Confounding Stereotypes

It is customary to paint the Republican Party's financial backers as sober, grimly realistic green-eyeshade-wearing accountants, carefully weighing every proposed contribution against each potential benefit, whereas Democratic loyalists are often seen as free-thinking dreamers, seeing things that never were, and asking why.

In fact, as the chart to the right indicates, the reality is much more complex. Contributions to Democratic Party candidates for the Presidency track almost exactly with overall popular support, representing a congruence of political support and financial backing which would be completely comprehensible to any risk-management actuary.

The Republicans, on the other hand, present us with the deep pockets and deeper imagination of those backing Romney to the tune of $20 million in the first quarter while his political support remains mired in the single digits with a downward trend the closer Fred Thompson comes to entering the race. Hopefully this was all just mad money from comfortable coupon-clipping former clients from Romney's banking days, and not an historic incident of highly misguided value-investing principles. The discounted value stream from an investment in Nigerian inheritance scams seems approximately equal to an investment in a Romney administration at this point.

On the other hand, they do call it the Stupid Party for a reason.