How Much Will Money Matter?

So far this week, the big presidential campaign news is Mitt Romney’s massive fundraising haul for the month of June. The Romney team raised $106 million last month, out-raising President Obama by $35 million and besting Democrats for the second month in a row. There are important asterisks to the GOP gains—in particular, a large portion of this money has been raised for the technically ongoing primary, and can't be spent until after the convention—but it’s still impressive. If the Romney team can sustain this pace—it’s possible they’re collecting low-hanging fruit, and the numbers will drop off later—then it will have a large financial advantage in the fall. But how much does that actually matter?

The Obama team wants you to believe that fundraising could be the deciding factor in the election. In an email to supporters, campaign manager Jim Messina warned, “The gap is getting wider, and if it continues at this pace, it could cost us the election.” In the same email, Obama adds that “We can win a race in which the other side spends more than we do, but not this much more.”

The problem with this picture is that the jury is out on the question of money’s effect on a presidential election. Obviously, if you don’t have the funds to air advertising or run a get-out-the-vote operation, you’re in trouble. But at a certain point—particularly in presidential elections—it’s not clear whether an advantage or disadvantage means anything for the final outcome.

I emailed political scientist Brendan Nyhan, an assistant professor of government at Dartmouth College, for this thoughts, and he offered a little skepticism. “I tend to think the effects of money in politics are overstated,” he wrote. “The reason is that campaign donors are strategic—candidates who are likely to win are more likely to attract funds, which means that the apparent correlation between funding advantages and winning can’t be interpreted as causal.

“Also," he added, "much of the money that is raised goes to TV ads that have short-lived effects and tend to cancel each other out in competitive races." In a recent post, the Monkey Cage's John Sides made a similar assessment: "The effect of ads seems to dissipate quickly, even within a week. So you may not need to think about the effects of ads for another 3+ months." Put another way, we essentially have to wait until just before the election to start thinking about the effectiveness of ads on voting, because those effects are so fleeting.

There's also what Nyhan calls the "marginal benefit of campaign funds"—the more money you spend in an election, the lower the benefit of each additional dollar. With the large amounts that will be spent in this campaign, an extra hundred million dollars on either side won't make a significant difference.

With all of that said, Nyhan offered a few important caveats. First, anything can matter in a close election. It’s unlikely, but still conceivable, that a few extra television ads in a few more states could mean the difference between victory and defeat for Obama. Moreover, we’ve never seen a situation where the incumbent president is outspent by his opponent. This is unexplored territory, and the possible effects of that difference are unknown. By virtue of being the incumbent, Obama is already well-defined in the eyes of the public. If this were an open election, spending money to “define” him would make sense. As it stands, it might be something of a waste (though not, of course, for Romney's campaign consultants).

When it comes to messaging, Obama doesn’t actually need a fundraising advantage. By virtue of being the president, he has the ability to shape the national conversation—something he’s recently used to great effect. The fact that he can shift the agenda to same-sex marriage, immigration, or health care means far more than Romney’s money advantage; regardless of how much he raises, Romney will inevitably fight some of the election on the president’s turf.

For Romney, there is one clear benefit to a money advantage: He could invest more resources into his ground game. The ability to mobilize and turn out your voters can mean the margin between victory and defeat, or the difference between a narrow win and an impressive landslide (see the 2010 midterm elections). But again, a campaign will eventually run into diminishing returns. Even with a billion dollars in the bank, there are only so many volunteers you can train, so many neighborhoods to canvas, and so many places where you can find and persuade new voters.

Given the huge amounts that will be raised on both sides, odds are good that money will have a marginal effect on the outcome of this election. The presidency will largely be determined by the fundamentals: unemployment, economic growth, the incumbent’s approval rating. At this point, as I argued yesterday, the fundamentals still favor Obama. Mitt Romney, Karl Rove, and the Republican Party can spend billions; it won’t change the fact that it’s simply unusual for an incumbent president to lose reelection when there’s positive economic growth (even if it isn’t enough to bring the economy to where it needs to be).

If you want to know where money will have its greatest effect, look to congressional elections. A few million dollars in a few states can—and likely will—mean the difference between the status quo, or an ability to direct the nation’s agenda.

Comments

If money doesn't matter then why is Obama freaking out about how much Romney has collected?

That annoys me, as a donor to his campaign. I would hope the campaign has a better plan than matching Rmoney dollar for dollar. Handled right, being outspent should be able to be spun positive, as in " my opponent is outspending me 3 to 1. He seems to think the election is his to buy."... At some point, the sheer excess of spending could provoke a backlash. I think this article is right, there's a point of diminishing returns, and money is no substitute for good strategy and good messaging.

Recall what happened to Newt in Florida after his huge success in South Carolina... and the state of the nation's economy makes Obama such a vulnerable target!

Jamelle: Barack Obama's 2008 campaign set the standard for fundraising. Obama is the Tiger Woods of politics. Woods did things no other golfer ever had done, even Jack Nicklaus was amazed. Barack Obama made political people realize that $1 Billion for an election campaign was achievable and would not necessarily be perceived as buying an election. If Romney & SuperPACs do outraise and outspend Obama he has no one but himself to blame. He was the first Presidential candidate to refuse public funding and the spending limits that go with that. "Hoist by his own petard", Will Shakespeare. Serves him right.

It will matter ONLY to the loser!

Obama won't be outspent in the handful of states where it matters. And he's had staff on the ground in all those states months ago.

Plus, it seems the GOP strategy is throw all sorts of messages against the wall an see what sticks, while Obama has fond a message that does work and is repeating it over and over in the swing states.

And one more thing... the Electoral College is still very much in Obama's favor.

But, but, but, no... This can't be right. Hasn't it been an article of faith among liberals for the last 40 years that money in politics is corrupting? Wasn't that the reason for imperative of public funding of campaigns? Isn't that the reason that the Citizens United decision was a sign of the apocalypse?

If money isn't that important, doesn't that undercut one of the most important things that all liberals have known forever?

Please, say this was just a joke!

The article didn't say "money isn't that important", it said that beyond an adequate amount of it, money is _less_ important.

E-Verify ‘The Legal Workforce Act’ (H.R. 2885) although just voluntary at this time, is an electronic program operated by the Social Security Administration and Customs and Immigration Enforcement. —The last entity I would listen too is the Liberal Press, who have transferred their loyalty to hard core radical people like socialist George Soros? The mainstream media Editorial reeks of deceit and rhetoric, when it comes to illegal immigration. The progressives in the news media are especially dangerous. The liberals will lie and cheat, no matter the consequences to America. So it is with E-Verify, which they have demonized because, it actually flags illegal immigrants in the workplace and opens up jobs for U.S. citizens and residents. The liberals have been very predominant in using the influence of the press, to erect a barrier against Mandatory E-Verify, except they didn’t reckon on the growing masses of the TEA PARTY. Unlike the two main political parties the TEA PARTY will enforce all laws and statutes pertaining to illegal immigration, whereas the Dem’s and GOP tend to intentionally overlook such state ordinances as Sanctuary Cities and states like California?

I THINK DEMOCRATS OR REPUBLICANS ARE UNDER THE IMPRESSION THAT THE TEA PARTY WILL HAVE NO REAL INFLUENCE IN THE OUTCOME OF THE PRESIDENTIAL ELECTION? BOTH PARTIES WILL BE PROVED WRONG?

REMEMBER THE TEA PARTY WILL ENFORCE ‘THE PEOPLE’S’ LAWS. THERE WILL BE NO PLEADINGS FOR ANY CRIMINAL ILLEGAL ALIEN, NO OBAMA BACKDOOR AMNESTIES, NO DREAM ACTS, NO SANCTUARY CITIES, NO CHAIN MIGRATION. E-VERIFICATION WOULD ALSO BE FULLY ENFORCED WITH STRINGENT PUNISHMENT, FOR THOSE WHO DON’T COMPLY? POTENTIAL PRESIDENT MITT ROMNEY BETTER STAY AWARE OF THE ‘TEA PARTY’ EMPOWERMENT, AS IF HE THINKS OF PLAYING ALONG IN THE ILLEGAL IMMIGRATION ISSUE, HE WILL BE RECOGNISED AS A FLIP-FLOPPER.

Even the House Speaker John Boehner has refused to bring up compulsory E-Verify for a House vote. Obviously he and his entrenched colleagues will not allow it anywhere near the Congress, as he and his fellow conspirators are subject to the corporate donations, to keep the old school corrupting our system of government. E-Verify is just one bill that must be passed to save the jobs of millions of low income Americans mainly.

The Independents, and uncountable numbers of delusional Democrats, Republicans are recognizing that the Lib-Democrats are out to win the grand price in November, but now millions of TEA PARTY people will not fall into their political trap. This is the same with photo ID to vote, who have ruthless personages as U.S. Attorney General Eric Holder and the Kings court caterwauling ‘voter Suppression’, when all the TEA PARTY requests is a fair and equitable election. Surf the internet under ‘Voter Fraud’ and you will discover the hundreds of cases of this diabolical use of our most trusted right of American citizens, being compromised by NON CITIZENS, felons and illegal aliens. This began with inception of canvassing provided by ACORN organization, which signed up just about anybody and were eventually caught and 11 states are resolving this criminal issue.

Another law that remains quietly concealed from the public is the Rep. Steve Kings THE BIRTHRIGHT CITIZENSHIP ACT (H.R.140). An astronomical amount of money is being extracted from every taxpaying American that supports the annual arrival of an estimated 400.000 smuggled babies into the United States. They are concealed in their Mother’s womb and once here becomes the taxpayers charge. These females although illegal that once they set foot on American soil, their offspring receive a free delivery, free heath care and a free education, thanks to unfunded mandates handed down by the courts. The only salvation from this misjudged law is to amend the 14th amendment, which an only child with one citizen parent qualifies for instant citizenship. Illegal alien parents are well aware that if they smuggle the unborn child through an international airport terminal or past the U.S. Border Patrol, they are free and clear as the misguided law stands today.

With only four months to go before D-Day us the voter only has that one slender chance of changing the direction of our country. With the democrats cocooned with the Liberals, the only promise is uncontrolled ‘Tax and Spend’ so elevating the 16 Trillion dollar deficit we owe the rest of the worlds investors. Then under the Republicans, a lesser of the evils, but even so they must be controlled by the TEA PARTY LEADERSHIP.

Anybody who contradicts the writings in the U.S. Constitution, who is adverse to a real border fence, who is unconcerned about the 20 million plus illegal aliens already here or the harbinger of a further invasion from Central and South America needs to be relieved of their seats in Washington, not excluding the majority of legislators in Congress, state governors as Deval Patrick of Massachusetts, Jerry Brown of California, and Mayors as Rahm Emanuel of Chicago, Antonio Villaraigosa of Los Angeles—all must be replaced by TEA PARTY MEMBERS. All the pro-illegal immigrant law makers are destroying this sovereign country, as they are well aware that illegal aliens vote. That is why Americans, Hispanic, Latin, Black, White Asian and others should join one of the thousands of local chapters of the TEA PARTY. They should be ready to oversee the elections, including the rampant fraud in the absentee ballot. Around the country the election rolls are crowded with the names of the deceased, others who have moved to a different state. There are many ways our most sacred of rights have been compromised and only the citizen voter can change it.

Remember under Obama Imperial court we will be paying not only for any person who illegally ventures here, but for millions of Americans who have found it easy, to just live of the taxpayer. Beneath our feet is abundance of wealth in oil, natural gas and coal for energy that President Obama denies us. Those trillions of dollars in excess gallons of crude oil could clearly go to replenish state treasuries and the remainder could be sold to our friends in other countries. Under Obama and decades of environmental zealots, we have not been cut off from our own resources, relying on governments abroad that hate us. Even the abundance of oil from Canada is better than dealing with foreign potentates.

So much is at stake, the status quo or probably the whole integrity of a group just for the price of a small difference in collection from fundraisers. It makes you realize how putting it all for a whim and luck is just not the most wise thing to do if you really have the eye for the ball. CRM Software

One word to think about: DVR. This year a lot more people have them than did in 2008. My 70-something parents rarely watch shows in real time, they'll wait at least 20 minutes so they can skip over the commercials as we all do. Since TV advertising is one of the biggest things on which politicians can spend all their campaign funds, DVRs could lower the point of diminishing returns.

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