Yes -- in all probability. But, that doesn't mean that the events of the past 24 hours haven't been orchestrated in some respect. Let me explain how I see this.
Here's what we know about the financial situation of the Clinton campaign. We know that, as of the 1st of the year, the Clinton campaign had $18.6 million cash on hand for the primary election cycle, according to the New York Times. We know that they raised $13.5 million in January. So, that's a total of $18.6 million + $13.5 million, or $32.1 million, that they had available to spend by January 31, not counting Hillary's own $5 million contribution.
Could their campaign possibly have spent $32.1 million in the month of January? It's entirely possible and in fact somewhat probable that they spent something approaching this figure.
The Clinton campaign spent an average of $6.7 million per month in 2007. This is what I'll call their "Baseline Burn Rate" and includes -- the basics, like rudimentary travel and staffing expenses. Basically, that's what it takes to keep the campaign's core operations running. But it doesn't include things like advertising, of which there was relatively little until 2008 rolled around.
Ben Smith reports that the Clinton campaign spent $12 million on television advertising alone through February 3. Add that to the $6.7 million baseline rate, and you're already approaching a $20 million spend for the month. And, there are many other sorts of expenses that tend to accelerate as the primary season heats up. You're paying more staff. You have more offices open. You're running ads not just on television -- but also on radio and through the mail, internet, and other media. You're traveling more, and taking longer flights. So, the Clinton campaign could very easily be spending $30 million a month -- general election campaigns spend this much and a little more once the action really heats up.
Let's take a look at a few specifics. The numbers that follow are obviously just a supposition -- but one that should give you some reasonable example of the importance of fundraising power in a drawn-out primary cycle. We'll also look at the finances of the Obama campaign, which started out with somewhat less in the bank ($13.5 million as of January 1) and is probably spending at a somewhat faster rate -- but is also receiving donations at a considerably faster rate.
As I said, these are just guesses at what the math looks like. I'm assuming that the Clinton campaign will raise about $20 million in February -- a big uptick from their January numbers. I'm including Hillary's $5 million contribution. And I'm guesstimating that they'll spend about $30 million in January and February -- likely the two most expensive months of the campaign -- or about 4.5x their baseline burn rate.
As you can see, it's not that difficult for the campaign to be running out of money. In fact, it's quite plausible that they'd run out of money as of the end of February -- or have to cut expenses that they wouldn't like to cut -- even with an excellent fundraising month.
After February, the spending will probably decelerate some -- but maybe not a whole heck of a lot. Ohio, Texas, and Pennsylvania all have multiple, premium media markets that are scalar multiples more expensive than anything in New Hampshire or Iowa. There are a couple other contests that might also require some spending -- North Carolina and Indiana in early May have a pretty large package of delegates, for instance. And if the DNC winds up scheduling caucuses in Michigan and Florida at some point in late March -- those are two more big, expensive states, and caucuses are resource-intensive. Also, while expenditures may tail off some, so too will contributions, as donors become fatigued and as the Clinton campaign runs up against the $2,300 wall.
So I'd conclude that the Clinton campaign's financial difficulties are probably real. It's not so much that they didn't anticipate having to compete after February 5th -- but that they didn't anticipate having to compete after February 5th against an opponent who was raising money much faster than they were. There are probably some diminishing returns in your return on investment as you spend more and more money -- so this is not entirely a zero-sum game -- but when you consider the prospect of trying to build an Iowa-type operation in three states as large as Ohio, Texas and Pennsylvania, you can imagine running through money pretty quickly.
In fact, there were already plenty of signs that the Clinton campaign was falling behind in the financial race, even before yesterday's disclosure. The production budget on their ads has been lacking. The Clinton campaign trailed 21-0 in field offices in the post-February 5 states by my last count. Hillary had begun to fly on her press plane (something she should probably have been doing all along; there are better ways to spend money than to charter two separate planes everywhere you travel, not to mention the reduced carbon footprint).
As for the Obama campaign, I have them spending at a somewhat faster rate -- but still remaining in the black through the end of April, assuming that his supporters continue to be reasonably generous. Even a 50% advantage in ongoing fundraising is fairly powerful at this stage, and a 250% advantage, as Obama had in January, could potentially be decisive.
At the same time, I think the Clinton campaign knew exactly what it was doing in disclosing Hillary's $5 million loan. Consider that these leaks have come through some relatively Hillary-friendly sources, like Mark Halperin and the New York Times.
The theory is basically this: people were going to find out about these financial issues sooner or later. Some disgruntled staffer who isn't getting paid anything leaks to the press, or someone leaves a Powerpoint sitting around -- then you have a real problem. And eventually, you have FEC filings to worry about.
By clearing the air now, the Clinton campaign preempts these scenarios, while also perhaps giving her donors a little extra incentive to chip in. I wouldn't call it a brilliant strategy. But it's certainly not some kind of elaborate ruse. In all likelihood, it's just the best way to handle a bad situation. If, for example, Hillary does not meet expectations in the Beltway Primaries, and this news had come out against their volition then, the "sky is falling" narrative might have been difficult to overcome.
At the same time, it does seem like the law of unintended consequences has come into play here. For one thing, Hillary might not have recognized the extent to which this disclosure would have motivated Obama supporters to contribute. And for another thing, they might not have anticipated the extent to which this would bleed into the Super Tuesday narrative. When news of Hillary's loan came out, the media suddenly became much more willing to recognize that Obama won more states, that he was ahead in the pledged delegate count; this is how campaign narratives go -- one aspect of the campaign tends to bleed into the coverage of another.
Anyway ... none of that really matters unless Obama's donors are able to maintain their enthusiasm. I'm going to do my best to contribute to this law of unintended consequences by chipping in another $20.08 to the Obama campaign.