Freakonomics Radio
Hosted by Stephen J. Dubner
We all know the answer is yes. But the data -- and Rudy Giuliani -- say no.
1,650 words · 7 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
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From APM, American Public Media and WNYC, this is Freakonomics Radio on Marketplace. Here's the host of Marketplace, Kai Rizdal.
And so it's done, the New Hampshire primary. Mitt Romney had it wrapped up pretty early last night, so all the who got how many votes and what it all means in the grand political scheme of things has been done to death by now. So we're not gonna.
We're gonna do the story our way, campaign finance à la Freakonomics, our once every couple of weeks chat with Stephen Dubner, the co-author of the books and the blog of the same name. It's all about the hidden side of everything. Hey Dubner, welcome back.
Hey Kai, thanks for having me. So we're all wildly surprised that Mitt Romney won big last night, aren't we?
Yes, yes, wildly surprised.
And it's just as obvious why Romney's been winning, right? At least if we listen to his rivals. Here's Newt Gingrich, who came in a distant fourth place last night.
Now we gotta go back and figure out how you run in an environment where you clearly have two guys who are gonna say things that aren't honest and who are gonna spend millions of dollars doing so.
And here's Rick Santorum, who finished fifth in New Hampshire.
I'm a little bit behind the curve in the sense that Governor Romney has been spending a lot of money.
Well, it's not like they're wrong, right Dubner? I mean Romney does have, Romney has deep pockets and just today, right? His campaign said we raised almost $24 million in the last three months, in the last quarter.
That's right. And so that makes more than $50 million for 2011. And in previous campaigns that he's run for senator, governor, and president, Romney has spent $54 million of his own money. But you know who else put a lot of money into their campaigns? Let me give you a few lovely names. Steve Forbes.
Yes.
Linda McMahon.
Oh, yeah.
Meg Whitman. And you know what? None of them won anything, did they?
Okay, so this is the hidden side of everything part? Is that where we're going here?
This is the hidden side of everything. Here's what I want to tell you today, Kai. Money does not buy elections, at least nowhere near what we've always been told. Here's Steve Levitt, who's my Freakonomics co-author. He once conducted a study of congressional elections where he tried to isolate the effect of campaign spending from all the other factors.
When a candidate doubled their spending, holding everything else constant, they only got an extra 1% of the popular vote. Same, if you cut your spending in half, you only lose 1% of the popular vote. So we're talking about really, really large swings in campaign spending with almost trivial changes in the vote.
All right, here's the thing. Steve Levitt, very nice guy, knowledgeable economist. Sadly, though, I don't believe him. Because if you look, it's always the guy with the most money who wins.
You are right. It is almost always the guy with the most money who wins. That is what we know as correlation without cause. So let me explain. When it's raining out, everybody's got an umbrella. And we know that. Those things are correlated. But you know what? The umbrellas don't cause the rain. We know that, too. Here's the thing. Winning an election and raising money do go together, but it doesn't seem as though money actually causes the winning either. It's just that the kind of candidate who's attractive to voters also ends up, along the way, attracting a lot of money. And the losing candidate, nobody wants to give money to that guy.
Right. It makes sense, but what happens when you tell politicians this? I mean, this can't be a message that they want to hear, right?
Yeah. No politician's going to step forward and say, "Please don't send me your money. I don't want it. I will not use it." You know? Look, campaign fundraising has become an arms race. And as in any arms race, the first casualty is logic, right? But let's look past New Hampshire, back to Iowa last week. Here's some good evidence for these politicians. Rick Perry spent $4.3 million on advertising there, which was nearly triple what Romney spent, and he got 10% of the vote. Rick Santorum, on the other hand, spent only $30,000 for ads in Iowa, and he lost to Romney by just eight votes. So much for the money argument.
All right. So far, this is a lot of you talking about politicians and money. Did you actually talk to any politicians about money?
Well, you think they're going to come out and say, "Ah, no, I don't need the money."
Well, no. All right. Fair point.
I did find one former politician, at least he says he's former. You remember Rudy Giuliani, I gather, yeah?
I do. Twice the mayor of New York City, and for like, five minutes in 2008, the frontrunner.
That's right. Well, I asked him if money buys elections.
So campaign spending doesn't mean anything because you can spend it incorrectly. I have lost an election by spending it wrong. I won an election, my first election that I won. I won when I was outspent in a Republican primary. We can see recently in Mike Bloomberg's election. Mike Bloomberg spent $100 million and he won by 4%.
So I asked Giuliani, what advice he would give to candidates?
I tell candidates, it's always better to be the candidate with the most money. But you can win without it.
To finish the sentence, it's better to be the candidate with the most money because that means you're the most popular, right? People like you the best.
It's exactly right. It's like saying it's better to be the radio show host with the most money, but really what you want to be is the most popular, so.
And sometimes that goes together. I don't know.
Sometimes it does. Sometimes it does.
Stephen Dubner, Freakonomics.com is the website. He's back in a couple of weeks. Dubner, we'll see you.
Thanks, Guy.
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Page updated September 30, 2026 · transcript and summary are machine-generated
