The IA and NH money pit

Now that we're on top of an extremely close IA and NH contest, it's safe to tell a secret.

The only purpose that the IA caucus and NH primary have is to suck the funds out of a campaign at a prodigous rate. There is no real significant advantage beyond bragging rights.

Stay with me here. It costs an extreme amount of capital to win a caucus, in manpower, time, and money. There are at least three candidates who will be over by NH just because of the money that they spent in IA.

What was that you say? A caucus win will cause a windfall for the lucky candidate? Not really. Because of the shortened primary schedule (it should be over in five weeks), it will be exceedingly difficult to raise money AND campaign in 20 states. Even with surrogates, the well generally runs dry by the end of the previous year. Unless the candidate has an established avenue to raise funds without having to go out and ask for it, there just isn't enough time.

Votes cost money. The best you can hope for is a clean source of money. Without money, there is no campaign. This also goes beyond ads and into paid staff and outreach. GOTV efforts are what really wins elections, not ads.

NH is basically the same. That's why so many candidates have won IA and/or NH and quickly folded. They spend all of their capital in two states and neglect the states that really matter, the mini-Tuesday and super Tuesday states. While one group of candidates are blowing their wads trying to gain or keep a lead, other candidates are quietly gearing up offices in the other states, putting organizations on the ground that will be instrumental in turning people out to vote. If you look at spending decisions, you can see where candidates who clearly have enough money to match spending dollar for dollar spend just enough to force the other campaigns to spend more. At what long term cost is getting within five points of the front runner?

It's really kind of puzzling why most of the candidates decided to run in IA and NH when they have extremely limited funds. It would have been much more sensible to bypass both and just work the mini and super-Tuesday states.

:thumbsup:

Here's why, if the campaign survives both (note, I did not say win or even "make a decent showing") and goes on with the funds to continue afterwards, it has demonstrated elecctability.

When you come down to the basics, electability = cash.

to a point.

The most effective way to prove electability is to win the most delegates. The most effective way to prove electability is to work the states that actually matter rather than get caught in a pissing match in IA or NH.

Of course, if you have enough money on hand to force your opponents to keep spending theirs, then you have an advantage.

Of course, if you have enough money on hand to force your opponents to keep spending theirs, then you have an advantage.

That's precisely what the "pissing match" is all about. Notice, all of the candidates got caught up in it to some degree or another.

Now, who has the money? Those are the candidates that are really in the race.

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How much has he spent to get this close to Dean?

I read an article a couple of weeks ago that Clark spent 4.5 mil on ads alone vs. 3.5 mil from Dean. I'm sure he's spent more since that article was written. He better watch his burn rate and start putting people on the ground in the other states, if it's not already too late.

Clark did a nice tour of the south and a certain large dog is makin some phone calls

A swing through is all very well and good, but does he have the staff to organize on the ground? Time is definitely not on his side. And the big dog may or may not be making phone calls.

5 mil + is more than a quarter of what he raised last year, including the matching funds. That's alot of money on one state.

it's quite possible Clark has more cash than Dean right now...and I'm pretty sure the phone calls are being made

if Clark has more cash on hand than Dean. Dean started Q4 with 12 on hand and raised 15 mil. Clark raised 18 mil altogether. Dean would have had to spend 9 mil over and above what Clark spent to break even. Considering how cheap the campaign is, I'd be surprised if that happens. And Dean still raises money much faster than Clark, so the well can be replenished at a faster rate.

But then, it all comes down to what it's being spent on. I know that Dean has opened campaign offices or has an organized presence in the first 27 states. I don't know where Clark stands on that.

Matching funds for raising $14 million ($3.5 mil 3Q, $10.5 million 4Q) = $6 million+.

How cheap Dean's campaign is? Not anymore, since he's bought 3X the # of TV ads in IA than any other competitor--Dean's burn rate for the past 3 weeks has probably been at least 20-25% higher than Clark's. Reports indicate that he's just spilling money in IA--Clark hasn't spent money to rent cranes to primp for debates for example; throwing town halls isn't all that expensive when you're using churches, schools, and VFWs and recycling your signs.

And I'm not so sure that Dean is raising money money at a faster rate than Clark anymore. If you check out Clark's online "Train to NH" fundraiser, you notice that Clark has raised a rather Dean-like $725K online in 6 days (with an avg. donation of around $95).

Dean supporters sort of assume that they invented online campaigning and they're the only ones who can do it. Well, it looks like Clark and his ex-draft people may have finally caught up...look out!

Oh yeah, I know that Clark has offices open in just about all of the states through February. I don't know how many super Tuesday states he's got covered, though (I can only confirm New York).

:)

Also: Lobo, I'm not sure when you read that article, but if Clark has spent more on his ads, he's certainly getting bang for his buck out of them. Dean has inexplicably allowed Clark to take the initiative and out advertise him in a bunch of the Feb. 3 states, which is part of the reason Clark has managed to pull into the lead or tie in OK and AZ. Clark also isn't spending at all in IA, whereas Dean has seriously poured a lot of money in there in the last couple of weeks. Also, I believe that for both Dean and Clark, whatever money they dropped on ads that went up on that point was good until the primary for those ads--so no further burn is required for wherever those ads went up (time is so short and both campaigns have enough money that an ad buy for either campaign in an early state is simply for every day until the primary).