Zombie fundraising meme

Last week, Politico Buzzfeed ran a story claiming that Obama is having fundraising problems, noting that many of his 2008 donors haven't given him any money this year. (Here was my response to that.) Today, it followed up with an analysis of where Obama's fundraising shortfall relative to 2008 has been greatest. For the record, I was actually interviewed for this story, and I explained to the reporter (Rebecca Elliott) that I didn't think there was any there there. That is, Obama hasn't received donations this year from a lot of his 2008 donors for one main reason: he didn't face a primary challenger this year, while he was in one of the most competitive presidential nomination races in modern history four years ago. We had a good chat about this, but nothing along these lines made its way into the article.

The new article, meanwhile, starts from the premise that Obama is suffering, and tries to explain why his fundraising shortfall relative to 2008 has been greater in some states than in others. But again, I just don't think there's much here. As Elliott reports, 88% of Obama's 2008 donors nationwide have yet to contribute to him this year, and when you break those figures down by state, the highest shortfall is in Oregon at 91%. Now, if the mean is 88% and the highest value is 91%, it just doesn't sound like we're talking about a whole lot of variation here. The political scientists quoted in the story do a valiant job coming up with some reasons why Western state donors would experience higher dropoff, but it just doesn't sound like there's much of a phenomenon to explain here.

I understand the desire to run stories about how Obama is having a harder time this year than he did in 2008, and that is certainly true in many measurable ways. And who knows -- maybe we'll ultimately find that he did have a hard time raising money. But drawing these comparisons between a campaign with a well-funded opponent and a campaign with no opponent is misleading, and terribly, terribly frustrating.

Update: I inaccurately claimed that the above stories were from Politico. Rather, they were from Buzzfeed.

New campaign finance reporting -- now with less context!

Over at Mother Jones, Andy Kroll reports that Priorities USA Action, an Obama-aligned super PAC, is underperforming relative to its Republican counterparts:

As the leading Obama-affiliated super-PAC, it was supposed to provide a counterbalance to big Republican outside-spending groups. But the super-PAC has so far raked in just $9 million for the 2012 election cycle. By comparison, the pro-Romney super-PAC Restore Our Future has raised $52 million, and the pro-Gingrich super-PAC Winning Our Future pulled in $24 million before Gingrich dropped out of the race. Priorities isn't just struggling to compete with its Republican counterparts—it's not playing in the same league.

Kroll then provides four reasons why the Obama super PAC isn't raising much money. Strangely, none of those reasons is that Obama didn't face any primary challengers. Romney needed money to defeat his party rivals. Obama didn't.

From what I've heard from some campaign staffers, the Obama folks expect Romney's super PACs to raise more money than the Obama super PACs, although they think the Obama campaign itself will out-raise the Romney campaign. This may all be true, and we'll know better this summer and fall, when we see fundraising patterns for the general election. But comparing them at a time when one candidate had opponents and the other didn't is just silly.

(h/t John Sides)

Super PACs: The antidote to corruption?

The Denver Post has an interesting story today about the motives of some of those who are donating to super PACs this year. In particular, note this section:

"I wish we could be more honest about it," said Paul Zecchi, a CEO of an oil-and-gas company who donated $25,000 to Romney's PAC in March. "Super PACs are just another way to give money to Mitt Romney or Obama or whatever. I wish there was a way to just do it out in the open and give to the candidate."

Zecchi has given to his candidate's campaign. But federal election law allows individuals to donate a maximum of $2,500 per election cycle, which means donors can give $2,500 in a primary and another $2,500 for the general election. Individuals can also give $30,800 to a national party committee.

For the donation, Zecchi joked that it would be great to get an invite to the inauguration. But he says what he really wants is a future President Romney's ear.

"We certainly would like to be able to sit down with him on a one-on-one basis and tell him our feelings about what's going on in our business and the economy," he said. "If you're just listening to bureaucrats all day long, you're not going to be hearing from any one person. But me and my friends could relay to him what we see."

So here's a person who donates precisely because he wants a quid pro quo; he wants to give Romney a ton of money and he wants Romney to remember where the money came from so he can ask a favor later. But limits on direct donations make that hard, so he's donating to a super PAC. That's still helpful for Zecchi's purposes, but because his donations are being pooled with so many others, he'll get less credit for the donation. Zecchi can still help his chosen candidate, but he's less likely to be rewarded for the effort.

I'm not going to champion super PACs as the cure for campaign finance corruption, but this is a perspective we don't often hear.

Poor Obama failing to raise funds he doesn't need

Last September, Nick Confessore wrote in the NYT that the Obama campaign was failing to secure funds from small donors like it did in 2008. Today he's written almost the complete opposite story and still gotten it wrong, which is kind of amazing, really. As he writes:

President Obama’s re-election campaign is straining to raise the huge sums it is counting on to run against Mitt Romney, with sharp dropoffs in donations from nearly every major industry forcing it to rely more than ever on small contributions and a relative handful of major donors.

So now Obama is relying upon the small donors who allegedly weren't contributing to him. Okay. But what does Confessore mean by "sharp dropoffs in donations"? Well, it turns out that's compared to the same time period in 2008. Why might that be a bad comparison? Confessore provides an explanation further down in the article:

With no primary to excite his base, the economy struggling to rebound, and four years of political battles with Wall Street and other industries taking their toll, Mr. Obama’s campaign raised about $196 million through March, compared with $235 million at the same point in 2008 [emphasis added].

The lack of a primary is really important! At this point in 2008, Obama was locked in a tight contest with Hillary Clinton that would go on until June. He really needed the funds. He might not need them as much today, as Confessore again points out:

And with no primary to fight, Mr. Obama is spending much less than he was at this stage in 2008: He had about twice as much money in the bank at the end of March than he did four years ago.

So Obama is suffering compared to 2008 even though he has twice as much cash on hand?

It is, admittedly, hard to find a good point of comparison for Obama at this stage. Here's one, though: George W. Bush was an incumbent president facing no primary opponents in 2004. By the end of March 2004, his campaign had raised around $186 million, which is something like $225 million in 2012 dollars. So Obama's a bit shy of that, although the story notes that Obama has spent a lot of effort doing fundraising with the DNC, which might make for an important distinction. It is also possible that the fundraising environment today is so completely different from what it was eight years ago as to make comparisons meaningless. But the direct comparison to 2008 is highly misleading.

Imagine no campaign donations. It's easy if you try.

Imagine, for a moment, that you didn't need to raise money to run for office, that the government would pay you to run. Who would that help? Would it encourage more moderate candidates, who are usually pressured out of nomination contests by party money because they don't stand for anything? Or would it enable the extremists, whom are normally de-funded due to concerns about their toxic views?

Well, we actually don't need to imagine. Arizona and Maine had just such a system in place for state legislative elections during the last decade. So Michael Miller and I collected roll call votes from those states and compared those who first got elected through "clean" funding with those who achieved offices through traditional funding methods. We report the results in our new paper "Buying Extremists," which we're presenting next week at the meeting of the Midwest Political Science Association. Here's a summary of what we found:

• Clean-funded legislators were more ideologically extreme relative to their districts and parties than traditionally-funded legislators were.
• The extremism difference faded with time, with clean-funded legislators becoming socialized after several sessions to mirror the views of their traditionally-funded colleagues.

These findings suggest that it's the more ideologically extreme candidates who take advantage of clean funding to run for office. Under the traditional funding system, party donors function as gate-keepers, reducing the power of extreme candidates by channelling money away from them. Take away the gate-keepers, and it's the extremists who break through, contributing to the polarization of the legislature.

More spending on presidential elections and the peculiar case of 1896

A few commenters at this last post on presidential campaign spending suggested examining spending as a function of annual real GDP. Check it out:

What this chart mainly demonstrates is what an enormous outlier 1896 was. 0.06% of GDP went toward campaign spending. Another way to say that is that for every $1,000 spent in the U.S. in 1896, 60 cents went to finance a presidential campaign. And as we can see, that figure dwarfed those of other years.

My understanding is that spending in 1896 was largely driven by the Republican side, which outspent Democrats roughly 5 to 1. And that spending mainly came from large corporations enlisted by Marcus Hanna to beat back the silver-coining advocates they (correctly) perceived as a threat to their interests.

Another observation: 2008 looks pretty unremarkable.

Spending on presidential elections

On Monday, Dave Gilson produced this wonderful graph of spending by presidential candidates since 1860, in constant 2011 dollars. It suggested that we really have seen a departure in the last two cycles, with 2004 being the most expensive race up until that point, and 2008 burying 2004. Jonathan Bernstein points out that inflation-adjusted dollars really don't tell the whole story, since the country has been growing. So I've divided Gilson's cost figures by the number of votes cast* in each election (as recorded by David Leip), producing the graph below:

What surprised me is the stability of the figures over time; in 12 of the 18 elections, the campaigns spent between $2 and $5 per vote cast, in 2011 dollars. That includes most of the elections before the early-70s reforms, suggesting that, contra Jon's point, the reforms did not force campaign spending to artificially low levels. 2004 did see an unusually high level of spending, but not quite as much as was spent in 1968. And 2008 really did see a lot of spending, although 1896 still holds the record.

Like Jon, I don't see any particular problem with increased levels of campaign spending. Most of that spending consists of voluntary donations by wealthy Americans financing ads that inform middle-class Americans about presidential candidates. I fail to see the harm to the Republic.


*Jon suggests that it might be better to measure money spent per eligible voter, rather than per vote cast, since it is the eligible voters that the campaigns are trying to reach. I agree, but figuring out the eligible electorate in many of these years is a tad tricky. Millions of Americans were legally eligible to vote from the 1870s to the 1960s but nonetheless faced taunts, beatings, or death for trying to do so.

Update: See here to see campaign spending as a function of real GDP.

How do 527s fit in with parties?

If parties are networks, where exactly do 527s fit in? Are they out on the fringes, running messages inconsistent with what the party leaders and candidates want? Or are they highly central to the party networks, doing the work that the more formal branches of the parties are prohibited from doing?

Richard Skinner, David Dulio, and I investigate these questions in a new paper that just came out in American Politics Research called "527 Committees and the Political Party Network" (PDF, ungated). The way we approached this was by collecting a dataset consisting of all the employment records of the 100 most active 527s between 2004 and 2006. We then researched these employees' backgrounds to find out where else they have worked. Then we constructed a network using the employment ties between different organizations. The chart below shows all the groups that were linked to the liberal 527 America Coming Together via shared employees:

The network analysis finds that 527s are closely tied to the party networks, assisting them in coordinating messages across different groups. The study also suggests that 527s played a particularly important role for the Democratic Party during this period when Republicans held control over the Congress and the White House: they were a place of employment for key Democratic staffers until their party could return to power.

Funding in the 2012 elections

Mark Schmitt wrote last week about how Super PACs were allowing for zombie presidential candidates who now have the funding to walk the Earth long after a lack of endorsements or victories should have finished them off. I think this is just the beginning of the ways that some post-Citizens United funding innovations will affect the 2012 presidential election.

It's hard to know, going into the race, which side will have more mysterious funding backing it. There is no shortage of wealthy benefactors in either party who would be willing to give millions of dollars if they thought it might affect the presidential election. But this lack of knowledge increases the uncertainty surrounding the election considerably.

In 2008, McCain's team went into the general election knowing it was facing a condition of asymmetric warfare: Obama's team could outspend them 2 to 1 anywhere. Now, there are tactics you can pursue knowing you're facing such a situation in order to confuse your opponent, such as being ambiguous about just where you're devoting your resources. I think McCain did some things along these lines. Not that they helped him a great deal in the end, but in a closer race, perhaps such tactics could make a difference.

This year, conversely, neither side really has any idea what the funding situation looks like in advance. Yes, Obama and (presumably) Romney will be able to look at each other's campaign finance disclosures, but those will only reveal a modest percentage of the spending that will occur this year. Where will these Super PACs deploy their spending? What sort of messages will they convey, and will those messages be consistent with what the campaign is trying to say? How do you form a strategy if you have no idea what your opponent's capabilities are, or if you don't even know what your own capabilities are?

Getting money out of politics

A friend posted a Facebook link this morning to a group called Get Money Out, which wants to, quite simply, get all private money out of political campaigns. Now, I would normally quickly dismiss such a group, but this seems like a good opportunity to discuss campaign finance reform and some of the arguments used in its favor.

Campaign finance reform strikes me as a solution in constant search for a problem. It's actually quite hard to identify specific and egregious incidents of bribery that would have been prevented by removing private funding from campaigns. Yes, there are occasional abuses -- Rod Blagojevich selling an Illinois senate seat, Tom DeLay shaking down lobbying firms in exchange for access, Duke Cunningham offering contracts to a military contractor in exchange for a yacht -- but these are exceedingly rare and, more importantly, the abusers were caught and convicted under existing laws. But these are not the problems reformers tend to highlight. Rather, they voice a more general concern that everything "bad" in American politics stems from the private financing of campaigns. Note the opening statement on Get Money Out's website:

Bailouts. War. Unemployment. Our government is bought, and we’re angry.

The insinuation is that if our campaigns were publicly financed, there'd have been no bailouts or war, and that unemployment would be lower. This is pretty ridiculous on its face (who exactly is lobbying for high unemployment, and who in Congress or the White House is keeping unemployment high to satisfy donors?), and one could easily point to countries with publicly-financed campaigns that have nonetheless found themselves with persistent high unemployment and prolonged wars in recent years. Nonetheless, the reformers persist in their quest.

One might ask, what's the harm? That is, maybe driving private money out of elections wouldn't exactly create Heaven on Earth, but maybe it would make politics a bit cleaner and make our officeholders more representative of our needs. Why not try it?

I'm actually working on a book on this very topic right now, but here's the quick answer: campaign finance reform, to a very large extent, simply hasn't worked. That is, every time a government tries to enact a specific contribution or spending limit to reduce the amount of money in elections (FECA, BCRA, you name it), innovative donors and candidates figure out ways around it. You want to give more than the limit to a group of candidates? Fine, just donate to a 527 or some sort of independent expenditure committee that can spend unlimited amounts on behalf of a candidate. Colorado's Four Millionaires showed how this can be done. This is part of the reason that, despite decades of campaign finance reform, the amount spent in campaigns continues to rise, much faster than inflation.

What's more, all this regulation has a price. If you want to know who contributed to the campaign of a president or a senator or a state legislator, it's not as easy to figure it out as it used to be. All these webs of committees that have cropped up to get around campaign finance limits end up obscuring the path of the money. Some of the money comes from individual donors, who can be identified in FEC records, but lots of it comes from groups who only have minimal disclosure requirements, and the donors to those groups may be other groups of people bundled together. Who's backing a candidate? It's almost impossible to tell nowadays.

The end result is that these reforms designed to reduce the role of money in campaigns not only don't end up reducing the role of money in campaigns, but they actually reduce accountability and transparency.

Update: I had missed Matt Yglesias' take on this same topic last month (h/t Andrew Long). He notes that banning all contributions to campaigns tends to make it difficult for anyone to run for office, and wonders just what problem this solves. He also cites Dylan Rattigan's specific proposed constitutional amendment:

No person, corporation or business entity of any type, domestic or foreign, shall be allowed to contribute money, directly or indirectly, to any candidate for Federal office or to contribute money on behalf of or opposed to any type of campaign for Federal office [emphasis added].

Beyond the problems noted above, it seems odd to write a rule into the U.S. Constitution proscribing behavior by people who are not Americans. I'd think it would make somewhat more sense if the candidate, rather than the prospective donor, were the subject of the rule.

Trends that are not actually occurring, Obama donor edition

Over at the New York Times, Nicholas Confessore has a piece up claiming that Obama's small donors, who were such a major part of his support in 2008, are not showing up for him during this election cycle. The thrust of the piece is qualitative, involving interviews with some of Obama's 2008 donors who are now disappointed with him and haven't given him any money yet. But behind these assertions is a quantitative claim: Obama is not commanding the same level of support he was four years ago. As Confessore says:

Through June 30, the close of the most recent campaign reporting period, more than 552,000 people had contributed to Mr. Obama’s re-election effort, according to campaign officials. Half of them were new donors, and nearly all of them gave contributions of less than $250.

But those figures obscured another statistic: a vast majority of Mr. Obama’s past donors, who number close to four million, have not yet given him any money at all [emphasis added].

Okay, there's a big and very obvious problem with this comparison. The half-million people who have donated to Obama's 2012 campaign so far (that is, through June of 2011) are being compared with those who donated through the entirety of the 2008 campaign season. The bulk of donors don't get involved until much closer to the primaries and general election. The appropriate comparison point would be those who donated through June of 2007. According to the FEC, there were just over 77,000 donations to Obama in the first half of 2007, roughly a third of which were under $250.

So, just to review, Obama has received more than seven times as many donations at this point in the 2012 cycle than he did by this point in the 2008 cycle. What's more, the share of his donations coming from small (under $250) contributions is now greater than it was four years ago.

Now, of course, there are plenty of reasons why these two elections cycles don't make for a great comparison. Obama is the president now, and he was only a modestly-famous freshman senator four years ago. Conversely, he was going into a hotly contested primary back then and appears to be unopposed for the nomination today. That said, there is no quantitative basis for Confessore's assertions.

That's not to say that there are no 2008 Obama supporters who are disappointed with his presidency -- I'm sure there are plenty! And I haven't collected the data that would tell us the extent to which those supporters are contributing today. But to say that the half-million who have given to Obama this year compare unfavorably to the 4 million who gave to him previously is really grossly misleading.

Can we boycott bipartisanship instead?

In the NY Times, Joe Nocera advocates boycotting donations to political campaigns as a way to get politicians to "begin acting responsibly." Somehow, he considers this idea "hardheaded and practical." There are so many things wrong with this column it's hard to know where to start, but I'll give it a shot.

The first and most important point here is that the column bespeaks an outright hostility to democracy. Nocera approvingly quotes Starbucks CEO Howard Schultz* as saying, "The fundamental problem is that the lens through which Congress approaches issues is re-election." A word of advice: avoid reform suggestions from people who claim that the re-election incentive is a problem. The re-election incentive is the entire point of a representative democracy. It's what distinguishes members of Congress from tyrants. It ensures that elected officials will try to do what the people who elected them want them to do, rather than just doing whatever they want or following the lead of the most charismatic politician in DC.

Okay, that issue aside, the whole idea of boycotting contributions to candidates has a serious collective action problem associated with it. As Nocera admits, the boycott would have to be bipartisan to work, otherwise one party would dominate the party that refused to give to candidates. Yeah, that's kind of a big stumbling block there. Since those who donate to candidates tend to be the most loyal partisans, you're going to have a hard time convincing them to lay down arms while trusting that the other side is doing the same thing.

Third, Nocera and Schultz seem to be confused about the role money plays in politics. Note this paragraph:

Schultz began doing some research. In 2000, he said, total campaign contributions, to all politicians, amounted to $3 billion. Four years later, it was $4 billion. In the 2008 election year, he said, "it went up another billion, to $5 billion. I was astonished.... It is a sad state of affairs that the only thing they’ll listen to is money."

It's really not clear to me how they get from point A (donations are increasing) to point B (money controls politicians). You might as well say that the only thing politicians will listen to is votes. (After all, turnout has been increasing!) And that, of course, would be just fine.

Finally, seriously, a boycott? According to the 2008 ANES, about 10 percent of Americans donated to candidates that year. That just has to be a huge overstatement, given how inflated self-reported voting tends to be. So, very few people are even doing this activity that Nocera wants to see boycotted, and those that are are the most committed partisans in the country. This is a "hardheaded and practical" idea?

(h/t Michael Tofias and Hans Noel)

*Just two weeks ago, Tom Friedman was being seduced by the Americans Elect CEO in his "swank offices, finance with some serious hedge-fund money." What is it about wealthy CEOs that makes NYT columnists swoon?

State legislative seats are cheap, except where they're not

Source

The effect of the Citizens United case

John Sides is seeking feedback on his summary of the impact of the Citizens United ruling on the 2010 congressional elections, although it sounds to me like he pretty much nailed it.  As Sides says, despite warnings, there was not a huge onslaught of advertisements by independent groups, at least compared to what was going on prior to the ruling.  As he notes, independent spending using money from unnamed donors was legal prior to 2010, and 527s have been gaining popularity all throughout the past decade.

Sides does find one important impact of the decision:

The main change wrought by the Citizens United decision, at least according to some observers, was psychological, not legal, in nature. It simply gave corporations a "greater comfort level," according to one news account, making them more likely to more likely to spend money to support their favored candidates. In this account, a campaign finance lawyer was quoted calling the decision a "psychological green light."

Shouldn't they leave everything on the field?

There are plenty of grounds on which to criticize RNC chair Michael Steele, but I didn't quite get this criticism from Gentry Collins, who resigned from the RNC on Tuesday:

In the previous two nonpresidential cycles, the RNC carried over $4.8 million and $3.1 million respectively in cash reserve balances into the presidential cycles.... In stark contrast, we enter the 2012 presidential cycle with 100 percent of the RNC's $15 million in lines of credit tapped out, and unpaid bills likely to add millions to that debt.

Maybe I'm missing the point, but what's the value in not spending absolutely everything during an election cycle? It's not like Republicans have nothing to show for it. Would Collins prefer that the GOP had a smaller majority in the House but more money in the bank? Does he really think it will be hard to raise a few more million dollars during a presidential election cycle?