What motivates campaign donations? Discussions of campaign finance reform are dominated by a private interest theory, that donations are in trade for favors. Here donations in support of interests besides yours are bad news; they says the candidate has implicitly promised to help those interests at your expense.

The main alternative is a public interest theory, which says we donate to signal private info about candidate quality. Under this theory people who get private info suggesting a candidate would be good at promoting the general public interest donate money to signal confidence. Here campaign donations are good news. Now consider that Big Donors Drive Obama’s Money Edge:

The record-shattering $150 million in donations that Sen. Barack Obama raised in September represents only part of [his] financial advantage. … [It] is compounded by Obama’s ability to continue to raise money through the election because he decided not to participate in the federal financing program. McCain opted in, meaning he received $84.1 million in federal funds to spend between the Republican National Convention and Nov. 4, and he must rely solely on the Republican National Committee for additional financial support. … The Democratic Party created a separate committee to capture millions of additional dollars from individuals who had already given Obama the most the law allows and who had also anted up $28,500 to the Democratic National Committee. … The Committee … has become a vehicle for ultra-rich Democratic donors to distinguish themselves from the 3.1 million others who have put $600 million behind Obama’s presidential candidacy. … Only a quarter of [this] has come from donors who made contributions of $200 or less. … That is actually slightly less, as a percentage, than President Bush raised in small donations during his 2004 race.

Obama supporters seem to have these alternatives:

Reject the private interest theory, and thus reject campaign finance reform, or Accept the private interest theory, and A. See Obama’s donors as an unusual aberration, or

B. Agree this is bad news, but see enough other good news about Obama, or

C. See this as good news as they share private interests with Obama’s rich donors.

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