Is 47% the Tipping Point for Romney?

We are just a few weeks after a less than extraordinary Republican Convention missing the military but including a scene from "Old Man and the Chair" and a somewhat more energizing Democratic Convention showing why the Twenty-Second Amendment is the only thing that prevented Bill Clinton from a 3rd and perhaps 4th term. Most probably due to this difference in Convention outcomes (and probably unrelated to the release of the new iPhone 5, I think), President Obama now enjoys a roughly 5% gap in most popular opinion polls on the 2012 Presidential Election. Removing the undecideds for a moment (do they actually ever vote or do they just stay home on Election Day?), this would give us a roughly 53%-47% split in the popular vote should the election be held today.

That 47% number for Mitt Romney has unfortunately for him been echoed in what may well be the most damning words spoken by him yet. The webosphere is overwhelmed by articles analyzing Mitt Romney's claim that:

There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that's an entitlement. And the government should give it to them. And they will vote for this president no matter what…These are people who pay no income tax.

This video and several more sections of Romney's talk to rich donors earlier this year are now posted on the Mother Jones website:

There are many reviews of the numbers, but here is an article in the Daily Beast that points to a lot of the factual analyses: http://www.thedailybeast.com/articles/2012/09/18/who-are-the-47-percent-7-facts-about-the-americans-mitt-romney-attacked.html

The bottom line is that although Romney paints a picture of 47% of Americans not paying taxes, most of those still incur payroll taxes. Many of the 47% are elderly living only on Social Security, military or students not making very much from summer jobs, etc. Most of the rest earn under $20,000 per year.

Beyond all that, of the ten states with the highest percentage of people not paying income taxes, eight of them are traditional Red States and Florida has been a battleground state for many years.

This video has the potential to not only incite Democrats who as a whole are called out, but also many rank and file Republicans who through no fault of their own do not pay income taxes. It is difficult to imagine a speech ticking off such a broad spectrum of people in this country.

A gaff or a damning video by itself won't necessarily cause damage. In national elections, it often takes a few cracks in the same area before enough people notice and change their minds on a candidate. As was mentioned on electoral-vote.com:

"A report that Romney had an affair with a staffer would get zero attention because nobody would believe it was true."

However, the story about Mitt Romney being an uber-rich snob who likes to fire people and doesn't care about those who aren't rich had already received some traction adter many hits. To hear and watch him say a lot to reinforce that branding could have a lot of traction. With only seven weeks left in the election, not only could this create a wedge that is tough to overcome, but there is very little about Mitt Romney that helps him overcome a public opinion that he really doesn't understand or care about people who don't make a lot of money.

The numerical cry of this election had been 99% vs 1%, but the actual Tipping Point of this election may have actually been close to the midpoint - 47%.

Lehman Moment Turns Four

Four years ago today, on September 15, 2012, Lehman Brothers filed for Chapter 11 bankruptcy and failing to find a buyer, hurtled toward liquidation. On the same day, Merrill Lynch sold itself (and its bull logo and statues) to Bank of America.

Soooooooo, are we better off now than we were four years ago?

The answer will be different for individual people, but from a macroeconomic sense, the answer is an irrefutable "YES".

As an Economics and Math major, I had the unfortunate reality of understanding the financial precipice we stood on that day, the potential 'next shoes to drop' and the impending domino effect. For the first time in my adult life, I was scared. Not scary movie scared, seeing the apocalypse in front of your eyes scared. No matter what I and my family did, we would be the victims of whatever was about to happen. Not unlike citizens of post-war Germany who saw hyperinflation change prices dramatically overnight.

We should not underestimate the macroeconomic 'guesstimate' efforts that brought us back from the brink, have provided us with a 'new normal' stability, and the markets have responded with new highs.

Part of the credit should go to President George W. Bush, who against the stand of some from his party, chose to accept and implement the recommendation for the program known as TARP. This was instrumental in preventing our economy from looking like the last remnants of bathwater circling down the drain. Although TARP has had many detractors, realists know it was the unpleasant but necessary action that saved our economy. The fact that we have gotten a substantial portion of the money back due to the way it was structured will be appreciated more and more as years go by.

However, since the plug was put in the bottom of the bathtub, there have been two other major decisions and several smaller ones that have stopped the disaster from getting worse and begun to move us closer to our pre-recession existence.

The Auto bailout and the Stimulus have received a ton of bad press and frankly neither one is something to feel proud about. However, they were needed. No, there were essential in preventing extended 15% unemployment. The fall of GM and Chrysler would have resulted in the failure of many of their suppliers and other vendors. unemployment would have increased by several million. The Stimulus was watered-down and smaller that what was truly needed, but the right package would not have passed Congress. Tax refunds ('Making Work Pay' tax credit) felt good (or should have), but as most economists will tell you, don't have as large an impact as other measures. However, the 20+ consecutive months of job growth can be attributed at least in part (the percentage is debatable) to the Stimulus.

Are we where we need or want to be? No. Was this the perfect plan. Definitely not, but politics often prevent perfection. Is the US economy better post-Stimulus? Yes, and frankly anyone who would make a claim otherwise is unlikely to have gotten beyond Economics 101.

The events of 2008 sucked. Big time. The actions that were taken were painful. However, we are now able to calmly discuss the merits of these actions because we have substantial stability in our economy. There is no way to overstate how important that is and how close we came to not having it.

When you make your decision on who to vote for in the Presidential election this year, you really need to ask yourself the question - if we ever had to stare down into the economic abyss again, which candidate would we want to make the tough but long-term decisions, the ones that were unpopular in the short-term, but were necessary for the continued existence of the US economy?

I've got my choice made. Some times we focus on the small stuff or a single item rather than looking at the big picture. The roll of the President is to always look at the big picture regardless of what everyone else is looking at.

Does Walker Retention Portend Presidential Election Outcome in Wisconsin?

Although I don't like the way Walker handled it, as governor, he does have the right to find ways to balance the state budget. I have never been a big fan of recalls. Elections are where voters are supposed to make their choices and live with the consequences. Perhaps if voters realized they had to live with the outcome of an election, they might be more invested in making good choices and getting others to do the same.

Assuming that the outcome of this recall election with a low turnout foreshadows the outcome of the 2012 Presidential election outcome in Wisconsin is being overly simplistic. A better, but still not conclusive indicator would be the exit polling from the recall election which shows that the same voters who gave Walker a 53-46 win, also indicated a preference to re-elect President Obama by a margin of 51-44. This 7 point spread falls right in the middle of the most recent Wisconsin presidential polls which were conducted during the second half of May, 2012.

Again, since the portion of the Wisconsin electorate that participated in Tuesday's recall election may not reflect the same demographic sampling that will show up to vote in November, it is questionable whether there are any take-aways from Tuesday to predict the November election. However, that 14 point swing between the recall election outcome and exit poll preference for President when Walker and his supporters outspent Barrett $30M to $4M may indicate that the flood of money being spent against President Obama this election thanks to Citizen's United may not have very much impact.

Back to the Midwest

Ah, the Deep South creates primary problems for Mitt Romney and today (probably) the Midwest will make him look inevitable again.

last week's primaries in Alabama and Mississippi stalled for at least the moment, the claim that Newt Gingrich and/or Rick Santorum should drop out of the Republican primaries. Actually, with only second placings in both states, New Gingrich should have considered dropping out as he now has no reasonable path to the nomination. But that isn't why Newt is running and perhaps never has been. Newt said last week that he is in it for the duration, and I believe that no amount of third and fourth place finishes in the upcoming primaries will deter him from that manifest destiny.

However, for the benefit of the Romney camp, today is the Illinois primary with most polls showing Mitt to have a double digit lead over both Rick Santorum and Newt Gingrich, with a recent PPP poll showing Mitt beating the combination of their two vote shares.

Will this be the beginning of the end?

I think it will increase the talk about it, but I kind of doubt that either Rick Santorum or Newt Gingrich will decide to withdraw anytime soon. No folks, I think this game plays out for a while longer.

Gingrich is the Republican's Best Hope

OK, so now that I have your attention, what on earth do I mean. Certainly, you say to yourself, he can't mean that Newt Gingrich has the best chance of the 4 remaining Republican candidates to beat President Obama in the general election. With that assumption, you would be...correct.

As opposed to being the Republican's best general election candidate, Newt Gingrich is the Republican's best hope that Mitt Romney manages to hang on and win the nomination. If Gingrich were to drop out, there is a good chance that Rick Santorum would win enough of the remaining primaries to make it very difficult for Mitt Romney to collect enough delegates before the Republican Convention. A mano-a-mano competition (sorry Ron Paul), would not be an easy road for Mitt Romney, even with some upcoming winner take all primaries in large states with significant urban populations.

Instead, Newt Gingrich continues to split the conservative vote with Rick Santorum, allowing Mitt Romney to continue to win primaries while not attracting more than 40% of the votes. In all polls, Mitt Romney stands the best chance against President Obama in the November general election.

So in his own twisted, self-centered way, Newt Gingrich is once again doing everything he can to bring the Republican party back to national power. Today's primaries in Mississippi and Alabama may be a very close three way battle. If Mitt Romney were to win both, even by the smallest margins, it would probably indicate to all financial backers of Santorum and Gingrich, that the party is over. Without money, they would need to fold their campaigns very shortly. If Romney had to compete against only Santorum or Gingrich, he would lose in both states, and perhaps by double digits.

Also for your reading pleasure today, this poll from Public Policy Polling for the Republican primaries in Alabama and Mississippi. Skip down to questions 22 and 23 for both states and try not to let your jaw hit your desk. Not only is Barack Obama believed to be a Muslim by 3 to 4 times as many people who believe him to be his professed faith as a Christian, but in both states, at least 60% DO NOT believe in evolution. They were not asked if they believed in evolution as opposed to Creationism, just whether or not all of the science books they read and are being read by their children in school were accurate or fabrications. Evolution and the belief that God created humans are not mutually exclusive. In fact, of those who are members of the 12 largest religious denominations in the US, approximately 80% belong to churches who SUPPORT the concept of evolution. Perhaps this is unfairly targeting these two states as a poll referenced in the Wiki article linked above shows that nationwide there is a 30% difference in support for evolution between Democrats and Republicans. However, as a guy who grew up in the north and in the first grade of a Catholic elementary school was taught evolution and religious studies in the same day, this high percentage of scientific ignorance or intolerance is pretty stunning.

Will the Republican Tuesday remain "Super"?

Ever since states started to collaborate on holding their primaries on the same day to increase their power relative to the early states (Iowa, New Hampshire, etc.), the Republican nominee has been effectively determined upon the outcome of "Super Tuesday". Will the trend continue?

In 2008, with a relative split in the delegates won on Super Tuesday, it became readily apparent that Barack Obama and Hilary Clinton were going to be battling until the last primary vote was cast. A substantial split of the delegates among Republicans on Super Tuesday 2012 would probably do the same.

However, it appears that with his narrow Michigan win last week, Mitt Romney may have enough momentum to avoid losing too many states today. Notice, this isn't a ringing endorsement of the strength of his popularity among Republican voters. When you only win by a few percentage points in your home state to a candidate who's views are anything but mainstream and who is very underfunded, that isn't a clarion call to your inevitability. But, it might be enough for Mitt. The concept of Mitt Romney losing his birth state of Michigan was so prevalent that when he held on to win, Mitt Romney seemingly beat expectations. Similarly, if Mitt Romney wins the iconic battlefield of Ohio today, almost regardless of the results in other states, it will announce the likelihood of his nomination.

A win today in Ohio and an accumulation of delegates today in the high 100s out of the 400+ available will not so much make Mitt Romney seem like the victor as much as it will make everyone come to the conclusion that neither Rick Santorum, nor Newt Gingrich, nor Ron Paul have the ability to beat Mitt Romney. Kind of backing into the nomination.

If this was the Democratic Party, I would say that the race for the presidency 2012 is over. However, the Republican Party has an uncanny ability to hold their nose and emphatically support a candidate they do not like because they realize they hate him less than his opponent, President Barack Obama.

I believe Mitt Romney will win the most states and delegates today, but both Rick Santorum and Newt Gingrich will win one or more states and 10-20% of the available delegates today. Mitt Romney still will not be very far ahead of the delegate count. But it will be all but over as to who will be the Republican nominee, even if nobody drops out of the race. Once they get to winner-take-all primaries, coming in second place won't matter and Mitt will coast to the convention.

Will the Real Republican Nominee Please Stand Up?

Today we get the Michigan and Arizona primaries and this surprisingly cloudy Republican primary campaign might get clearer. Or not.

Most pundits had expected Mitt Romney to have broken away from the field at this point in the campaign season given his experience from the 2008 Presidential nomination race as well as his substantial advantages in money and organization over the other candidates. As most of you know, the 2012 campaign has been a series of "Who is the Not-the-Romney today?". The last man (or woman) standing in that situation comedy series is Rick Santorum. Former Pennsylvania Senator Rick Santorum, who lost his last campaign trying to hold his Senate seat by double digits, is somehow leading in most national polls. (BTW - Ron Paul, although durable and perhaps the only person other than the eventual nominee who will contest throughout the campaign season, will likely never wear the crown as Not-the-Romney of the day.)

However, despite leading in national polls, the Presidential nomination race is won state by state and perception by perception. Surprisingly, the actual delegate count rarely matters until there is only one candidate remaining. If Mitt Romney wins today in Michigan, which is his birth state, he will have at least stopped the talk of him not being the nominee until Super Tuesday on March 6th. However, if Rick Santorum manages to win Michigan, this will be a wide open race and may go all the way to the convention.

Interesting, the Republican nomination campaign hinges on the state that had its major industry bailed out by the Obama Administration. This bailout was and continues to be hammered by all remaining Republican candidates. Michigan is also a state where you can be registered in one party and vote in the other party's primary (although you are then recorded as having done so).

An interesting outcome and momentum shifter rests in the Great Lakes state today.

Jon Huntsman, We Hardly Knew You

Although he was perhaps the most qualified candidate in the field to do the job of President in the Twenty-teens, and perhaps most able to appeal to moderates, Jon Huntsman's campaign never got off the ground. His third place finish in moderate New Hampshire after putting most of his chips on that primary made it undeniably clear that it wasn't going to get any better.

In another time, with a different Republican electorate, Jon Huntsman may be the right candidate. But not today, not in 2012. It isn't clear what today's Republican electorate wants. There have been enough clear messages that they don't want Mitt Romney, although that is who they are about to nominate, having not found the stomach to vote for anyone else.

Jon Huntsman seems to be a good guy, a smart guy, a guy with substantial international affairs experience, in particular with China, the single most important expanding economic power in the world. However, Jon still hasn't figured out how to master the TV/Internet sound bite, and that might doom his ability to ever ascend to the Presidency.

However, I put him on the short list for a cabinet position if Mitt Romney wins. That might actually be a more important position that would be a better use of his abilities and experience. How does Secretary of State Huntsman sound?

When the Expected Occurs and Surprises Everyone

Mitt Romney won the Iowa Caucuses by 8 votes, well kind of. One week later, he won a decisive double-digit victory in his 'practically home state' of New Hampshire. He thus became the first Republican non-incumbent to win both of these first two votes.

While Romney winning Iowa would have been considered a surprise a month ago, he had led all polls recently and having a narrow at best win over streaking Rick Santorum hardly seems like a defining moment. How different would the outcome have been considered if a doze votes went to Santorum and Romeny finished second? After a win in Iowa, Romney's margin of victory in New Hampshire was on the low side of expectations.

So, despite these less than overwhelming performances, Mitt Romney now appears to be a South Carolina win away from being ushered in as the Republican candidate to face President Obama in November's Presidential election. If recent polls showing Romney leading by a comfortable margin are even close to correct, that is pretty much what will happen. Even though Ron Paul will probably stay in the race and despite Newt Gingrich wanting to give Mitt Romney a payback for the negative ads in Iowa, this campaign is very close to being over.

Whereas the 2008 Democratic Campaign went pretty much to the end, the 2012 Republican Primary season may not be in doubt come Groundhog's Day. If that occurs, we will review the implications of a quick decision on a nominee and how it will impact the Fall campaign.

He Who is Last Shall Be First, Almost

The long-awaited and long-written-about Iowa Caucuses are over and they produced the closest and perhaps most confusing result in their history. After all the votes were counted once, Mitt Romney edged out Rick Santorum by just 8 votes. There are no recounts in the Iowa Caucues because, well, precision isn't really that important. The Iowa Caucuses votes are only the start to a multi-tiered process that determines the delegates to the Republican National Convention. Even then, they are allowed to vote for whomever they chose.

But a win is a win and for the longest time during the campaign, it didn't seem like there was any way that Mitt Romney would be the top vote-getter in Iowa. From Palin to Trump to Bachmann to Perry to Cain to Gingrich to Paul, there has always been someone else who it appeared would be the winner of Iowa. So winning the Iowa Caucuses, going 'home' to New Hampshire where Romney has a big lead in polls and having by far the largest success in fund-raising would normally be the ingredients to an early decision in a primary campaign.

Not so fast. Those 8 votes were an important divider between first and second, but perception is everything. Coming in second after spending most of the pre-caucus time battling Stan Hunstman for last place among those being allowed into the debates, was none other than former Pennsylvania Senator, Rick Santorum. How on earth did that happen? I mean, as late as mid-December, you could have gotten tremendous odds predicting that Santorum would finish in the top 2 in Iowa. This is the same Rick Santorum who lost his Senate seat in 2006 to Bob Casey, Jr. by 18%, the largest loss for a standing US Senator in history. What change in gravitational forces and metaphysical dynamics commenced over the holidays that made Rick Santorum the hottest candidate on the Republican campaign trail?

As the biblical reference in the title, "he who is last shall be first". Each of the other Republican candidates or almost-candidates mentioned above who were leading in Iowa polls at some point did get to spend some time in the middle of the circular firing squad of Republican candidates and have all of their statements and former misdeeds given substantial media time and space. Many candidates have looked good on the surface, but once the hood was raised and tires kicked...well, not so much.

However, as almost every other candidate (save Jon Huntsman) got their turn at the top of the heap only to fall down and break their chance at winning the crown, there were very few Not-the-Romneys remaining. Newt Gingrich was the last candidate to have a meteoric ascension to the top of the Iowa poll. After a few weeks in that position as people had more of a chance to hear Newt speak outside of debates, the entire state of Iowa proclaimed, "Oh, THAT Newt Gingrich!" and his ratings tumbled.

The loyal Not-the-Romney supporters looked into the bullpen of relief candidates, looked sensible, intelligent, experienced Jon Huntsman in the eye, looked away and said, "Rick Santorum, you are our man!". But with the shortness of time and impending holidays, the other candidates and the media didn't have much opportunity to let potential voters know why Santorum belonged with the other former Not-the-Romneys. So in this case, being the last Republican candidate before Iowa to win the favor of the more conservative Republican voters was a winning (or almost winning) strategy.

What happens from here? Well, that is one reason why political campaigns are fun, at least from the outside. Nobody knows for certain what will happen. It is most likely that Mitt Romney will win big in New Hampshire next Tuesday, Jan 10th. However, it will be more interesting to see how large the gap will be, who will be second, and if Santorum isn't second, how far down he finishes. Campaigning is still a money and organization game. Romney has both, Paul has both, Perry has money. Rick Santorum is going to have to get a lot of money and organization in South Carolina and Florida in a hurry if his Iowa showing is to become more than a political footnote.

Is This Heaven? No, It's Iowa

January 3rd, note even long enough into the new year that you remember not to write 2011 for the date. But today, we officially begin counting votes that kind of count toward determining the Republican nominee for President in 2012.

Everything up to this point has been noise and there has been a lot of it. The jostling back and forth in the polls has seemed a lot like a horse race and the folks at Slate have helped us visualize the lead-up to the Iowa Caucuses:

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But the entire race until this point is essentially meaningless. Today, at various places around Iowa, people will stand up and talk about the candidate they support and then folks will go to vote. Unlike the Democratic caucuses in Iowa, there are not several rounds of voting with candidates receiving less than a threshold of votes being removed and their supporters being coaxed by others to join their group. However, candidates who spent a lot of time in the state and have a good ground game (Santorum and Paul), may wind up with a higher percentage of total votes as their supporters stand up and speak on their behalf.

The actual results today don't even necessarily wind up determining the distribution of Iowa's delegates at the Republican National Convention. As Electoral-Vote.com clarifies:

"Note that this is only a preference for delegates to the 99 county conventions in March. The people who go there elect the delegates to the congressional-district conventions and so on up the tree to the RNC. These people can change their mind as time goes on. In 2008, for example, John McCain came in fourth in the first round but ended up getting all the delegates to the RNC in the end."

So, why do we care what folks in Iowa do today? Good question. But the answer is that for better or worse, this is the first truly defining moment in the 2012 Republican Presidential Primary race. Financial supporters and local organizers are the life-blood of a campaign. Until now, every candidate has a chance to be the nominee. After the reality of today, for some, not so much. Michele Bachmann's campaign is on life-support and as a native Iowan who won the earlier Iowa Straw Poll, a 4th or lower finish today is probably the punctuation mark at the end of her campaign. Rick Santorum is also very light on money and support, but at least in recent polls, he has been the anti-Romney flavor of the month and a strong showing today could give him the influx of dollars that can keep him going at least through the South Carolina primary on January 21st. Stan Hunstman and Rick Perry are unlikely to place near the top in Iowa, but they both have a good amount of cash for the moment and will stay in for a while. Hunstman is counting on a good showing next Tuesday on January 10th in New Hampshire and will decide whether or not to continue at that time.

Mitt Romney and Ron Paul are likely to be among the top 3 in today's Iowa Caucus and despite occasional media comments to the contrary, are likely to continue even if they had a bad showing. However, a win would be very big for either candidate, regardless of how small the margin.

That leaves us with Newt Gingrich. Newt, Newt, Newt. I could write an entire year of blog posts recalling the path that took Newt Gingrich to arrive at this point in his political career, but that would be a waste of electrons. Newt could eek out a top 3 finish in Iowa, but its not clear that even that would do much to fortify his coffers. Only a few weeks ago, Gingrich soared in polls both in Iowa and nationally and led Mitt Romney by double-digits. Newt's fast rise and flame-out will make the others (Trump, Bachmann, Perry, Cain) seem prolonged by comparison.

So we'll see what the citizens of Iowa communicate to the rest of the country and we'll report back on it during the week.

In case you were wondering, the title of today's post comes from "Field of Dreams".