A few weeks ago, George Mitchell, the Democratic former senator and US former envoy to the Middle East, had an intriguing geopolitical chat with senior European business leaders.
But what really caused a frisson among his audience was the topic of the 2012 election: over the lunch, organised by Pi Capital, the senator admitted he was braced for an estimated $500 million worth of negative advertising in the closing weeks of the US election.
"Five hundred million – half a billion dollars?” muttered one of London’s most senior business leaders, shaking his head in disbelief. "That’s shocking!”
It is a sentiment many non-Americans might echo, not to mention some Americans too. As voters go to the polls, the outcome of the election is still uncertain. But the one thing that is crystal clear, against the backdrop of a desperately close result, is that Tuesday’s vote will be the most expensive election in American history; indeed, it is the most costly vote, in absolute terms, ever seen anywhere in the world.
According to the Center for Responsive Politics, for example, about $2.5 billion has been spent in recent months on campaigns for the presidential election. However, when the congressional battles are included, the tally rises to almost $6 billion. That is double the amount spent in 2000, and 7 per cent up from 2008.
It is also starkly higher than other western nations. Last year, for example, Canada held a general election, and the bill was a "mere” C$291 million, or C$8 a head. And when the UK held its general election in 2010, this was estimated to cost some £49m, or a mere 50 pence a head. The US election, however, equates to about $18 a head, for every man, woman and (non-voting) child.
So is this $6 billion price tag justified? Some Americans would argue so. After all, the issues at stake in Tuesday’s vote are vitally important, given the state of the economy. Moreover, America is a country which prides itself on being a beacon of free speech, political debate and voter engagement and outreach.
Republican candidate Mitt Romney takes on President Barack Obama in the race for the White House
And if you compare that $6 billion bill against some of the other things that Americans are currently spend their cash on, the election outlay starts to look a bit less extraordinary. This year, for example, American households will spend a projected $7 billion on potato chips, and last month alone they splashed out about $8 billion on Halloween festivities. Meanwhile, the US government has recently been spending just over $6 billion each month on its operations in Afghanistan; and during the height of the financial crisis, the US Treasury provided a $6 billion loan to just one company, namely GMAC, the car finance group.
Nevertheless, what really provokes unease among many American voters – and shock among non-Americans – is not so much the absolute $6 billion price tag but how the money is being raised and spent. Until recently, it was relatively easy for groups such as the Center for Responsive Politics to track election cash flows, since American laws mandated high levels of disclosure.
Who are the biggest donors to super-Pacs, the organisations that can buy advertising for candidates?
But a Supreme Court ruling in early 2010 permitted the creation of "super-Pacs”, which can raise and spend money with far less transparency. At least $750 million of funds is thought to have flowed through these groups in recent months (although nobody is entirely sure.) It appears that those shadowy funds have been funnelled into closely fought races in places such as Ohio and contributed a dramatic increase in the volume of negative, targeted advertising.
Surveys suggest that many voters hate this: About 80 per cent of Americans tell voters that they disapprove of the 2010 campaign finance ruling and almost as many say they hate negative advertisements too. And what is adding to the unease is that this rise in super-Pac spending is occurring amid growing income inequality too; rightly or wrongly, this has created the popular impression that the infamous "one per cent” of ultra wealthy Americans are buying political influence to a growing degree.
But do not bet on seeing change soon. After all, a nation which is as deeply – and evenly – divided as America is also a place where both Democrats and Republicans have every incentive to keep engaging in a campaign arms race. Whatever happens on Tuesday, in other words, the one thing that can be predicted with ease is that when America goes to vote in 2016, the next price tag could be bigger still.
Copyright The Financial Times Limited 2012.