One of the most surprising things to come out of this election cycle is how little value Mitt Romney appears to have gotten from the big money advantage he was expected to have. All during the summer, there were regular press reports about huge fundraising hauls made by his campaign, official Republican Party organizations, and Republican-oriented, independent political action committees.

These announcements were, to a certain extent, designed to dispirit Democrats, making them fear an avalanche of advertising in the fall that would overwhelm their side’s resources. And it worked. Although it is hard to say to what extent Romney’s perceived money advantage was responsible for a lack of enthusiasm on the Democratic side, there is no question that through the summer Democratic enthusiasm was well down from the last two presidential cycles and Republican enthusiasm was up, according to Gallup.





In recent weeks, it’s clear that Democratic enthusiasm is rising, and it also turns out that there was much less to Romney’s money advantage than was previously thought. According to a Federal Election Commission report on Wednesday, official Democratic Party organizations have substantially outraised Republicans organizations and have more cash on hand going into the final weeks of the campaign.

The report also shows that there is still a very considerable amount of money, close to $600 million in PACs, but it is hard to say what the breakdown is, politically. Labor PACs have $129 million in cash on hand, and presumably lean Democratic, but it is hard to say how corporate and nonconnected PACs will ultimately break in terms of contributions, much of which will probably go to congressional campaigns of both parties.

While it is true that there are a number of so-called super PACs spending considerable sums independently for both candidates – federal law prohibits coordination with official campaign committees – it’s also apparent that these have not been very effective so far. Moreover, although Republicans got out in front early with super PACs, Democrats are catching up quickly.

This is not surprising. Campaign funds under a candidate’s direct control are more valuable than under party control and far more valuable than that being spent on his behalf. That is because independent groups have their own agendas, don’t necessarily know where or how best to utilize their resources due to the prohibition on coordination, and many may simply be incompetent. Journalist Ben Smith recently explained the futility of a lot of independent PAC spending:

The secret story of political money has always been the disdain with which much of the political class views donors: They are meddlers and dilettantes, full of terrible advice and inane questions. And donors are justifying that disdain in 2012 as never before. The casino magnate Sheldon Adelson, by far the worst of this cycle’s political investors, put $10 million behind Newt Gingrich after he had effectively lost the primary campaign. Other groups have poured millions into states their party is unlikely to contest — like Pennsylvania. And perhaps worst of all, their messages often have more to do with donors’ priorities than with a winning ticket. The Koch-backed Americans for Prosperity has drawn particular grumbling for ads whose goal, critics say, is more about ideology than victory in November, its daily message determined, one rival SuperPAC operative jabbed, by “whatever the Koch brothers had for breakfast.”

Another dirty secret about independent PAC spending is that it is often guided more by what makes money for the managers than what’s best for parties and candidates. They typically direct TV advertising toward agencies they themselves own and where they get a 15 percent commission; direct mail campaigns are conducted by companies they own as well on which similar commissions are paid; polls are conducted by polling firms they own or are affiliated with; and of course the managers of PACs are paid well in the form of salaries and bonuses. Those who fund super PACs are often political neophytes who have no idea that they are being ripped off and taken advantage of.

It is for this reason that having the most money is not the ticket to electoral success that everyone assumes it is. For example, if one examines the list of candidates who donate at least $1 million to their own campaigns, you see that they generally lose. In 2010, only 12 of 58 candidates doing so won. Among the losers was Linda McMahon, who spent more than $50 million in the tiny state of Connecticut and still lost. (She may have a better chance this year, however.) Jeff Greene spent $24 million running for the Senate in Florida and couldn’t even win the primary.

A similar story is told in other years as well. In 2008, millionaire candidates won only 11 of 51 races; in 2006, they won only 5 of 42 races; in 2004, only one millionaire candidate won out of 30 who ran that year; and in 2002, only 3 out of 32 candidates won.

I suspect that Mr. Romney thought he could run his campaign the way he ran Bain Capital. There, he was mainly concerned with bringing in clients and money for investment. Others handled the nitty-gritty of running the companies Bain acquired and squeezing profits out of them by outsourcing, layoffs or whatever. As head of the company, Romney was not involved in such day-to-day activities any more than the CEO of any other big corporation is.

I think Romney had the same idea of his role in the presidential campaign: His job was to bring in the campaign contributions, others would handle the details of where and how to spend it. It may not have occurred to him that there is a lot more to being a successful presidential candidate than just raising a lot of money, such as having coherent policies that are popular with voters or having well-rehearsed responses to questions that will inevitable arise, such as why he won’t release more than 2 years of tax returns. Judging by his campaign thus far, it’s clear that Romney still hasn’t thought through some of these basic things.

Or perhaps Romney just thought this was a slam-dunk year for whoever got the GOP nomination and once that was achieved the general election would be a breeze. Clearly that has not been the case, with Barack Obama holding a steady lead in the polls. Although Romney may still pull it out, I don’t think it will be because he raised more money and spent it better.