A spate of news stories and blogs are declaring that President elect Barak Obama bought the presidency for $650 million, a point I dispute (see Big Money Bought Obama the White House or £500m election fund 'bought Obama victory').
The stories are of two types, by raising so much money Mr. Obama was able to bamboozle voters with tons of TV, radio and other advertising, or that the money was somehow illegally raised. As to the second point, illegally raising money, I will only comment briefly. Mr. Obama should comply with the law no matter how difficult the compliance and stupid the law. Without any evidence, I believe that when all is said and done, Mr. Obama will be shown to have complied with the law about as well as anyone else.
Money and votes seem to be correlated, but the question is one of causality. Does money buy votes or do good candidates raise more money. Steven Levitt and Stephen Dubner answer that question based on Levitt's peer reviewed work in their best seller, Freakonomics, certainly a valuable and entertaining read. Levitt looked at elections in which the same congressional candidates ran against each other in consecutive elections. This happened a lot, over 1,000 times in his sample.
Levitt then compared the votes and money raised in the two elections. He found that a candidate can cut his or her spending in half and only lose about one percent of the votes. Candidate Obama won by a 7.2 percent spread. It wasn't even close. Mr. Obama won because, given the economic and social conditions, he was the better candidate.
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