Money Can’t Buy Happiness (or politics)

Money Can’t Buy Happiness (or politics)

medium_8299369312Well, to a point. It certainly didn’t help Eric Cantor who recently (on June 10) lost his race to House incumbent Dave Brat. The story is interesting for a lot of reasons, but we’re talking about it because Brat, a college professor, ran his campaign on a shoestring budget.

Eric Cantor has long been the favorite of big Wall Street donors, businessmen, and many Republicans had a cash advantage of 26 to 1 entering Tuesday’s race. But his $5.5 million raised and position as House majority leader weren’t enough to win him reelection. Investments by the American Chemistry Council, the American College of Radiology, the National Rifle Association, and the National Association of Realtors were substantial. He was also supported by 377 political action committees representing all economic sectors.

So what went wrong?

Dave Brat ran a campaign with a budget of only $200,000. Outside groups didn’t even pay for television ads. His campaign manager was only 23, a college graduate only as of 2013. With only two paid staffers (to Cantor’s 23), Brat relied on conservative talk radio and grassroots opposition to immigration reform—two very hot topics in Republican primaries.

This serves as a reminder to many facing primaries—no amount of fundraising is a guaranteed win. The unlikely win is sending shockwaves throughout the Republican Party because someone won without the influence of outside money—a rarity in today’s world, politically or otherwise.

Cantor’s campaign was heavily financed by many, but the top five were Blackstone Group, Scoggin Capital Management, Altria Group, Charmer Sunbelt, and Goldman Sachs.

Saying Brat’s victory came as a surprise is an understatement.

Had Cantor’s position felt threatened, it is likely that even more money would have been funneled into the campaign, leading to a district spending war. Cantor’s defeat has House Republicans questioning ongoing fundraising efforts on behalf of the party, as he was responsible for much of the money brought in.

Cantor’s associations with political nonprofits who offer large donations will likely strengthen as turnover proceeds. It’s very likely that his strength in fundraising will lead to his controlling a super PAC—we likely haven’t seen the last of Eric Cantor’s dollars.

(photo credit: allaboutgeorge via photopin cc)

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The Young Wealth Team