HRC lends her own campaign $5M; Obama responds

… by *raising* $5.7 million on the Web in 24 hours.

It came out this morning that Hillary Clinton had lent her own campaign $5 million. Maybe that’s why Clinton futures are down 20 points on the day, currently 43 cents.

Or maybe it was the fact that, in the 24 hours after the polls closed in California, Obama campaign raised $5.7 million. (Naturally, it took David Plouffe about a nanosecond to send out an email to the donor list urging Obama’s friends to “match” HRC’s self-funding effort.)

Skipping right over all the subprime jokes, what does this mean operationally? (I’ll leave the ethical angle for another post.)

It means that the Clinton campaign wasn’t even able to maintain the level of operations it deployed for Hyper Tuesday &#8212 noticeably less than Obama’s &#8212 out of cash on hand. January, as all know, was a rotten fund-raising month for HRC, with only $13m (not counting the self-loan) coming in, compared to Obama’s $32m.

As has been pointed out before, Obama is adding new donors at a fast clip (170,000 in January) and has raised less than 1/3 of his money from people who have “maxed out” the contribution limit of $2300. Clinton, with fewer donors and more of them maxed out, is likely to find it impossible to keep pace.

If yesterday had been the Clinton blow-out it looked as if it would be two weeks ago, the presumptive nominee would have had no problem raising that $5m, and a ton more, from loyal Democrats and people buying access to the next President. But it wasn’t. So now that debt sits there, telling any potential donor not just buying access “We don’t promise to put your money into campaign operations; it might go to pay back the candidate.”

And while there’s more where that came from, it’s not clear how much of Chelsea’s inheritance Billary really wants to put at risk in what may well turn out to be a losing venture. So the loan just reinforces the idea that the financial wheels are coming off the Clinton juggernaut. For once, it may be the “regular” who can’t keep pace in the money race with the “insurgent.” And yet, precisely to the downscale voters who make up HRC’s base, the notion of a candidate who can just “lend” herself $5 million isn’t likely to seem compatible with the notion, floated by Mark Penn this morning, that Barack Obama is now the “establishment” candidate.

Obama’s $5.7 million haul in 24 hours, compared to Clinton’s plea to her supporters to raise $3 million in the next three days, raises the prospect that, contrary to what everyone analyzing the Super Tuesday standoff has been saying, this won’t go all the way to the convention simply because the Clinton campaign may not be able to afford it. It might not even go all the way to Pennsylvania.

Atrios asks the obvious question: Why can Obama, but not Clinton pull in this sort of money over the Web? Partly the answer is that Obama has lots of prosperous supporters, who can afford to give to a candidate who inspires them and who &#8212 since they’re on line a lot and used to making Internet credit-card purchases &#8212 can be mobilized to do so over the Web rather than by “bundlers.” The Clintons have lots of rich friends, not to mention people who would like to get rich with their help, but it’s harder for a candidate with a downscale base to raise money the way Obama does.

But the other part of the answer is the Obama really has succeeded in building a movement, not just a campaign. In some ways the defining fact about the Obama campaign is that its best fundraising day ever (before today?) was the day after Obama lost New Hampshire.

It’s hard to stop an organization whose supporters are energized by defeat as well as victory. HRC does not have such an organization.

Update Since I first posted this a a couple of hours ago, Obama’s haul has hit$6.5 million. For the day. Reportedly HRC also had her best fundraising day ever. She brought in less than half that much.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: