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Revealed: Why the Pundits Are Wrong About Big Money and the 2012 Elections

One campaign funded largely by the super-rich lost to another funded by same, and money mattered big-time in House elections.

Photo Credit: Jean Lee/


Analysts of American elections routinely confuse the voice of the people with the sound of money talking. Habitual modes of thought and long standing incentives to reaffirm the democratic faith encourage grasping at straws. Pundits become hopeful that big money doesn’t matter as much as they feared, and that democracy is alive and well.

In the Spring of 2012, however, as Mitt Romney’s Super Pacs carpet bombed the rest of the Republican field into oblivion, falling into that trap became much harder. It was obvious that a handful of multimillionaires were playing pivotal roles in the election. Despite some talk about small donors in President Obama’s campaign, the general election enhanced the impression that American politics was sliding into a new and sinister phase. Once Romney clinched the nomination, his campaign paused to restock its war chest in advance of the Republican convention. The Obama campaign seized the opening. Instead of waiting until fall to deploy its heavy artillery, first the president’s formal campaign vehicle and then its nominally independent SuperPac laid down monster barrages of negative ads.

Sheldon Adelson, Harold Simmons, the Kochs, and a raft of Wall Street 1 percenters responded by opening their wallets even wider to the GOP, determined to engineer their own vision of “real change.” As campaign expenditures soared past all records, unpublished polls showed voters of all persuasions – even many Republicans – filled with revulsion at the spectacle of elections so clearly compromised.  

Alas, in America, it’s tough to keep a bad idea down. Only hours after polls closed on Election Day, a revisionist wave began building that downplayed the role of big money. Analysts asked if the costly Republican failure to retake the White House and a handful of Senate reverses meant that all the handwringing about the torrent of political money was misplaced:

“Republican presidential candidate Mitt Romney was supported by outside groups that outspent allies of President Barack Obama by $260 million. And yet he still lost. This ultimately raises the question of whether the much-feared independent spending unleashed by the Supreme Court's 2010 Citizens United ruling was a dud. After all that money spent by independent groups largely financed by billionaires and millionaires, the government looks almost identical to the way it did before. Obama remains president, the Senate is firmly Democratic and the Republicans control the House.” (Paul Blumenthal, Huffington Post).

The skepticism quickly hardened into conventional wisdom. Even the Sunlight Foundation, which, along with the Center for Responsible Politics, has probably done as much as any institution to deepen awareness of how money corrupts American democracy, joined the parade. Its assessment of “How Much Did Money Really Matter in 2012?” investigated “the emerging post-campaign narratives” according to which “all the outside money (more than $1.3 billion) that poured into the 2012 election didn’t buy much in the way of victories.” Its conclusion was that “the story holds up: we can find no statistically observable relationship between the outside spending and the likelihood of victory.”

Here we choose our words carefully. It is impossible to assess precisely the totality of money’s influence on the 2012 elections, but notions that it did not matter can be immediately dismissed. The evidence we have reviewed suggests exactly the opposite: that most of 2012’s little piggies went to market.

Let’s take the House elections first. If you want to understand money’s role in an election, the best idea is always to try the simplest approach first. Recognize that candidates and Super Pacs coordinate, whatever the law. Thus, don’t try too hard to artificially separate “outside” from “inside” spending, where the latter refers simply to expenditures by candidates’ formal campaign committees. Instead look at total spending by or on behalf of candidates and then ascertain whether relative, not absolute, differences in total outlays are related to vote differentials.