significant implications: as candidates backed by these influential donors gain access to resources, media platforms, and visibility beyond what grassroots support typically provides.

Ideal vs reality

Ideally, democratic elections are designed to give every voter an equal voice. The presence of billionaires backing candidates could disrupt this balance, raising concerns about the health of US democracy.

Skewed representation:

When billionaires contribute heavily to campaigns, they can overshadow grassroots donors and voter-driven support. This imbalance means candidates may prioritise the interests of their major donors over the general electorate, creating a system where policy choices are influenced more by wealth than by widespread public support.

Policy capture:

Large donations often come with expectations. Billionaires contributing significant sums may expect their interests to be protected or promoted through policy decisions. For example, tech moguls may push for deregulation, lower taxes on capital gains, or relaxed antitrust laws, which may serve corporate interests rather than the public.

Public trust:

When voters perceive that billionaire-backed candidates are primarily beholden to the interests of their top funders, trust in the electoral process diminishes. This skepticism can reduce voter engagement, as people feel their voices hold less weight compared to powerful donors.

The road ahead

There is a growing call for campaign finance reform to counteract the influence of wealthy donors. Solutions could include:

Donation caps: Implementing stricter limits on individual contributions could help level the playing field.

Increased transparency: Mandating disclosure of all donations, especially to PACs, could allow voters to see who is financing a campaign and why.

Public campaign financing: Encouraging public funding for candidates could make campaigns less reliant on private wealth and help restore public trust.

As billionaires exercise outsized influence, it becomes essential for policymakers and voters to address the challenges this trend presents to fair and representative elections.

Campaign finance reform, transparency, and efforts to curb excessive wealth-driven influence may be necessary to ensure that democracy remains a government “by the people, for the people” and not one shaped by the wealthiest few.