Study: Caucuses Responsible for 40% of Iowa’s Economy

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Good citizens, good business

Without its first-in-the nation caucuses every four years to kick start the presidential nomination process in the United States, Iowa would be about 40 percent poorer and would rely principally on federal transfer grants to sustain its agriculture-based economy, a report by the American Association of State Budget Officers (AASBO) finds.

“The Iowa caucuses get a lot of attention for the disproportionate role they play in our national presidential election process, but what people don’t realize is that the caucuses play a disproportionate role in the state’s budget health,” says James Stewart, director of audits at AASBO.

wiki/File:Cover_of_Farm_Girl_by_William_Brown_Meloney_-_Illustration_by_Julian_Paul_-_Pyramid_Books_1951.jpg wiki/Category:National_cash_registers#/media/File:Openluchtmuseum_Ellert_en_Bammert_te_Schoonoord_-_national_cash_register.jpg wiki/Caucus#/media/File:2008_Wash_State_Democratic_Caucus_15.jpg The report, titled “Iowa Needs Its Caucuses More Than the Presidential Process Does,” says the caucuses generate $50 billion in economic activity in the state every four years, or about 40 percent of the state’s roughly $120 billion in total annual economic output.

The state’s heavy reliance on the caucuses, which draws billions of dollars in spending on state and local TV, radio, and newspaper ads, polling, canvassing, and campaign events, has given the state an economic lifeline that has helped it mask its systemic economic problems.

“People think of Iowa as part of the breadbasket of America, but really its the basket case of America, because you can’t compete in the global economy today producing the raw ingredients for breakfast cereal, you know?” says Malcolm Beyer, an analyst with Lehman Bros., whose reports go into determining state bond ratings. “It’s time to move on from rusty tractors and straw bales and get into the modern economy, which is about technology and communications. How much breakfast cereal can people eat?”

Peter Barnard, a lobbyist for the National Governors Association, says the state can’t rely on the economic gravy train of the caucuses forever. “Other states want to have a shot at influencing the presidential race the way Iowa has for so long,” he says. “It’s not fair. But Iowa spends a lot of money lobbying in Washington to keep its caucuses first in the nation, because it knows how much it stands to lose economically if another state jumps ahead of it.”

It’s not just ad spending that’s so critical, says Lester Timms, Iowa’s chief budget officer. “Whenever a campaign hosts a barbecue, for example, you have the cost of food, renting the space, maybe paying for a band, all the promotions that go into it, transportation, AV equipment, etc., etc.,” he says. “It’s big business, especially when you have so many candidates running for president. If you have 12 candidates, and they each host 12 events in the state in a year, that’s a lot of spending to win votes.”

Iowa Gov. Terry Branstad says economics has nothing to do with the state’s reluctance to let any other state go before it. “Whatever economic gain the state gets is immaterial,” he says. “Iowans are serious, careful voters who listen to what the candidates say and they provide an indispensable winnowing effect in the race. I can’t think of any other state whose citizens would approach their responsibility as citizens more seriously.”

That might be so, critics say, but the state has not been a good predictor of which candidate goes on to win their party’s nomination, especially on the Republican side. In 2012, the winner was former Pennsylvania Sen. Rick Santorum, and in 2008 it was former Arkansas Gov. Mike Huckabee.

One Republican political consultant, who spoke on the condition of anonymity, says Iowans are not at all representative of Americans at large because of their conservatism, and really have no business playing such an outsized role in the nominating process. But the state spends millions every year to prevent other states from diminishing its role. “Its the state’s dirty little secret,” this consultant says. “It needs the billions the campaigns generate and it will stop at nothing to ensure the gravy train keeps running through its wheat fields every four years. Our hope is this report will make people see what the state’s real agenda is, because it ain’t about vetting candidates.”

This is a work of satire. It is fictional news article not meant to be taken seriously. Photos (some modified): cv, stdy (Creative Commons and public domain). Not necessarily an endorsed use of images.

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