Ezra Klein: On Money

April 20, 2007

On Money

The ability to raise money has become an independent test of a candidate's prospects, completely apart from money's traditional role as a way to buy things. Candidates raise money not to purchase TV time and hire political consultants. They raise money to prove that they can raise money.[...]

I have been waiting for the day when how much money a candidate raised would be a major issue in the campaign itself. I thought this might make campaign finance self-regulating: candidates would refrain from raising too much money for fear it would be held against them. Boy, did I get that one backward.

It's odd, in fact. Raising money is not without its opportunity costs. The time spent in San Francisco speaking to tech entrepreneurs is time not spent in Iowa talking to caucus-goers. So Edwards raised "only" $14 million, but spent more time in the early primary states and so not only leads in Iowa, but appears to be gaining in New Hampshire. And as Dean showed, money does not buy votes in a terribly effective or predictable way. The media's intense focus on fundraising, actually, is beginning to look distorting, as it forces ever more time spent raising ever greater sums, even as the sums seem less capable of purchasing election night victories.

April 20, 2007 | Permalink

Comments

I have been wondering how the media will turn the narrative if JE wins Iowa after they have focused exclusively on Hil and Obama. Especially if he's 1st or 2nd in NH, NV and SC. Super espeically if he's 1st in more than one of the above.

Could get kinda funny.

Posted by: chimneyswift | Apr 20, 2007 11:12:55 AM

The media's intense focus on fundraising

And lots of blogs too. I know you've been in DC for a while now, Ezra, but let's not pull a Washington pundit standard ploy here, and focus on all the attention being paid to something while seemingly remaining oblivious to one's own role in said paying of attention.

Posted by: Glenn | Apr 20, 2007 11:42:51 AM

Obama made a terrible error going toe-to-toe with Hillary in the $$$ chase. Sure, it gives him some headlines and destroys what was left of the notion of Hillary's inevitablity, but his winning the Wall Street Primary (according to Bloomberg) and shaking down lobbyists' spouses and cultivating a network of K-Street support led by Tom Dashcle at least undermine his claim to be running a new kind of campaign and threaten to warp his policy positions; we already know that he's invited Wall Street execs to help him "refine" his position on trade.

This short term victory will be a long-term loss.

Posted by: davidmizner | Apr 20, 2007 12:33:39 PM

There is certainly some at which level at which campaign cash experiences a dimishing return value. It's possible all three dem candidates will over shoot that mark and it won't matter much.

Posted by: ChrisB | Apr 20, 2007 12:38:59 PM

That's some nice spin, David Mizner. Most people would look at Obama raising almost as much as Hillary Clinton, starting from scratch, with no fundraising organization, with twice as many donors, and with twice as many small donations and online donations... and call that an impressive achievement. According to you, however, this is, in fact, a terrible error.

If Edwards had come close to outraising Clinton I can't IMAGINE you would be saying the same thing.

Posted by: Korha | Apr 20, 2007 12:49:33 PM

Korha, I didn't say that. There is no doubt that Obama's fundrasining and donor base are impressive--especially the 100,000 donors. What I'm saying is he didn't need the half-million $$$ he raised from Wall Street or the however much he made from K-Street connections. That money comes with a cost that outweight the benefit of beating Hillary in the $$$ race.

Posted by: davidmizner | Apr 20, 2007 1:01:11 PM

One more thing, Korha, I'm thrilled that Edwards, by all accounts, is making no effort to make friends obn K-Street. And though he's raising money on Wall Street, they're not giving him much because they don't like his agenda. Apparently Wall Street sees something they like in Obama--what is it, you suppose?

Posted by: davidmizner | Apr 20, 2007 1:03:46 PM

Apparently Wall Street sees something they like in Obama--what is it, you suppose?

Among other things, they probably have faith that he won't screw up the economy.

Posted by: Sanpete | Apr 20, 2007 1:15:26 PM

Money speaks, but doesn't vote - yet.

Since nearly everything a Pres. candidate does from day one is really aiming at getting not just the first term but a second as well, they know they will be likely coming back to the money well for round 2. Hence, from whom they raise big bucks matters greatly in determining what interests they will accommodate in their policies. Some money really is clean, and some money really is dirty if one cares about progressive policy being enacted, and not just having your favorite 'character actor' leading the country.

In my mind, having Edwards not taking PAC money from K Street is a very good thing, and having any Dem. sucking Wall Street nipples is not.

For instance, single payer universal health care surely would be viewed as screwing up the economy from a corporate perspective, and taking their money is an implicit bargain that you won't consider that.

Posted by: JimPortlandOR | Apr 20, 2007 1:32:10 PM

An New Kind of Campaign?

The Politico: “Obama announced the no-federal-lobbyist-money rule. But it seems his fundraisers, under pressure to keep pace with the Clinton camp, have decided to follow the letter of that rule rather than embrace its full spirit. Thus, a current lobbyist can't give, but a former lobbyist -- even a recent one -- can. Of course, there is the spouse exemption, even if the money comes from a joint account.”

The Washington Post: “The campaign received $50,566 from 49 lobbyists, but aides flagged the checks during initial screening and said they will return the money. Still, for hosting events and otherwise raising money, the Obama fundraising team is relying on partners in lobbying firms who are not registered for specific clients, former lobbyists who recently dropped clients and spouses of lobbyists. The strategy allows Obama's team to reach the wealthy clients of lobbying firms while technically complying with his pledge."

From Bloomberg: “Democratic presidential candidate Barack Obama ran ahead of New York Senator Hillary Clinton and former New York Mayor Rudy Giuliani on their home turf, raising cash from the biggest investment banks on Wall Street. Obama raised $479,209 from employees at the banks in the first quarter, according to Federal Election Commission filings. That was better than Giuliani, a Republican who collected $473,442. Clinton, Obama's Democratic rival, raised $447,625."

From Business Week: “Robert Wolf, CEO of UBS Americas (UBS ) and a supporter of Senator Barack Obama (D-Ill.), says his candidate understands commerce and is promoting trade agreements that benefit the U.S. "both as a consumer and a provider of goods and services."

Posted by: davidmizner | Apr 20, 2007 1:41:14 PM

It really won't mean much if Edwards wins Iowa because he's been there for most of the past 6 years and everyone knows that the "winner" of Iowa only represents about 30,000 votes. Its going to be discounted and should be. Nevada, -- probably not going to matter that much either. Is someone in CA who was planning to vote for Obama going to change his/her vote because Edwards "won" the Nevada caucuses? I don't think so.

The two primaries, New Hampshire and South Carolina, might give someone momentum but theres so little time to capitalize on it for fundraising before February 5. What if its split decisions anyway? No one gets over 35% in any of the first 4? Edwards takes the first caucuses because of organization with Clinton a close second. Obama takes the NH and SC primaries. Then into 2/5 and a lot of TV advertising. If anyone thinks that would cause Clinton to drop out, they're wrong. Even with the scandal a week in the '92 primaries, Bill Clinton stayed in and we lived through more years of scandal-a-week culminating in Monica Lewinsky, thongs and cigars but the Clintons want to put us through it all over again. What can Hillary Clinton say in an ad that would make people want to vote for her? Do people even listen to her? I just got off the phone with a young relative who is at Rutgers and went to Hillary Clinton's speech this morning. It was an uninspiring, boilerplate kind of speech, things that no one can disagree with about discrimination.

Posted by: Ksren | Apr 20, 2007 2:08:18 PM

Wow, Ksren, I'm not sure if that's spin or sincere analysis; in any case it's crap. "Is someone in CA who was planning to vote for Obama going to change his/her vote because Edwards "won" the Nevada caucuses? I don't think so." No, not precisely, but about half the California electorate won't really tune into to the race until Iowa, and their first look will show them Edwards on a podium with his fist pumped. Those who like him will say, Hell, yeah. Those who can live him will say, Why the hell not? given that he's an appealing, electable candidate.

Every cycle people forget how it works. There are more than two weeks between Iowa and South Carolina. If Edwards (or anyone else) dominates those two weeks, he or she is our nominee.

Posted by: davidmizner | Apr 20, 2007 2:29:02 PM

And as Dean showed, money does not buy votes in a terribly effective or predictable way.

No. As Dean showed, all the early energy from young activists, even the ability to strike a new vein of grassroots donations, didn't mean a hill of beans when establishment money, and establishment people, had settled on Kerry. That's the problem with big money in these races. Seeing money as the problem Dean had is getting Dean's implosion - and Kerry's ability to prevail in spite of Dean's serious challenge - perfectly backwards.

Posted by: weboy | Apr 20, 2007 3:41:00 PM

Just to make what I'd have thought an obvious point: one does not buy radio, television, and newspapers ads with votes. So radio, television, and newspaper analyses tend to be biased toward what does buy those ads.

Posted by: James Killus | Apr 20, 2007 8:16:42 PM

Kerry didn't win Iowa because of establishment money.

He won it because caucus goers went for the best resume.

Posted by: David | Apr 21, 2007 6:32:28 AM

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