Money Talks . . . But What Is It Saying?
By Pejman Yousefzadeh Posted in Democrats — Comments (15) / Email this page » / Leave a comment »
One could look at the issue of political fundraising from a Steven Levitt/Stephen Dubner perspective and argue that political candidates and parties do not win with more money. They win because they are attractive parties and candidates--thus causing people to want to give them money. Perhaps this is the case. But in a day and age when parties and candidates are judged by the money they raise, this bodes ill for the Democratic Party:
The Democratic National Committee under Howard Dean is losing the fundraising race against Republicans by nearly 2 to 1, a slow start that is stirring concern among strategists who worry that a cash shortage could hinder the party's competitiveness in next year's midterm elections.
The former Vermont governor and presidential candidate took the chairmanship of the national party eight months ago, riding the enthusiasm of grass-roots activists who relished his firebrand rhetorical style. But he faced widespread misgivings from establishment Democrats, including elected officials and Washington operatives, who questioned whether Dean was the right fit in a job that traditionally has centered on fundraising and the courting of major donors.
Now, the latest financial numbers are prompting new doubts. From January through September, the Republican National Committee raised $81.5 million, with $34 million remaining in the bank. The Democratic National Committee, by contrast, showed $42 million raised and $6.8 million in the bank.
"The degree to which the fundraising has not been competitive is obviously troublesome," said former congressman Vic Fazio (D-Calif.), who is now a lobbyist here. He expressed confidence in Tom McMahon, Dean's executive director at the DNC.
One House Democratic leadership aide, who spoke on the condition of anonymity to preserve relations with Dean's operation, put it more bluntly: "There is plenty of time, but the red flashing sirens should be going off there."
As Democrats are riding high in the wake of Tuesday's elections, running unexpectedly strong even in traditional Republican states such as Virginia, the DNC's fundraising problems represent a potential cloud. But those results could also boost the spirits of partisans in ways that will make it easier for Dean to even the balance.
As critics see it, Dean has disappointed on two fronts. The DNC has not replicated the success of Dean's presidential campaign two years ago in tapping vast numbers of new and smaller contributors over the Internet. And skeptics say he has not yet established rapport with and won the confidence of high-dollar donors.
DNC officials acknowledge that elements of their fundraising operation have started more slowly than expected. But they and other Dean defenders say his record should be viewed in context.
In the previous election cycle, the DNC had raised $31 million, compared with the RNC's $80 million, at this point in 2003. But the cash-on-hand disparity -- the main concern of party strategists -- was less daunting then, with the RNC sitting on $27 million to nearly $10 million for the DNC.
The explanation most offered by Dean allies for the sluggish start is that donors are tired of giving after watching Sen. John F. Kerry (Mass.) fail to deliver the White House. Kerry's fundraising success last year raised expectations among Democrats that the days of competing at a financial disadvantage with the GOP were over. For now, they are not.
"We will have the resources to do what we need to do," said Karen Finney, a DNC spokeswoman. "We are committed to investing in state parties and rebuilding the grass roots from the bottom up."
Perhaps. And to be sure, the election results this past Tuesday may help in that regard. But it is strange and interesting to see that a supposedly unmotivated Republican base is vastly outraising their motivated Democratic counterparts. If you believe the traditional school of thought regarding campaigns and money, you have to think that the amount of money Republicans have on hand will help in 2006. And if you believe the Levitt/Dubner thesis, you have to think that despite everything that has gone on this year, enough people like Republicans to ensure that the GOP will remain quite competitive.
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Money Talks . . . But What Is It Saying? 15 Comments (0 topical, 15 editorial, 0 hidden) Post a comment »
Dean has only managed to raise $11 million more than his predecessor, fundraising star Terry McAuliffe, in the 2003 cycle in comparison to an RNC increase of $1.5M. Also, I don't know what the RNC spent on Kilgore's campaign, but the DNC put $5 million into Kaine's.
it is obvios that vast amounts of $$ are needed to finance campaigns, and yes in the past the dem's have been having trouble with that, with the obvios exception of john kerry, but as a republican voter i can't help but think that our party will have problems in future elections, not due to the president's policies, but due to the message that the rep. party has been sending,as seen in some of the most recent bills being passed through the house and senate, that are obviosly passed to help the top 5% of our country,meanwhile ignoring the problems of the majority of our population that earn just enough to live,let alone save anything for their future.we have enough lobbying for the rich companies, but can anyone tell me when we will see something done for the average middle-class person,or are we just not important and have no voice because we have no money or pork to contribute.the senate can pass bills to strengthen the power of banking institutions,and a bill to make everyone change over to digital television(why?), but whatever happened to social security,medicaid reform,and simplifing the tax code? it's starting to seem that if there is no money or power in it for our leaders that they simply dont want to be bothered. i believe this will hurt the rep. party in upcoming elections.i am new to redstate.org, and blogging, but i really wish somebody would tell me what they think!oh yeah, and how about securing our borders,i thought we(the american people) stopped practicing slavery after the civil war, isn't that what the civil war was mostly about,among other things?someone please respond,i might be the most educated person in the world, but i am very concrned.
seemed to put the blame on donor's not yet being willing to pony up dough to a relatively new fundraiser like Dean, though a little attention was given to Dean's polarizing, firebrand rhetoric. It would be interesting to read interviews with top DNC donors who have met Dean, and hear why they did or did not donate.
There are two main problems in assessing the impact of money on success.
First, there is simulteniety. Candidates who are in risk of losing are likely to lose more money.
Second, there is ommited variable bias. Better quality challengers are both more likely to get votes and raise more money.
The Levitt approach is to subset on races in which canididates faced each other several times. Clever, but problematic.
Others have used instrumental variable regression.
The big problem is the candidate quality is impossible to measure well.
It's a similar problem to the question of whether police reduce crime. Clearly, the placed in the U.S. with the most police officers per capita also have the most crime. Levitt also tackled that problem very brilliantly with IV regression.
I meant:
"Candidates who are likely to lose tend to raise more money" because their races will be competitive.
Please don't refer to it as the Levitt/Dubner hypothesis.
It was Levitt's undergrad thesis that was published in the JPE in 1994, twelve years ago.
Levitt is one of the best economists in the world.
Dubner is a good journalist.
All ideas are Levitt's
This is Levitt's hypothesis alone and was a paper he wrote. One correction, he wrote it the summer after his first year in grad school and it was published during his second year of grad school.
that while the paper was published while he was in grad school, the original idea was part of his senior thesis at Harvard.
But maybe that's just a rumour.
Republicans will always out rise the Democrats in hard money because the Republican party is the party of small business. Democrats have always relied on wealthy elite dononrs. The DNC will become more irrelevant as time goes on because of the 527s. The elite (George Soros, Bing, Geffen, and the MoveOn.Org crowd) are giving huge sums to 527s because they directly push issues and candidates where they limited under the old campaign laws. Also these people are more interested in their issues and not so much on winning like a political party is. The 527s will push the Democrats further to the left since that is where the money is. Also AFL-CIO will not be as powerful because it have less money to spend since five of its biggest unions broke away and decided to spend their money on getting new members. Democrats will become beholden to the 527s if 2004 was any indication.
Rush and others are saying all the time that the Dems have been highjacked by these moonbat groups. I would say that the average person on the left doesn't belong to any of the nutty special interests and therefore wil not be represented by Dem candidates, and therefore wouldn't necessarily contribute. I'm small business and I want the government out of my way. I feel as though I'm punished for hard work every 15th when I write that big Fed Liability check, so I'm willing to spend more to ensure that check, and all the others I write for the sake of bureaucracy, stay as small as possible.
If the era of big government is over, then why does it still grow even when the Conseratives are in office?
"the Conseratives are in office"
Republicans are a majority right now, but conservatives are not.
As evidenced by the attempt to cut the deficit by cutting spending by a couple tens of billions of dollars last week, the "moderates" and the Democrats opposed. When they join together, they make a majority. If Conservatives (i.e. the Republican Study Committee) were in the majority, they would win votes like that.
I'm still disheartened by the lack of effort by Republicans to trim the government, but the only ones really fighting to do so are the conservatives (i.e. Coburn, McCain, Pence, Blackburn, etc).
Conservatives aren't in power? Isn't President Bush a Conservative?
A sitting President can wipe the Federal Registry clean with one stroke of his pen. Why then does he not?
Was it not President Bush and the Conservatives which implemented a new Welfare Program called Medicare Prescription Drug Benefit?
On the one hand you state that the Conservatives attempted to stop deficit spending, and on the other hand you are "still disheartened by the lack of effort by Republicans to trim the government,..." Wasn't McCain part of the 14?
Conservatives are Republicans. You say that it is the Moderates fault for ever growing government. It was the Moderates that pushed through Bush's Prescription weflare program?
Based on recent events and the poll #'s of the President and Congress, the Democrats have a huge opportunity to make up a lot of ground in 06, but they seem to lack a clear message like Newt had in 94. The Dems' inability to raise $$ likely stems from their inability to rally the faithful with a clear message.
Maybe they will wait until the spring before they unveil their grand scheme to save America and retake the Senate and House. On the other hand, maybe they will never get their act together. We shall see.