So Barack Obama continues to raise millions upon millions of dollars, and if he wins the election a lot of people will certainly attribute his victory, at least in significant part, to this money.
But should they?
We addressed this topic in Freakonomics. Our argument was based on a clever piece of research by Steve Levitt (scroll down to “Using Repeat Challengers …”) in which he analyzed legislative races in which two opponents ran against each other more than once. Here’s why it was clever:
If Candidate A wins by 20 points and outspends Candidate B by 50 percent, it might be natural to assume that it was the money that made the difference. But how do you really know? It is hard to separate a candidate’s natural appeal from the appeal that is created by spending money on organization, ads, etc. So by measuring repeat challengers — i.e., races in which the candidates’ natural appeal stayed more or less constant — Levitt was able to isolate the impact of the money.
Here’s how we wrote up the results:
[T]he amount of money spent by the candidates hardly matters at all. A winning candidate can cut his spending in half and lose only 1 percent of the vote. Meanwhile, a losing candidate who doubles his spending can expect to shift the vote in his favor by only that same 1 percent.
What really matters for a political candidate is not how much you spend; what matters is who you are.
Now of course you could argue that money can help change voters’ views of who a candidate is. Isn’t that the purpose of the standard campaign TV ad? (Actually, most of the ads these days seem to want to change voters’ views on the opponent, but that’s just the flip side of the same coin.) And a recent tally of Obama’s spending shows that he has spent $160 million on TV ads, easily dwarfing every other expenditure. Staff salaries, for instance, were $44 million; campaign events cost $16 million.
Now comes word that he spent $21 million on TV in the first week of October alone, and is buying up prime-time network space at the end of October to run a 30-minute infomercial.
As I wrote above, this spending will probably be seen as central to Obama’s victory if he wins. But our argument is that money is more a symptom of a winning campaign than a cause.
In other words: it’s not that raising a lot of money helps a candidate become more appealing and therefore do better; it’s that better candidates raise a lot of money because they are so appealing. Just remember: about a year ago, Mitt Romney was loaded and John McCain was just about broke. If money is so central to elections, why couldn’t Romney put McCain away? And how on earth did McCain end up winning the G.O.P. nomination?
It’s also interesting to note that Obama is using the media — well, buying the media, in the case of the infomercial — to get his message across, while part of McCain’s campaign message is that the media itself is the enemy. The antagonism between the McCain campaign and The Times in particular has been operatic. According to Politico.com, the McCain campaign views The Times as “a partisan rag.” Here’s what McCain senior adviser Steve Schmidt had to say:
Whatever The New York Times once was, it is today not by any standard a journalistic organization … It is a pro-Obama organization that every day attacks the McCain campaign, attacks Sen. McCain, attacks Gov. Palin, and excuses Sen. Obama.
The McCain/Palin anti-media attitude that was given full voice at the Republican convention continues to play out on the campaign trail. Consider this Washington Post report from a recent Palin campaign event:
Palin’s routine attacks on the media have begun to spill into ugliness. In Clearwater, arriving reporters were greeted with shouts and taunts by the crowd of about 3,000. Palin then went on to blame Katie Couric‘s questions for her “less-than-successful interview with kinda mainstream media.”
At that, Palin supporters turned on reporters in the press area, waving thunder sticks and shouting abuse. Others hurled obscenities at a camera crew. One Palin supporter shouted a racial epithet at an African-American sound man for a network and told him, “Sit down, boy.”
But this doesn’t mean the McCain-Palin campaign has nothing to gain from the “partisan rag” media. McCain and Palin have both made good use of a report in The Times exploring the relationship between Obama and onetime domestic terrorist William Ayres.
So what is the right way to think about the relationship between money, the media, and campaign outcomes? Is it wise for Obama to spend so much on media? Is it wise for McCain to risk alienation of the media? Would all that money and energy be better spent on something else?
There may be some wisdom to be gleaned from a strange incident in the not-too-distant past in Peru. A few years ago, the economists John McMillan and Pablo Zoido wrote a fantastically interesting paper about Vladimiro Montesinos, who ran the Peruvian secret service under President Alberto Fujimori.
Montesinos was extremely corrupt and brazen. Not only did he routinely bribe anyone who could help Fujimori maintain power — more than $3 million a month went to judges, police officials, opposition politicians, and TV station owners — but Montesinos also kept ledgers of these bribes and even videotaped the transactions. Sadly for him (but good for McMillan and Zoido), Montesinos was busted, and the economists were able to analyze the bribe data.
Of the four main categories of bribe beneficiaries — police, judges, politicians, media owners — whom do you think Montesinos paid off the most?
Here’s the answer, as summarized by Richard Morin in The Washington Post:
It wasn’t even close. “One single television channel’s bribe was four times larger than the total of the opposition politicians’ bribes,” [the economists] found. “By revealed preference, the strongest check on the government’s power was the news media.”
So while Obama may be wasting millions of dollars in general, at least it seems he is wasting them in the right direction. As for McCain: well, it’s not too late to start sending out a little something to your friends in the media.
[Note: I'll be discussing this topic early tomorrow morning on The Takeaway.]
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correct me if I’m wrong. But republicans complaining about the press not being on their side (or at least impartial) is a bit hyprocritically seeing as Fox news still exists.
‘…an appearance in a documentary-style program on the Fox News Channel watched by three million people last week thrust the man, Andy Martin, and his past into the foreground. The program allowed Mr. Martin to assert falsely and without challenge that Mr. Obama had once trained to overthrow the government.’
Then this is defended by the claim that he was expressing an opinion(?!). Ok, so it is an opinion as to whether Obama trained to overthrow the goverment. Please explain to a simpleton how that can be an opinion? he either did or he didn’t.
If thats an opinion and can be debated, its my opinion that is/did .
The media cover Obama because he is popular. If you’re popular, people watch you. If people watch you, then they might watch the ads. If they watch the ads, they might buy the products.
So basically it comes down to ads. Obama can outspend McCain on ads. But the media has given McCain a leg-up by playing his ads.
In fact, the press has been overly nice to McCain. This is hardly disputable.
From FAIR.org:
Obama’s apparently innocuous connection to corrupt fundraiser Tony Rezko received extensive attention, while McCain’s lead role in the Keating Five savings and loan scandal is treated as old news and generally ignored by the press…
it is difficult to find even one subject where the press has truly held McCain’s feet to the fire while giving Obama a break from scrutiny. If corporate media are in love with Obama, they sure are picking a funny way of showing it.
What this article really demonstrates is economists’ hubris. There is an entire field of study, including much excellent research, on the effects of cognitions on human behavior; behavior like voting.
We are expected to believe, I suppose, that advertising does little to help sell products?
Advertising clearly, clearly works. Naturally, the basic fundamentals of the product (in this case, the product is the candidate) play a role in buying/voting behavior, but it is advertising that defines or redefines those things in the public mind.
1% seems like an absurdly low result. I propose this thought experiment as a test:
Suppose Candidate A has little name recognition and very little press coverage. Now suppose that his opponent, Candidate B, is fairly well known. Assume B spends an average amount of money while A spends almost nothing. I think it would be safe to say that candidate A would absolutely lose the race. Wouldn’t it make sense that personality and charisma won’t do you any good if you can’t get exposure? It takes money and/or controversy to get exposure in today’s media world, and without money, a little known candidate doesn’t stand a chance.
Perhaps the appropriate conclusion to draw from the study would be that campaigns are overspending and horribly innefficient if a winner can cut his spending in half and only lose 1% of his votes. I imagine there is an optimum level of spending versus exposure for each candidate, and it would depend on the name recognition of each.
One must admit, though, it takes alot of work and money to reach the tipping point of being perceived as appealable.
The Romney counterexample doesn’t hold any water. The primaries are fought state-by-state. While the McCain campaign was running short on funds, it could still concentrate its efforts in a single state, and a respectable showing could boost the coffers enough to pay the bills for the next round.
What we see happening is exactly what Howard Dean intended with the 50-State Strategy, to make the Republicans fight in every single state (or at least close to every single state), even in places that have always gone Republican.
In the national election McCain can’t simply defend in Ohio, then move on to Nevada, etc. Obama’s funding has allowed him to fight on multiple fronts, forcing McCain to play whack-a-mole. And there are few natural events that could help raise funds – in the primaries, every debate and every election day got the candidates in the news. Now, there only four debates and one convention.
I should add that the media has helped McCain in another way, by making his ads news. By covering the “Celebrity” ad, as well as the attack ads like the one accusing Obama of wanting teach sex ed to kindergarten students, the media has given the campaign hundreds of thousands of dollars worth of free media (which isn’t to say that the media shouldn’t cover the ads, just that news coverage has unintended effect).
If raising tons of money didn’t help you win elections, candidates wouldn’t do it. The argument is ludicrous. Also, it’s clear that the big money from Wall Street over the years does pay off. Look at the huge payoff they got back from Congress and the two presidential candidates in the form of the BAILOUT to line the pockets of the same wall street crooks who caused the crisis. People are angry. There’s going to be a voter revolt. The candidate who can harness that anger is going to win. I hope it’s Nader. He was against the bailout. And he had an alternate plan to tax every transaction on Wall Street a small amount to raise the same amount of money that the bailout was to form a fund for liquidity. And Nader is a proven advocate of the little guy against big corporations and he knows how to regulate them.