Wait a minute – What is the price of a presidency?
Super PACs are a new phenomenon in American politics; actuarially this year’s presidential election will be the first post-Super PACs. Super PAC is an “independent” committee that may raise an unlimited amount of money from corporations, unions, associations, and individuals. Before the change in 2010 the traditional PACs where limited to only receiving up to $5,000 per year per individual/company/etc.
Many commentators have interpreted this change in campaign funding as the reason for why the presidential election 2012 looks to properly be the most expensive election yet. According to opensecrets.org $43,922,722 has already been spend, by outside sources such as the Super PACs, in the Republican presidential primaries. That is already 20 % of the aggregate outside spending in the 2008 presidential election. This might not sound like much, but we should remember that the twenty percent is Pre-Super Tuesday and this year we do only have the Republican primaries, with still four candidates in the race.
If we consider the spending on the various presidential campaigns as the bidding sums for the presidency of the untied stats, then what economical reasoning can we find for this price increase? Well in economical theory the price that a given individual is willing to pay for a given commodity, is the subjective value of this commodity. What the individual is willing to pay for the commodity varies and is influenced by a wide range of factors, which include other individuals’ willingness to pay for the same commodity. This is essential the economical explanations for actions. Where the commodity is the same but where the price increases until the individual that values the commodity the most has been identified. Another reasoning for an increase in price could be that the perceived change in the commodity’s characteristics. But since that the president’s power has not changed over the last 12 years I do not think that the reason for the increase of 34.5 % between 2000 and 2004 and 27.4 % between 2004 and 2008 can be explained with a perception of the commodity. Which leaves us with the conjecture that the affirmative price of the presidency has not been found, and therefor the bidding-war must continue.
