9th election report from the USA:
Will big money decide who becomes the next president of the USA?

Published on 2016/06/06
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Lots of people in Germany believe that in the USA it is “big money” that will ultimately decide on who becomes the country’s next president. “Money decides the election” was the title story of DIE ZEIT in October 2015. “Wealthy donors and billionaires dominate the US presidential election,” was the news magazine’s assessment. The report was accompanied by a picture of Jeb Bush, who at the time had raised a total of $100 million.

Eight months later and one thing is clear: The basic formula that money buys power simply isn’t true, not even here in the USA. Jeb Bush’s $100 million equated to a grand total of just four delegates. And like the other Republican candidates, Bush was forced to concede defeat to Donald Trump, even though Trump had spent much less money than any of his opponents.

On May 21, the Washington Post revealed: “Running as a self-funded candidate not beholden to traditional donors, Trump has so far raised and spent less than many of his Republican opponents and far less than Clinton. All told, Trump and his supporters have raised about $59.4 million so far, compared with Clinton’s total of nearly $300 million.” At that point, Clinton and her rival Sanders had both spent about $200 million, compared with Trump who had spent a more modest $56.5 million.

Campaign fundraising, normally subject to limits in the USA, is today dominated by indirect donations to Super PACs (Political Action Committee). As the Washington Post reported, Clinton enjoys the support of a number of wealthy mega-donors, such as Alexander Soros (son of George Soros), Warren Buffett, the billionaire Haim Saban and the Slim Fast founder S.Daniel Abraham. In contrast, 62 percent of donations made to the campaign of the left-wing populist Sanders are small-dollar donations – only 21.3 percent of Clinton’s contributions came from small donors.

It is not at all easy to provide a definitive answer to the question of whether “big money” will influence the election outcome. On the one hand the thesis cannot be entirely wrong: After all, without the massive financial support of a small number of billionaires, Clinton, rocked by countless scandals and rhetorically far inferior to her competitors, would have no chance against her own party’s Sanders, let alone against Trump. If she does go on to win the presidential race, it will be something else she can chalk up to the massive financial support she has received.

On the other hand, Trump’s string of victories just go to show that money doesn’t have to be the most decisive factor. Trump’s success is incontrovertible proof that PR is more effective than advertising. This was the thesis first put forward by the American marketing guru Al Ries, way back in 2003 in his incredible book “The Fall of Advertising & the Rise of PR”. Ries wasn’t referring to political communication, he instead focused on traditional product advertising and PR. Ries based his thesis on the successes of companies like Starbucks, Google, Red Bull, Microsoft, Oracle and SAP, demonstrating that, “all recent marketing successes have been PR successes, not advertising successes”. Ries showed that PR, i.e. professional press and public relations work, is more credible than traditional advertising, something that has since been proven by countless scientific studies.

More than anything, Trump’s success is founded on his understanding of the mechanisms of press and public relations. Trump’s constant stream of provocative statements enabled him to generate much more publicity than his Republican opponent Jeb Bush, for example, despite the fact the fact that Bush had far greater financial resources at his disposal.

Back in October 2015, James Poniewozik, the New York Times’ television critic, analyzed Trump’s campaign and argued that to understand its success one had to first understand the “attention economics of modern media”. And Jeff Guo wrote in the Washington Post in December: “It’s not just that Trump is willing to be provocative – he’s exciting so many people because he says the things they feel they can’t say”. In doing so, it isn’t just the questionable conventions of political correctness that he has repeatedly violated, much to the chagrin of the left-wingers who developed them, but also the conventions of reason and common sense. Trump’s provocative Tweets, and the entirely predictable media reactions to them, have been far more effective than his opponents’ most expensive campaign ads. All of this puts the opening quotation from DIE ZEIT, “Money decides the election”, into perspective – even if it is not entirely false, as demonstrated by the case of Hillary Clinton.

About the Author

Dr. Rainer Zitelmann is one of the leading experts for the strategic positioning and communications of companies.