Rick Perry and Gardasil

In September, Michelle Bachman attacked Rick Perry’s financial ties to a

pharmaceutical firm (Merck) that manufactures the HPV vaccine Gardasil. These ties have proven to be problematic for Perry “whose bid for the White House depends heavily on support from religious conservatives,” a group that is generally opposed to the Gardasil vaccination. Perry, who received about $30,000 from Merck for his gubernatorial campaign, tried to make Gardasil mandatory for young girls in 2007 through an executive order. It is unclear if Merck donated to Perry because he occupied a favorable position (the political man model: he supported Gardasil even without the funds) or because they tried to influence his policies (the economic man model: he supported Gardasil in return for the funds). However, according to Mueller the distinction between the “political man” and the “economic man” collapses when campaign spending generates additional votes.

The article states that Perry has to balance between both the Business and the evangelical Christian wings of the Republican Party. However, to me it seems more like he has to balance between receiving campaign funds that will increase his opportunity to get elected (because of increased exposure) and alienating voters with the sources of these funds. By asking for clarifications about Perry’s policies Michelle Bachman’s accusations might have alienated voters opposed to Gardasil, just like Informational Campaigning can. However, she also used it as a form of Promotional campaigning by questioning his integrity and character and making him seem like an untrustworthy candidate, which at the end of the day will probably have a more detrimental effect for Perry’s campaign.

An Ad War

The WSJ reports that the GOP has released an ad war. http://online.wsj.com/article/SB10001424052970203911804576653603558157010.html As GOP presidential hopefuls attempt to win their party's nomination, voters can expect to see a dramatic increase in political advertising. Some advertisements are persuasive such as the popular Cain ad that we viewed in class. These ads are not meant to be informative. As Mueller stated in section 20.2 the purpose of persuasive advertising is to avoid isolating voters. Candidates want to appeal to the majority of voters. Since these ads do not mention specific policies, voters are more likely to focus on the candidate's personal characteristics they can relate to. Persuasive campaigning seeks to reach out to all groups to increasing the number of votes received on election day.

The second type of advertisements are called informative ads. Mueller claims that informative advertising increases the probability that some groups will vote for a candidate while decreasing the probability that they will vote for another candidate. Negative ads could be classified as informative ads because they are more likely to be factually accurate compared to persuasive ads. They can also prompt voters to obtain more information about a candidate's policy platform. Recent GOP TV ads have been attacking the president and other GOP candidates. For example one ad by Rick Perry called Mitt Romney a flip flopper who was responsible for Obamacare. Mueller believes this is common in campaign ads because candidates will attempt to distinguish themselves from the other candidate and claim that they represent the wishes of the median voter. They also want to distinguish themselves to attract contributions and enhance their chances of winning. However, they don't want to distance themselves too much because they could also lose the support of voters. The Perry campaign has created online video ads that have criticized Obama by implying that he is responsible for our economic troubles. At the end of the video, Rick Perry announces his candidacy and says "It's time to get America working again." These negative campaign ads are perhaps healthy for democracy because they encourage voters to seek more information, like Romney's position on healthcare. They also support Mueller's theory that political ads serve to persuade and inform voters.

The AMA and Regulation

The theory of regulation presented in George Stigler’s “The theory of economic regulation” is one where regulation is demanded by industries, often as a way to keep or maintain a monopoly. It should come as no surprise then that one of the most regulated industries in America, the healthcare industry, has multiple members that have benefited from regulation.

This past week final regulations came out on accountable care organizations (or ACOs for short). The substance of these regulations, or even ACOs for that matter, is not of immediate relevance to us here. However, the reaction of the industry is quite telling. Hospitals “rejoiced” while insurers worried about further concentration of the health systems that they already view as monopolies. The American Medical Association, or the AMA, came out in support of the regulation. They, perhaps more than any other player in the industry, understand how this sort of regulation can drive business.

The AMA has the sole right to create and distribute “Current Procedural Technology” codes, or CPT codes. These bar codes simply correspond to each different procedure and allow for billing to be uniform across hospitals. Pretty simple right? However, some estimates say they bring in as much as $118 million dollars a year from the selling of these codes and the corresponding books. This is about 40% of their revenues. Regulation surely has helped some players in the health care industry, and so it’s no surprise to see so many excited or disappointed with this new chapter to the library of healthcare regulation that will surely create new monopolies in this industry.

Herman Cainpaigning

A recent Washington Post article reported that Herman Cain has been trying to be more tactful when it comes to his appearances as a candidate. Although being the “blunt” candidate has been part of his appeal, it has also meant that his words have come out wrong at times which the article reported has “forc[ed] him to clarify comments on abortion, immigration and terrorism suspects.” The article has accounted for this change because of Cain’s change “adapting from a longshot candidate hustling for any media attention to a front-runner who must be more selective with his time and disciplined in his message.” In other words, as Cain has become more popular as a candidate he has had to tread more carefully when making statements.

This change that has occurred with Cain is exactly as Mueller predicted. Drawing from the Downsian model, Mueller stated in his book that, “With purely informative political advertising, a candidate increases the likelihood of some voters voting for her when she informs them of her position, but decreases the likelihood that some other voters vote for her.” As the article noted, Cain’s missteps have caused him to clarify his positions on various topics—something that Mueller says could take votes away from his campaign. This is due to the fact that he would end up making additional distinctions between himself and other GOP hopefuls, thus pulling himself further away from the median voter and the chance of winning the nomination.

Although Cain now is now trying to appeal to the median voter, this was probably not the case at the beginning of his campaign. As we talked about in lecture, money buys votes and the only way a candidate can earn money is by giving voters enough incentive to do so—that is, by distinguishing himself from the other candidates. When Cain was, as the article says, a “longshot candidate,” it was probably more beneficial for him to say exactly what was on his mind in order to get the attention of voters and give them incentive to contribute to his campaign because he would be different than the other candidates the GOP would offer. But now that Cain is a frontrunner for the Republican nomination, it makes sense for him to increasingly minimize the distinctions between himself and other candidates in order to win votes.

Negative Campaigns vs. Mueller

In Mueller’s Chapter 20.2: Models of interest group behavior in politics, he differentiates the effects of informative and persuasive campaigning on voter behavior. Mueller defines informative advertising as when a “candidate informs voters of her position on x”. This type of advertising increases the probability that some voters will vote for the candidate but also decreases the probability that other voters will vote for the candidate. On the other hand, persuasive advertising increases the probability that all voters will vote for the candidate by highlighting issues that all voters agree on.

Mueller fails to take into account the role of negative campaigning commonly referred to as “attack ads”, but negative advertising shares characteristics of both informative and persuasive campaigning. In this article http://www.miller-mccune.com/politics/lies-and-campaign-advertising-4757/, Amy Ramos proves how even though the public claims they hate negative campaigns, we actually benefit from this type of advertising. Vanderbilt’s John Greer claims, “Positive ads are less likely to be about issues, less documented in their claims and far more vague than negative ads. Those who want issue-oriented campaigns should in fact see much merit in negative ads.” It is obvious that most candidates use persuasive advertising because it increases the probability that all voters will vote for them, but candidates also use negative ads to both inform voters of the negative aspects of their opponent while persuading the voters not to vote for their opponent. Consequently, under Mueller’s model, we could predict that negative campaign expenditures would be similar to persuasive campaign expenditures. Let NC be expenditures on negative campaigning:

∂ π_iL / ∂ NC_L > 0, ∂ π_iR / ∂ NC_L < 0 for all i

It can be argued that using negative advertising can both hurt and help a candidate’s campaign. Negative advertising can hurt a candidate’s reputation when the advertising is “uncivil” or “trait-based” but can also help a candidate win votes if the negative information in their advertisement is legitimate. Whether or not voters like negative advertising, it is very common and successful in many campaigns.