The New Political Economy

No, there is no new "political economy" in the academic sense, although I'd love to see/create one. Instead what we are looking at a potentially new economy of US elections.

Howard Dean of course laid the ground work, using blogs and email to forge a low threshold fundraising network that has made him the best funded candidate in this race, on the Democratic side of the game. But he may well have also laid the ground work of his own demise. He has a bigger bank to play with then his competitors no doubt, but they have the momentum. And unlike elections path, there is now a working model for turning momentum into donations quickly. And it looks exactly like Howard Dean's online fundraising model.

Both John Kerry and John Edwards have raised over $700,000 each online since Iowa's caucuses on Monday and that might be exactly the funds they need to keep in the game. The annuls of American presidential elections are filled with candidates that get hot for a state or two then die due to lack of funds in the next states. John McCain being the most recent examples.

But if a hot candidate can now turn a strong showing into a million dollars a week in new funds, momentum suddenly means real dollars. And in a tight campaign that might make all the difference.