I keep hearing defenders and even objective analysts saying that the Obama campaign’s financial “burn rate” isn’t that big a problem because the Obama campaign is making long term “strategic investments” in “infrastructure” that will pay off down the road (Sound familiar?). Here’s Obama campaign press secretary Ben Labolt: “Since we knew from the outset that Republican super PACs would likely outspend us on the air, we made a decision to invest early in building the largest grassroots campaign in history so that our supporters could engage in 500 days of persuasion with their networks.”
I have three responses to this. First: “We’ll see.” Investments can only be verified as wise when they pay off.
Second, I’m not sure it’s even true. If you look at what the Obama campaign is spending on, it’s not immediately apparent it’s even spending a lot on all of this infrastructure stuff. It’s certainly not true that all of the campaign’s deficit spending is the result of anything other than ad-buys.
In July, Obama for America took in $49.1 million and spent $59 million. Of that, Obama spent more than $48 million on advertising (more than double Romney’s expenditures). The breakdown: $39 million on conventional ad buys and $8.7 million on online ads; $2.9 million on payroll, $1.2 million on payroll taxes (!), and $900,000 on polling.
While I am sure the Obama campaign has
invested spent a lot of money on things that can be described as “infrastructure” — lots of campaigns do. But that doesn’t explain the high burn rate. Which gets me to the last point. This explanation is largely spin. It changes the subject from Obama’s massive “investment” in negative ads attacking Mitt Romney’s character. That’s an ugly story for the hope-and-change guy — not just because it makes him look cynical, sinister, and hypocritical, but also because it underscores Obama’s profligacy. (Remember in 2008, Obama said his success running a presidential campaign proved what a good executive he was.) And the fact that they blew all of that money on ads and haven’t got much to show for it, undermines the claim that this is a brilliant campaign.
Better to explain away all of that spending and all of that nastiness as a wise “investment” in the “grassroots.” It’s a smart gambit by the Obama campaign, but I’m at a loss as to why the political press should fall for it.