Experts: Large caucus field won’t boost Iowa economy

DES MOINES - The first-in-the-nation caucuses boost Iowa's visibility but not its bottom line, say an expert on Iowa economics and business leaders from across the state.

Those insiders don't expect that to change this caucus season despite the large field of presidential candidates who have been unrelenting in their visits to the state.

As the state the kicks off the presidential selection process every four years, Iowa draws plenty of attention in the months that lead up to the caucuses. Candidates visit to woo voters. Campaigns set up temporary offices here. National media members pour into the state to cover the candidates, as do people from other states who would not otherwise get an opportunity to see a future president up close and personal.

And yet, for all that, the economic impact of the Iowa caucuses is negligible, many experts say.

David Swenson, an economist and professor at Iowa State University, published a study that concluded the 2008 caucuses added roughly $11 million and 230 jobs to the Iowa economy at a time when the state's gross domestic product was $130 billion.

In other words, the economic impact of the 2008 caucuses was less than 1/100th of 1 percent of Iowa's GDP.

'Just a one-day swing in the corn prices just blows this thing out of the water,” Swenson said.

The 2008 caucuses were the last time there was no incumbent in the White House, as is the case for the 2016 cycle.

Regional business leaders mostly agree on the minimal economic benefits of the caucuses.

While it may seem that all that campaign activity would be beneficial to hotels, restaurants and venues, the caucuses simply don't move the economic needle, experts say.

Joe Taylor, president and CEO of the Quad-Cities Convention and Visitors Bureau, said he thinks there is an 'economic return” to the caucuses, but quantifying the impact is challenging.

Chris McGowan, president of the Siouxland Chamber of Commerce, said businesses benefit from the caucuses, but not significantly.

'I don't know that we could point to a historic trend that said hotels and restaurants are significant beneficiaries of caucus activity,” McGowan said. 'Are they beneficiaries? Yes. Are they significant beneficiaries? I think that would be a stretch.”

That is not expected to change this year, even with a field that topped out at 22 major candidates. That number largely is driven by the 17 Republicans who opted to run for president, easily topping the previous high of 12 established in 2012.

Taylor said he thinks the Quad-Cities are seeing roughly two or three candidates per month, but he thinks that pace will quicken as the caucuses draw near.

McGowan said the campaign traffic in Siouxland is noticeably busier than previous caucus seasons.

But more candidates does not mean more money for Iowa, most experts agreed.

'On a real spending basis, I really wouldn't expect that much bigger of an effect showing up,” Swenson said, noting that although there are more candidates in the race, some are not yet spending much money and some are not frequenting Iowa.

Taylor said he thinks this year could be more economically fruitful if most of the candidates remain in the race until the Feb. 1 caucuses.

'I think it will be more interesting if the field remains intact. If there's still 15 or 16 (candidates) going into December and January, that will be very interesting,” Taylor said. 'If the field has been cut to seven or eight, now you're starting the winnowing process.

'The more candidates that stay in (the race), the longer they stay in, the more exciting that will be and the more economic impact we will see.”

The Greater Des Moines Convention and Visitors Bureau gave a more optimistic view of the caucuses' impact in 2008, reporting $25 million in caucus-related economic activity in the capital city's metro area.

One certain beneficiary of the caucuses - and elections in general - is media advertising.

Steve Lake, national sales manager for KCRG-TV in Cedar Rapids, said based on an early estimation, the station is cautiously optimistic it will receive more than $4 million in advertising during the 2016 caucus season, a 20 percent to 25 percent increase over the 2008 caucuses.

Lake said the station already has aired or billed $3.4 million in campaign advertising, matching its 2008 total.

But media advertising does not improve the state's economic standing, Swenson said. Political advertisements are planned portions of media budgets; it does not result in additional hiring, Swenson said.

'It's just no big deal until the end, and then at the end, it's all in a 15-day period,” Swenson said. 'All the cars get rented, all the hotels get blocked, all the audio/visual specialists in the state get put on standby. And then that's it, and it's gone.”