Friday, March 30, 2007

Funded by Pareto's Principle

The Pareto principle (also known as the 80-20 rule, the law of the vital few and the principle of factor sparsity) states that, for many phenomena, 80% of the consequences stem from 20% of the causes.

An article I read a few weeks back, just before Ron Paul announced his bid for the presidency, said that if Ron Paul was to compete monetarily against the likes of Hillary, Barack, McCain and Giuliani, he would have to raise about $50 million. In other articles, $20 million would make other people take notice. Implied is that Ron Paul does not have the clout to compete, let alone make other people take notice.

As the grassroots movement continues to swell, Ron Paul no longer needs $20 million to make other people notice him. Already, he has been interviewed on CNN and Fox, the latter being prompted by hundreds of emails. An even greater step of notoriety will be his appearance tonight on Bill Maher's HBO show, Real Time with Bill Maher. Being so vastly different from the Republican clones, I wouldn't be all too surprised if Maher and his liberal following find favor with Constitutionalist Ron Paul. That would certainly raise the eyebrows of many. And let's not forget Nancy Reagan's personal invitation to Ron Paul to a presidential debate at the Ronald Reagan Library on May 3rd. Talk about being put out on the spotlight!

But would it be enough? Would there be enough people to help Ron Paul monetarily compete with the rest? Let's hypothesize for a moment.

When Ron Paul ran for president under the banner of the Libertarian Party in 1988, he received about 400,000 votes. Using Pareto's Principle, let's say 20% of the voters funded his campaign. That's 80,000 people. Let's say 20% of those were generous and, on the average, funded $100. 16,000 people X $100 = $1.16 million.

But let's break this down further. Twenty percent of 16,000 is 3,200. These would be people who were quite generous and, on the average, gave about $1000. 3,200 people X $1000 = $3.2 million. 16,000 - 3,200 = 12,800 of those who gave $100. 12,800 X $100 = $1.28 million.

Going back to the 80,000 who actually gave funds. 80,000 - 16,000 = 64,000 of those who gave, let's say, on average, $10 to the campaign. 64,000 X $10 = $640,000.

Let's tally it up. $3.2 million + $1.28 million + $640,000 = $5.12 million dollars. Ron Paul certainly falls short of the $50 million to "compete", but there is a law that can and will tip the balance in his favor: Murphy's Law.

In the current state of our government, it would seem Murphy's Law is the rule of law: Iraq, the economy, government encroachment of our liberties. Murphy's Law makes the powers-that-be all that more incompetent, and that is an incredible advantage that Ron Paul has. He is not perfect, and certainly no one is, but he far outshines all others like a freshly minted gold coin.

It will be this stark political contrast that Ron Paul offers that will negate Pareto's Principle. His political career and voting record will back his integrity. People are tired of the same old rhetoric from career politicians who promise gold and deliver mud. In their zeal to see a change in the government, I wouldn't be surprised to see more than 50% of them help fund his campaign. In their revolt of the Establishment, they'll give generously before it loses too much value to be worth the paper it is written on.

And as Ron Paul gains more exposure through his grassroots movement, the mainstream media will continue to buckle and will have to give him more news coverage. It's already started and it will continue on. I wouldn't be surprised if Ron Paul becomes "viral" on the internet. He had 400,000 people vote for him in 1988, but this time around, I think he'll be getting millions.

So what do I think this will look like monetarily? Just through the grassroots movement alone and without campaigning hard, he's already raised $500,000. That's 1 percent of the $50 million, and that's not even trying. And considering Ross Perot received 19 million of the popular vote, Ron Paul could easily get a quarter of that. So to calculate:

5 million x 20% = 1 million
1 million x 20% = 200,000
200,000 x 20% = 40,000

40,000 x $1000 = $40 million
160,000 x $100 = $11.6 million
800,000 x $10 = $8 million

Grand total = $59.6 million

And that, my friends, is a very conservative number.

4 comments:

Eric Dondero said...

You can't win or even make a significant impact, without a grass roots campaign, as well. All reports are that Ron Paul's organizational effort on the ground has been an utter dissaster. Committed activists who were wildly enthusiastic about his effort 3 months ago are fleeing, cause of lack of communication, lack of campaign management, and general disorganization.

I'd also note, that records indicate to date, RP has raised about $500,000.

Compared to Giuliani, McCain, and Romney all hovering around $30 million.

And one could surmise that RP has reached about his maximum level of financial support. I know his donors well. They're good for $2,000 each, but once that level has been reached, as I suspect it has for many of them, they can't contribute any more.

Topping all of this is the question of Ron Paul's health. He's 72, and like McCain, he looks his age.

I don't think TV appearances help his cause. In fact, he comes across looking a bit like a crank. Even worse, he has a crackly whinny voice at times. And that is certainly not helpful to our libertarian efforts.

Libertarians are moving to Giuliani. He's got a good image, and money in the bank. True, he's not as strident a libertarian, but he's an electable libertarian.

Eric Dondero, CEO
MainstreamLibertarian.com

Host, Blog Talk Radio's
"Libertarian Politics Live"

Soli Deo Gloria said...

Hi Eric,

You're shooting the horse before it is even headed out the gate. Just because there were problems in the beginning does not mean that this will always be the case. Your argument is non-sequiter.

Plus the fact you make the mistake of imposing an issue from 3 months ago upon the last 3 weeks since he announced his bid for the presidency. Still, even if it is still the case today, it does not necessarily follow that it will always be like this. Then again, it is difficult to centralize an effort in grassroots because it is inherently. Does that make grassroots ineffective? We'll just have to wait and see.

As for funds, I'm not arguing that he already now has the millions he needs to compete, but your argument that to date, RP has raised about $500,000 and that he has reached about his maximum level of financial support is poor. For whatever reason, you dismiss the contributions of those in the grassroots and only wish to peg Ron Paul's funds at $500k. You may claim "know his donors" well, but there are more outside of your circle of knowledge who also donate. And since the door isn't closed for more people to donate, you cannot discount the possibility of more funds coming in. My post is based on that possibility.

As for age, Reagan was a couple of weeks shy of 70 when he took office. Age is not as big of a factor as you seem to make it. People can and do make choices not based on factors such as age.

Finally, as for his TV appearances, you certainly are entitled to your subjective opinion, and certainly everyone will have theirs about any of the candidates. If he seems to come off as a crank, then I'm sure there are plenty of people who would relate to him. There are plenty of people out there who certainly are cranky about our political system and would want someone to shake up the Establishment. I certainly am one of them. *crank* :-)

I understand from your profile on your blog that you have worked with Ron Paul on several occassions, so you certainly have the advantage of being more in-tuned with the political backside. I won't discount your experience, but your arguments are specious and it is far too early to discount the efforts of the grassroots. At this point, it is much like watching grass grow, but it does grow.

Thanks for your time!

Victor

Soli Deo Gloria said...

Woops, this should read:

"Then again, it is difficult to centralize an effort in grassroots because it is inherently decentralized.

ehud would said...

Giuliani a Libertarian? Gimme a break-- the guy wants the second ammendment repealed! Sounds more like a Commie.