A week ago, New York City Mayor Michael Bloomberg reported that he had raised (from himself) $85 million dollars, while opponent William C. Thompson had raised about $9 million. And yet Thompson, an uninspiring candidate with no message and no real base, came within four percentage points of defeating Bloomberg.
What is the big lesson here? Certainly it's that Bloomberg was more vulnerable than most recognized, especially all the potential candidates who were so intimidated that they not only gave up their candidacies but even backed his scheme to undo term limits. But more significantly, it is further proof of a rule of thumb in campaign finance that is often forgotten: After a certain point, more money doesn't do you any good. (Political scientists Jonathan Krasno and Donald Green showed this in a 1988 paper I can't find online.) There are rapidly diminishing returns to greater spending, as self-financed candidates before Bloomberg, whose names you might not remember because they lost, have found.
A corollary is that, to run a viable race against a big-spender, a candidate doesn't need to keep pace, but just has to reach some threshold of viability. It's hard to know exactly where that is, but it's a reasonable guess that Bloomberg's previous opponents, Mark Green, who raised and spent $17 million in 2001, and Fernando Ferrer, with $10.5 million in 2005, probably reached it, which is to say, money wasn't the main factor in their losses. (That's still a lot of money: the average successful Senate candidate in 2008 spent $8 million.) The great thing about New York City is that it is comparatively easy to reach the threshold, because of the campaign finance system that provides a public match of 6:1 on small contributions. So Thompson got, as of October 23, $3.2 million in public money; Ferrer had $4.3 million in matching funds.
As for diminishing returns, it's easy to see why more money doesn't matter -- there's only so much you can do. Once people have seen your TV ads or heard your radio ads a dozen times, another two dozen are only going to annoy them. Bloomberg seems to have engaged in a very creative experiment to see whether he could defeat the law of diminishing returns -- rather than mere robo-calls, his campaign came up with a scheme of precisely targeted calls, so that you might get a recorded call from your own building manager, or a call precisely keyed to language -- older immigrant voters might get a call in their language, younger voters in English with an accent!
It's brilliant, and expensive, but robo-calls don't work (another fact proven by Don Green!) and so it should come as no surprise that micro-targetted robo-calls don't work either. The only thing Bloomberg's $85 million campaign did was keep a lot of campaign consultants off the streets.
-- Mark Schmitt