Campaign cash floods in, while gold moves out
Gordon L. Weil
Political money mounts, funding falsehoods
The top tune of 2026 is the clink of campaign cash. Billionaires and large corporations support
candidates without limit so long as they are “independent” of the formal
campaign.
The Supreme Court decided that spending money is free speech. That means billionaires each get more speech
than an average person. It’s
questionable if that’s what the First Amendment means. The ruling transformed American politics, and
each election sees new campaign contribution records.
Small contributions matter, but not much. In Maine, Elon Musk’s money backs GOP Sen.
Susan Collins, whose campaign funds top Democrat Troy Jackson’s. In June, the Supreme Court allowed political
parties to freely pour money
into campaigns and has just cut their ad
rates (!). Trump’s PAC, after hoarding
its cash, just
committed to hundreds of millions for close races.
The obvious basis for political giving is that the candidate
with more money is more likely to win.
That candidate has more to spend on television ads and direct mail,
which make up the largest part of campaign spending.
Most voters likely form their opinions about candidates from
the ads to which they are relentlessly exposed, not the debates watched by dedicated
supporters. Most ads these days consist
of truncated truths or outright falsehoods about incumbents and challengers. Money promotes myths that make winners. Voters are victims.
But that’s not necessarily so, even if candidates keep asking
for more. In some campaigns, candidates
win, though they are greatly outspent. In
other campaigns, contributors back safe candidates, ensuring their loyalty and giving
them money to line up more backers.
Saturation may be the limiting factor. Television time is fully committed. Political mail readily becomes “junk mail.” Lawn signs?
More money cannot be justified
or it may even turn off some voters. Money
as speech may endure, but people may not like to be outshouted.
A message from the cellar
Deep beneath the Federal Reserve Bank of New York, gold bars
are stored in bedrock vaults. Most of
this gold belongs to other countries, whose governments have long thought that
the safest place for their gold, a part of their national currency reserves,
was in the U.S.
The New York Fed does not control the gold; it only protects
it. Most nations with significant gold
reserves, with the possible exception of the U.K., have kept some or all of
their gold in the Fed’s vault.
But that is changing.
Germany keeps only about a third of its gold in the U.S. France has taken its gold out of the
Fed. Last week, the Netherlands central
bank announced it had moved its gold either back home or to London. Other countries may be acting quietly.
Doubts grow about the U.S. as the world’s banker. Trump attacks the independence of the Federal
Reserve, the U.S. central bank, reducing respect for the dollar as a reserve currency. This week, the Norway state fund, the world’s
largest, announced it is sharply reducing its U.S. Treasury holdings.
Trump exceeds understandings about the limits of power, weakening
confidence in the Fed. He might suddenly
seize other countries’ most precious financial asset in retaliation for their
not supporting his Iran war. It seems safer to take the bars out of the Fed’s
cellar.
AI and its limits
In the previous column, I mentioned a Wall Street Journal column
by investor Stanley Druckenmiller. A
report about it suggested that the writer may have had the help of AI.
This was one more sign that AI is penetrating American life,
potentially affecting important communications.
In several cases, courts have found that lawyers let AI draft a brief,
which included citations to phony cases.
College students are having AI write papers for them, and professors must
use AI review programs to search for AI.
New York City Mayor Zohran Mamdani and the head of the city’s
schools have blocked the use of AI by elementary school students. “Children need teachers and human connection
in order to learn and grow. They need to develop skills alongside their peers,
build relationships with educators and wrestle with tough problems on their
own,” said the mayor.
School chancellor Kamar Samuels noted, “We’re putting
guardrails in place to protect the human connection, curiosity and creativity
that help children grow.”
AI can usefully supplement human research, but these challenges
suggest it should not be allowed to replace HI – human intelligence. If it does, the country will end up with a population
that is less educated, articulate and literate. The AI-based jobs that will displace rote
tasks may go unfilled for the lack of educated personnel. Automatons won’t do.
AI could get out of control.
Government has a role in protecting people, not simply promoting data
centers.
For the record, this column is neither written by nor edited
by AI. Its defects are all mine.
