Will Digital Money Matter for Republicans?
Scott Bland has a nice story about Republican candidates who may turn to “digital” money as a supplement or substitute for traditional big-money givers and bundlers. They are following the examples of Barack Obama in 2008 and perhaps Howard Dean in 2004. The strategy could allow candidates who can’t compete with, say, Jeb Bush in big money to raise plenty of money from large numbers of small donors.
So why is money important in presidential nomination politics? It turns out that it plays three different roles.
1. Money can buy stuff! Candidates with money can hire more staff, run more ads and open plenty of field offices (or they can blow it all on comfortable planes and spiffy headquarters). However, it’s not really clear how important that is. Claims about how much a candidate must have should be taken with a grain of salt: Remember that Rick Santorum won the Iowa Caucuses last time with little more than a few paper clips and a rubber band. Direct spending matters in presidential primaries, but with so much news media coverage, ads aren’t going to be the only source of information for voters.
2. Money is a form of scorekeeping. Yes, there’s plenty of media coverage -- but fundraising is a good and seemingly neutral criterion that allows the media to sort candidates. Those who raise money receive coverage. Party actors can use money as a shorthand, too. When politicians, campaign and governing professionals, activists and donors, formal party officials and staff, and party-aligned interest groups need to figure out which candidates to back, fundraising totals may be a consideration. It's also a weapon for candidates: Jeb Bush is apparently hoping to use his fundraising total to intimidate would-be challengers.
3. We know that some endorsements are important in nomination politics, probably because they are part of a signaling game that helps party actors coordinate their actions. Donations are a form of endorsement.
And a dollar isn’t always a dollar: We’ve known for a long time that self-funded congressional candidates do worse than those who raise their money from others.
So: what about online money?
It really comes down to the third category: What digital fundraising signals to party actors. If they take it seriously, who do they believe is speaking through these donations? The individual donors? In that case it’s probably interpreted as a signal of what (some) activists are thinking. The party-aligned media? Even very connected party actors probably find it hard to follow all the talk shows and web pages, but they can assume that a candidate's sudden surge in small donations was preceded by media attention. Or maybe party actors think of online cash as an early indication of what ordinary party voters are up to.
That’s the framework. As for the specifics, however, we still have questions. Reporters talking to the campaigns and to party actors will find out more. I’m sure candidates and campaigns welcome online contributions, but it isn't clear how these donations matter.
This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.
To contact the author on this story:
Jonathan Bernstein at firstname.lastname@example.org
To contact the editor on this story:
Max Berley at email@example.com