Wednesday, March 28, 2012

Wisconsin Recall Election to Test Efficacy of an Old Economic Law – The Law of Diminishing Returns

And Provide a Preview of the Fall Campaign – Can Huge Amounts of Money Convince Voters to Vote Against Their Preferences

Early this summer is the date for the expected recall election of Gov. Scott Walker in Wisconsin.  After winning election in the Fall of 2010, Walker and his cohorts in the legislature passed laws which effectively ended collective bargaining for public employees (except for those public employee unions that favored Mr. Walker). This resulted in a recall election for state senators, that failed to hand control of the state senate back to Democrats.

It did, however, provide the impetus for a recall election of the Governor, a drive that reached about 1 million signatures on the petition to do the recall.  The Democrats will have a primary to select a candidate, after which the recall election will beheld.  Although called a recall the election will really be another election for Governor, with the person with the most votes serving the rest of the term of the current Governor.

The Governor is going to have money on his side, massive amounts of money.  Huge amounts of money.  He already has a lot of money. Although this somewhat biased report in favor of Walker in the Washington Post implies the spending will be equal

Millions of dollars are pouring into Wisconsin from wealthy conservatives nationwide, and labor unions are preparing to pump resources into the campaign of whichever Democrat faces off against Walker

The fact is that billionaire Conservatives are donating far more to the Walker campaign then unions and other supporters will raise for the Democrat. Walker himself already has a campaign war chest of over $12 million.   The money battle will not be equal, Democrats will be swamped.

In economics there is a concept called The Law of Diminishing Returns.  It states that as you consume more of something, each additional or marginal unit provides less satisfaction than the previous unit.  The recall election in Wisconsin will test this law as it applies to money in politics. 

The point here is that even though the Republican forces will have an overwhelming advantage in advertising, the Law of Diminishing Returns states that each additional ad will have less effect than the one before it.  In fact it is possible that the effects may diminish so much that they will be negative, that is, ads for Walker will cause his supporters to vote for the Democrat because they are disgusted and revolted by the negative Republican advertising.  We will see.

Money is important in politics where TV advertising is necessary in an election where  it is required to introduce a candidate and his or her issues. But no one in Wisconsin needs an education on the issue here, it is the performance of its Governor.  Many voters will be turned off by billionaires outside of Wisconsin trying to influence the election. So the result in Wisconsin will be a test as to whether or not the ugliness of massive amounts of negative advertising will matter more or less in determining the outcome.

“I don’t understand why these tea party groups stay with Walker,” says Freeman, 44, a fast-talking, ruddy-faced, keys-on-the-belt-loop career counselor who put her business on ice for the duration of the campaign. She thinks Walker’s campaign will ultimately alienate some tea party members. “You want to really tick off a Badger? Tell them their campaign’s being run by people from out of state.”

In the rest of the United States, the same thing will be happening in the fall election, even though the Obama campaign seems oblivious to that fact.  Hundreds of millions of dollars of outside money from Conservative billionaires who want the country to operate on their principles will flood the air, and this will be far more than any outside money raised by the Obama supporters.

But will that make a difference?  Will voters be influenced to vote against Mr. Obama by the massive negative ads or will they recoil in horror at the prospect of billionaires trying to buy an election and vote and support Mr. Obama?  Wisconsin will provide a pretty big clue, and that is just one more reason why the recall election there is important.

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