Grab Em By The Midterms

Will There Be a Midterm Wave?

Here’s What You Need To Know

The prevailing wisdom is that Democrats are poised for big wins in this November’s midterms, well-positioned to capture the House of Representatives and perhaps even the Senate, and Republican donors are responding by spending big in the hopes of saving their majorities. Is 2018 another wave election like 2006 for the Democrats, or 2010 for the Republicans? It will be a challenge for Democrats to take advantage of this political environment, particularly given the proliferation of first-time, #resistance candidates who are diverting resources, splintering voters, and outplaying more experienced candidates with a better chance of beating a Republican opponent.

While fundraising isn’t the only factor in winning elections, it is a crucial fuel for every campaign. As pundits muse over yesterday’s 2017 fourth-quarter campaign fundraising numbers, it is worth considering just how important fundraising is at this point in the campaign cycle. To help you do so, we dove into the historical data from previous wave elections in 2006 and 2010 to see if today’s crop of challengers can build a wave.

  • Wave Elections Get Expensive, And The Fundraising Has Only Just Begun: In past midterm wave elections, fourth quarter fundraising represented just 10% of all the money raised over the cycle. This year, we expect about $240 million raised in the fourth quarter by all U.S. House candidates, which could mean total fundraising of as much as $2 billion by the end of next year on House campaigns alone. These figures might seem to suggest off-year fundraising does not help us determine likely election winners, except…
  • This Is When Winning Campaigns Begin To Separate From The Rest: Challengers need a lot of money to beat incumbents, and the average challenger who beat an incumbent in the House of Representatives had twice the amount of cash on hand at the end of the off-year as candidates who went on to lose to incumbents. Challengers finishing 2017 with less than $200,000 cash on hand are unlikely to prevail in 2018.
  • Challengers Don’t Need To Win The Money Race, But They Can’t Get Crushed Either: Challengers who ultimately won their House primaries were not necessarily the best fundraisers in the fourth quarter. However, to be competitive, they should raise at least 30% of the total raised by all candidates in their particular primary race.
  • Crowded Primaries Benefit Challengers: Conventional wisdom may suggest that one serious challenger with a clear primary field would be able to take on an incumbent. However, in wave elections, the sweet spot for the number of challengers in the minority party’s House primary is between four and six. Outside of that range, the chance of knocking off an incumbent drops below 25%. A single challenger may have difficulty overcoming the inherent benefits of incumbency and the resulting political attacks, while too many challengers drawn into primaries against endangered incumbents may result in a circular firing squad.
  • Incumbent Fundraising Won’t Tell You Much: Incumbents and their donors raise more money when they believe the seat is endangered. However, these races may be more fluid due to individual candidate quality and the district in which they are running, so their fundraising numbers don’t reveal too much at this time. To really understand how an incumbent will do, the most telling reports will be second quarter fundraising numbers. These reports, due on July 15, will better gauge how much money incumbents are raising, and more importantly, how it is being used after many of them will know who their particular challenger is.

Wave elections don’t just appear out of nowhere, and hashtags don’t knock doors and get out the vote. Waves need to have the infrastructure – and money – to go the distance, and with 277 days until November 6, there is a long way to go before the final votes are counted. Still, the above analysis should give you an early sense of who the serious challengers are – and aren’t.

Subscribe to Receive Insights

"*" indicates required fields

This field is for validation purposes and should be left unchanged.

News You Can Use

PEACE THROUGH STRENGTH

When The Bulletin of the Atomic Scientists announced last week that they moved the Doomsday Clock forward to two minutes before midnight, they cited the controversy surrounding the Iran Nuclear Deal as one factor contributing to the “bleak overall picture.” The Bulletin may want to make note of the message from U.S. officials, however, who said the Iranian military halted the routine harassment of U.S. Navy ships in the Persian Gulf by its armed “fast boats.”

There were 50 incidents of “unsafe or unprofessional” conduct by the Iranian military over the last two years, including the detainment of ten U.S. sailors in January 2016, but there have been no such incidents in the past five months. While U.S. officials would not speculate on the cause of this welcome development, it is not unreasonable to suggest the Trump Administration’s harder line on the Iranian regime is yielding results, in an echo of President Reagan’s “peace through strength.”

FOOD FIGHT FIASCOS

Move over Big Oil and Big Tobacco, the latest culprits under public scrutiny are…Big Sandwich and Big Coffee. In Britain, researchers are claiming that sandwiches could be responsible for the equivalent annual carbon emissions of 8.6 million cars in that country, and proposed a change in the labeling of prepackaged sandwiches to reduce their carbon footprint.

Stateside, many items in California already have cancer warning labels under a three-decade old law, and now a state judge is due to rule on whether coffee should join black licorice, potato chips, and French fries as being labeled carcinogenic. Will the messaging against Big Sandwich and Big Coffee resonate? It remains to be seen, but we can speculate that businesses and consumers may have little “appetite” for further regulations that raise the costs of doing business and get passed on to the customer, not to mention make it difficult to take real and necessary health warnings seriously.

TL;DR AFTER DARK

At the same time the United Kingdom creates an agency to react to the fake news craze, there is already emerging a new front: fake porn. With the development and rapid public adoption of artificial intelligence (AI), fake porn is proliferating, making it difficult to discern the real thing as technology improves.

Using technology like FaceApp, users can create convincing face swaps that may usher in an era where fake footage of embarrassing or salacious behavior can be weaponized to cause reputational damage or obfuscate the truth. With citizens’ lack of trust in government already impeding its ability to fight fake news, can we expect it to effectively fight fake porn too? Hopefully, we’ll know it when we see it.

LA DOLCE VITA FOR MUCH LONGER?

Italy’s financial institutions are enjoying a welcome recovery, having decreased the amount of nonperforming loans on bank balance sheets by 30% and increased lending credit to households by 2.9% in November 2017 compared to the previous year. Despite these promising trends, there has been no growth in the amount of corporate credit in Italy, likely due to the threat of further regulatory action from the European Central Bank (ECB) that could require banks to hold cash to protect against potential losses from these loans.

The Bank of Italy has already expressed its concerns to the ECB about the hidden ramifications of implementing complex financial regulations, suggesting Italy recognizes that its current recovery cannot continue if banks do not increase corporate lending in the country.

A DROP IN THE BUCKET MAKES A DIFFERENCE

Included in the recent spending law that ended the government shutdown (for now) was a small provision that will save taxpayers one million dollars annually and make Capitol Hill a little greener. The provision, which prohibits the Government Printing Office from distributing paper copies of the Federal Register to Congressional offices unless requested, means that the first place to go to find government agency rules, proposed regulations, and public notices will be online in a searchable digital database, rather than the approximately 300-page booklet that costs $4.50 each to produce and distribute.

As to why it took so long to make this change that has had bipartisan support, Kansas Rep. Kevin Yoder, chairman of the Legislative Branch Appropriations Subcommittee, explained, “There are too many million-dollar expenditures that happen in this government that are overlooked and unnecessary because they are not maybe big enough for folks here to take time to pay attention to.” We see you.