Wednesday, January 4, 2012

Iowa Caucus Results Confirm that Money Cannot Buy Political Success

Consumers Balked Despite Massive Advertising

Ditto (at least this time)

Proponents of "campaign finance reform" (usually a euphemism for banning high value speech) often claim that unfettered campaign spending allows candidates to "buy" elections.   The results of last night's Iowa Caucus should throw some cold water on this idea.  As reported by Wonkette, Rick Santorum spent just $1.65 per each vote he received, compared to the more than $800 per vote spent by Texas Governor Rick Perry, pictured above.  (Governor Mitt Romney, the Iowa winner, spent just over $100 per vote.)  Thus, Perry joins the ranks of candidates such as former Texas Governor John Connoly, who earned a single Republican delegate after spending over $10 million in his 1980 presidential campaign, or current Vice President Joe Biden, who spent millions on his 2008 campaign but did not receive a single delegate. 

These results suggest what many have known for years, namely, high spending is neither a necessary nor sufficient condition for electoral success.  Political candidates are products.  As Ford learned with the Edsel (also pictured above) massive advertising (including an hour long special on CBS featuring Bing Crosby, Frank Sinatra and Bob Hope) cannot induce consumers in a free market to purchase an inferior product.  (Coke's experience with the so-called "New Coke" provides a similar historical lesson.)   At the same time, good products often "sell themselves," thereby obviating the need for massive advertising.  (Moreover many candidates are flush with campaign cash precisely because donors believe the candidate's message will resonate with the voters.  That is, a strong candidacy often results in numerous donations, and not the other way around.)  The people of Iowa apparently believed that Senator Santorum was a much better product than Governor Perry, thus explaining the Senator's strong second place finish compared to Governor Perry's less auspicious fifth place finish.

One final thought.  Voters in political markets are sometimes more forgiving than consumers in economic markets, with the result that politicians sometimes have several lives.  Thus, Richard Nixon lost the presidential campaign in 1960.  He then lost a race for governor of California in 1962 before resurrecting his political fortunes, winning the Presidency in 1968 and repeating the feat with a 49 state lanslide in 1972.  Abraham Lincoln, of course, lost more elections that he won.  In politics, persistence can sometimes pay off, and victory is sometimes a long run phenomenon.