Campaign Finance: Does it really work?

Mitt Romney must feel on top of the world! On April 4th, he won Wisconsin, Maryland and DC primaries. He is also at the point where it is getting increasingly likely that no other candidate will catch him on the road to the presidential nomination. However, the Christian conservative Rick Santorum has waged a courageous battle against Romney and amassed quite a following. We still have Ron Paul and Newt Gingrich who linger on trying to garner delegates, but their reluctance to bow down only prolongs the inevitable. We have seen plenty of debates and noticed the shrinking number of participants. Insightful topics such as the struggling economy, Obama’s medicare plan, foreign relations, abortion, and many more were debated. A noteworthy topic has been campaign finance which considers whether companies should provide money towards elections or if SuperPacs should have wads of cash at their disposal. There have been plenty of responses against campaign finance and I have seen that many of the views have been taken at face value. In this article I will explain how exorbitant amounts of money in campaigns need not be a terrible thing.

Santorum has been leveling fierce criticism against Romney’s massive campaign cash reserves by telling a crowd in Dayton: “If I had the opportunity to have a 6 to 1 spending advantage given where we are in this race right now, this race wouldn’t be close.” However, a report from Bloomberg states that Santorum has raised $9 million in February alone while Romney has received $11.5 million. While a $2.5 million difference is a massive amount, Santorum need not complain because he has a nice sum to carry on in the campaign for now. Every time he gets on the podium, Santorum should worry about other issues rather than bickering about lack of funds.

Moving on to the reasons for campaign finance, one must remember that advertisements inform the consumers. Economist Israel Kirzner has written greatly on the subject of advertisements and how it promulgates information about the product throughout the economy. We can take the same principle (explained before) of information and apply it to campaign finance and advertisements to see the potential benefits of the endeavor. Economist David Primo, from University of Rochester, explains campaign advertisements inform the general public about the strong points of one candidate and the weak aspects of others. Some of this information may help your decision on who to vote for. Also Primo states that super PACs, which is an independent-expenditure only committees, help “like minded individuals to get together and speak their mind on politics”. As long as the super PAC remains (to some degree at least) independent of the campaigner they support, then this process should be encouraged as it gives a base for normal people to come and speak their mind. If anything, Primo argues that it’s the reformers that have made the process less transparent because of the plenty of rules and laws that get created. If we limit the laws on super PACs and campaign finance, Primo asserts that we should see more transparency.

Does high campaign spending acquire more votes? Steven Levitt answers in his paper “When a candidate doubled their spending, holding everything else constant, they only got an extra one percent of the popular vote. It’s the same if you cut your spending in half, you only lose one percent of the popular vote. So we’re talking about really large swings in campaign spending with almost trivial changes in the vote.” There have been a number of candidates who outspent their candidates and did not win; notable mentions include Linda McMahon, Steve Forbes and Meg Whitman. It’s not only about the money, but rather on the character of the individual. If no one likes you then no one will vote for you, even if you spend on numerous advertisements.

Even in this presidential election we have seen Romney (who has a fortune) teeter a number of times when Santorum clinched Colorado, Missouri and Minnesota in a 3 state sweep. Romney always had the money and the organization any candidate would dream for, but he can lose because of his supposed “flip-flop” record. Many republicans are appealed by Santorum’s blue collar background and strong Christian conservatism. These traits have enabled Santorum to acquire a number of states and give Romney an arduous task of winning the Republican nomination. Yet, all this was done because of Santorum’s appeal, rather than just the money.

Still, there are a couple of concerns considering campaign finance. Firstly, the inevitability of a campaign can be determined by the amount of money the candidate has. As we have noticed that Gingrich has only claimed two states and Paul has won nothing, yet these campaigns are still running because of the money they raise. Nevertheless, this need not be a massive problem because faltering candidates are only prolonging the inevitable. Even if they possess the money to continue, there will come a time when people will notice who the winner will be and they will reconsider their donations. Eventually, the money will dry up. If the candidates are wealthy and they put in their money to stay in longer, then they are just wasting their money needlessly; hardly a concern for us voters.

Lastly, and rather big complaint of campaign spending is the corruption that follows. When businesses give to candidates, the victors will provide for the donators. This is an aspect of crony capitalism and a question about whether government should step in to help businesses even if one of their investors is associated with your campaign finance. President Obama did praise Solyndra, a solar company, and he gave them an injection of $535 million that ultimately ended in the firm going bankrupt. One of the investors of the firm was George Kaiser who provides for Obama’s campaign finance. It is a rather curious event that has taken place which has given a field day for the GOP. This kind of problem can arise when the victors play to their charitable donors instead of caring about societies benefit. I do feel that this problem can be present and gives a reason for consumers and Congress to be alert to such corruption. We should be constantly scrutinizing such methods and pile pressure on bureaucrats who provide benefits to their campaign donors.

In the end, campaign finance has been a hotly debated topic by many individuals and it has provided many reasons both for and against. This article showed that campaign finance is not such a problem as it provides information to potential voters. Whether campaign finance really works is debatable as well because we have witnessed noteworthy individuals coming short after spending millions. In the end, we must understand campaign financing doesn’t always matter unless people like the person.

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One thought on “Campaign Finance: Does it really work?

  1. This was a logical way of looking at campaign financing. Thanks for the links too! Anything involving money and politics (practically everything) will certainly be hotly debated.

    I think the only thing I would have mentioned in regards to the advertisements is that it is uncertain when too much skewed information becomes more of a problem than a benefit. I’m sure there’s a paper written on this somewhere. Time to look for it…

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