The whole story is strange, and there are clearly details about FreedomWorks's internal rift that we don't know, but one thing is clear: A lot of the money that rich conservatives and libertarians are putting toward the organization won't actually be spent on effective efforts to shrink the government.
Relatedly, Sheldon Adelson spent more than $100 million backing Republican candidates this election cycle, often making odd choices. He and his wife put $15 million behind Newt Gingrich's hopeless campaign and spent $500,000 to back Rabbi Shmuley Boteach (author of "Kosher Sex"), who ended up taking just 25 percent of the vote in a heavily Democratic district. Adelson's efforts do not appear to have been effective at influencing electoral outcomes.
Yet Adelson says he is prepared to spend twice as much in the next cycle. And Armey's payouts are coming directly from one of FreedomWorks's board members, who could presumably have decided instead to close his checkbook to the dysfunctional organization.
At first glance, this looks like throwing good money after bad. My colleague Francis Wilkinson is puzzled. Why spend so much money in a way that has so little apparent policy impact?
But it's a mistake to assume that big outside spenders' top priority is effectively influencing the government.
Let's think about why middle-income and affluent people give money to political candidates. They don't assume that a donation of $25 or $100 or $1,000 is going to change the electoral outcome. They give because it makes them feel good.
So why did Sheldon Adelson spend a nine-figure amount on behalf of Republicans? Perhaps for the same reason that someone with much less wealth sent $100 to Mitt Romney: because he strongly dislikes Barack Obama and giving the money makes him feel good. Adelson even got added perks that small-dollar donors don't, like Mitt Romney sucking up to him.
Plus, when you give to a party committee or a campaign, somebody else decides how to spend the money. If you fund your own super-PAC, you can decide what ads to run and where. That's probably worse for influencing elections -- political professionals know better than billionaires how to get votes -- but it's better as a vanity project.
Some bored billionaires take up mountain climbing; these guys pay for attack ads. If Adelson enjoyed that experience, he might as well keep giving in 2016. And other conservative billionaires might as well keep pouring their own money into ineffective ad campaigns of their own.
The most illustrative example of this is Foster Friess, a businessman who spent more than $1 million to support Rick Santorum in the Republican primaries. Freiss drew negative attention to himself and Santorum when he told MSNBC's Andrea Mitchell that women who can't afford birth control can just hold an aspirin between their knees.
If Friess's main goal was to get Santorum elected, the best thing he could have done would have been issue an apology statement and never speak to another reporter again. Instead, he kept going on television and digging the hole deeper. That's because Friess's real objective was to make Foster Friess feel good, not to win an election.
Outside expenditure groups don't appear to be a very effective vehicle for winning elections. But you can't beat their efficacy as vehicles for publicly venting your political rage and stroking your ego in public. Since many donors appear to be mostly after the latter, I expect the super-PAC gravy train to continue into 2016.
Read more breaking commentary from Bloomberg View at the Ticker.