Obama Extends His Lead, Gingrich to Formally Drop Out, On Behalf of the 1%

Obama Extends His Lead
In my poll tracking, we have 4 new national polls and 5 state level polls this week and they show a distinct trend in the second week of the general election campaign - the Obama campaign is gaining steam.  Now, let's not overstate this case - this is week 2 of what will be a 29 week campaign, so we are sure to see lots of ups and downs.

But in the scheme of a week that saw disappointing economic growth (2.2% GDP growth in Q1 versus an expectation of 2.5% growth), disappointing unemployment claims (388,000 new claims versus an expectation of 365,000) and no real positive news for the President, his gaining ground against Romney is certainly a good thing.

Here are our latest changes:
National Poll Average of Averages: Obama +2.9% (up 2.0% from last week)
State Changes:

Louisiana - moves from Safe Romney to Strong Romney
West Virginia - moves from Safe Romney to Strong Romney
South Carolina - moves from Strong Romney to Likely Romney
South Dakota - moves from Strong Romney to Likely Romney
Arizona - moves from Strong Romney to Likely Romney

Florida - flips from Lean Romney to Lean Obama

Michigan - moves from Likely Obama to Strong Obama
Wisconsin - moves from Likely Obama to Strong Obama
Rhode Island - moves from Strong Obama to Safe Obama
Delaware - moves from Strong Obama to Safe Obama
Maryland - moves from Strong Obama to Safe Obama

Electoral Count: Obama 331, Romney 207 (Obama +28 versus last week)

 

Gingrich to (Finally) Drop Out

Newt Gingrich is set to formally drop out of the Presidential race this Tuesday, leaving Mitt Romney and Ron Paul as the only official candidate for the Republican nomination.  Gingrich's status as a serious candidate for the Republican nomination has been gone for quite some time now.  Since winning an upset victory in South Carolina, his only victory was in his home state of Georgia and Gingrich came in third in states like Mississippi, where a serious GOP Southern candidate should win.

We've all sort of moved on to the general election, so Gingrich's departure will be to very little fanfare.

In the most technical sense, Romney is still yet to clinch the nomination.  My current delegate count puts his total at 865 delegates out of 1,144 needed to clinch the nomination.  But with only Ron Paul to deal with, Romney should make short work of gaining the remaining 279 he needs.  132 delegates are allocated in the three races on May 8th, 63 on May 15th, 81 on May 22nd, 155 in the Texas Primary on May 29th, 299 on June 5th and 40 in the closing Utah primary on June 26th.

Assuming Romney gets at least 65% of the delegates from here on, he should clinch by May 29th.

 Game on to the general.

In Defense of the 1%

I am not a member of the 1%, as defined by the (now dwindling) Occupy Wall Street protesters.  I have been successful enough in life that my household income is in the top 5% of all households, but not in the top 1%.  I hope to join the 1% as soon as possible, however.

The 1% have been much maligned by the left as of late.  They profit at the expense of the working class.  They don't pay their fair share of taxes.  They looted our economy and gave themselves golden parachutes.

There are certainly members of the 1% for whom there can be no defense.  Bernie Madoff is a criminal.  The actions of the leaders of financial institutions to take massive risks on high-risk loans that ultimately led both to the housing bubble and the financial collapse are incompetent and best and criminal at worst.  Hedge fund managers being taxed at a lower rate than working Americans is inexplicably bad policy.

But there are plenty of things that the 99% does that are as bad or worse.  Medicaid fraud is rampant.  So is Social Security Disability fraud.  There are scores of people taking public handouts who aren't even attempting to find work or go to school.  Alexandra Pelosi's documentary video (featured on Bill Maher's show Real Time) around a New York City welfare office that showed able-bodied people who had decided they didn't want to work asking for a hand-out turned my stomache.

In 2011, I paid a total federal income tax rate of 20.0%.  I additionally paid 4.4% of my income to New Jersey state income tax.  Payroll taxes (Social Security, Medicare and New Jersey unemployment taxes) added another 3.2%.  Property taxes on my home (a fairly modest one in the Philadelphia suburbs) amounted to another 3.1% of my income.

So, even excluding state sales taxes, gas taxes, tag fees, etc., my total tax bill amounted to 30.7% of my income.

47% of the country pays no income tax.

Should my taxes be higher?

You could argue that they should - I could certainly live off less than 69.3% of my income.

But the truth of the matter is that raising my taxes won't solve our current economic situation.  I'm in favor of allowing the Bush tax cuts to expire for those making over $250K, as President Obama has advocated.  But those cuts are a mere 10% of the cost of the Bush Tax cuts.  The other 90%?  The reductions in middle class taxes and the increased deductions that dropped many lower income tax payers from the roles.

You may think it's wise or unwise to tax the rich more.  But to be intellectually honest, it really doesn't matter.  If you are going to raise a meaningful amount of revenue for the government, you are going to have to tackle higher middle class taxes.

I don't deny that I have been lucky in life - good genes, being raised in a strong household, having access to an excellent public school system and the right opportunities have aided me in my path to being in the top 5%.  There is no doubt that a kid in rural Mississippi or Compton will not in general start life with the same advantages that I did.  That's why I don't mind paying a little more to try to help even the playing field.

But don't be mad at me for my success...I got there through the combination of luck (above), hard work and discipline.  I don't make my money firing people or raiding old ladies bank accounts (although firing people, on occasion, is a part of most management jobs.)  I do an honest days work and think that shareholders in my company get a good deal at the amount I'm paid.

I don't mind contributing, but I think my story, and most of the 1%ers too, are stories to be studied in how to succeed in America, not stories to be lambasted as greedy and arrogant.

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How the Framing of the Story Changed, Newt - Get Out!, Looking Ahead to the General

The Inevitable Story Gains Legs
One of Mitt Romney's selling points to the GOP for the past couple of months has been that Romney inevitably would become the GOP nominee and had the best shot of beating President Obama in November and that the party should therefore line up behind him as continuing the primary fight only served to help the President's re-election prospects.

It was not a particularly sexy story - if you are a Republican, you'd much rather your nominee seek your vote because his views align with yours, his vision of the country is compelling, he has proven strong leadership, etc. versus "pick me, because you have no choice", but the story was more or less born out by the facts.  Romney wasn't and still isn't completely inevitable, but the math for anyone else to win is extremely difficult, as detailed in my last post.

The media - both the right (Fox News), the left (MSNBC) and the center (CNN) largely reported on but poo-pooed the assertion of the Romney campaign.  The reason is obvious - a competitive primary season that drags on generates more news coverage and ratings than an inevitable candidate just going through the motions.

The right wing of the Republican party largely rejected the narrative as well.  Romney wasn't conservative enough, was only winning pluralities, just COULDN'T be the choice of the home of the tea party if you were on the right.  So this odd marriage between the mainstream media and the right wing of the party kept the story of a competitive primary alive.

But a funny thing happened after Romney's victory in Illinois.  The GOP finally started circling the wagons.  Jeb Bush gave a belated endorsement to Romney.  Conservative king-maker Jim DeMint stopped just short of a formal endorsement, but made his support very clear.  The media started asking if the thing was over.

The odd thing is, the past week has gone exactly how anybody would have predicted it would have gone.  Romney won a large, urban state outside the south (Illinois) decisively, Santorum won a medium-sized deep south state decisively (Louisiana.)  It doesn't seem like the arc of the campaign has changed at all and yet the discussion has shifted entirely.

Maybe people are just finally realizing the math, maybe the election night coverage ratings are dwindling, maybe Republicans are starting to realize that losing to President Obama in November is quickly moving from a possibility to a probability, I don't know. 

At any rate, the race takes a little bit of lull this week with no contests going on (but surely lots of waving of Etch-a-Sketches), but confronts three winner-take-all contests worth a total of 98 delegates a week from Tuesday in Maryland, DC and Wisconsin.  Romney is leading all of those races and could pad his current delegate lead, which I estimate stands as follows (with some delegates yet to be decided in the last two races, pending final results):
Romney - 538 (53%)
Santorum - 254
Gingrich - 149
Paul - 67
Perry - 3
Huntsman - 2

Drop Out Gingrich - And You Too Ron Paul
I have long enjoyed the romantic story of Don Quixote, the Man of La Mancha, a man convinced he was a knight taking on giants (which were actually windmills.)  The term quixotic has entered our vocabulary as a romantically-inspired quest for a near-impossible goal.

But there comes a time to turn the sword in.  Newt Gingrich's time is here.

Newt Gingrich's power base has always been the deep South.  After having lost both the Alabama and Mississippi primaries, coming in a distant third in Louisiana clearly demonstrates that even his base has abandoned him.  If he can't do better than third in Louisiana, what states will he even be remotely competitive in?

Gingrich clearly cannot win the nomination.  He may be hanging around hoping that nobody gets to the magic number and he is a second ballot nominee.  But only an insane GOP would put him through on the second ballot.  In the unlikely event that Romney doesn't get to his magic number, he'd probably be able to build a coalition to get there.  Even if he couldn't, the GOP would be far more likely to broker a deal for a better candidate such as Jeb Bush or Chris Christie than to give the nomination to the third-place also-ran with more baggage than the cargo area of a 747.

Newt's funding has to be drying up - even rich Super-PAC donors want to know that they aren't just burning the money.  I actually expect that he will finally see the light and drop out soon.  He does like the spotlight, but the media has started ignoring him more and more.  It can't be much fun anymore.

And while we are on the topic of people who should drop out, let's talk about Ron Paul.  In the past 16 nominating contests, the man who has said over an over again that "it's all about winning delegates" has won a grand total of 11 of them out of 557 that were available in those contests.  Not only does Paul not have a shot at the nomination, his delegate total isn't gaining, so he isn't even winning any influence at the convention.

Paul, unlike Gingrich, will be able to keep raising funds for as long as he desires to continue.  But it is wrong for him to do so.  It's a free country and people are giving to Paul freely, but telling the devoted libertarians that give small donations to him that they are doing so because Paul has a real shot at the nomination (something that they are still utterly convinced of if you reading the comments section on any story on Paul) is disingenuous.  Paul had a good run, made some great points and had an unblemished legacy of supporting liberty and freedom in Congress and as a Presidential candidate.  It's time for him to stand aside.

General Election Catch-Up
Part of Romney's urgency to get the nomination locked up is so that he can get on to taking on President Obama, who has been quietly building a sizable lead while the Republicans fight for their nomination.

My average of averages has him up by 4.1% nationally in a heads up match with Romney, short of his 2008 victory, but a sizable lead that would surely deliver an electoral college victory.

In the key battleground states, here is the state of things:
Previously Lean Romney States:
Missouri - remains a Lean Romney - Romney +9% in recent polling
Indiana - remains a Lean Romney - no recent polling, but Obama needed a 7.2% national win to eek out a win in Indiana, so he would presume to trail by about 3% here
Florida - FLIPS TO LEAN OBAMA - Obama +3% in recent polling
North Carolina - FLIPS TO LEAN OBAMA - Obama +3% in recent polling
Ohio - stays with Romney...for now - the 2 most recent polls tell opposite stories, with one having Romney up by 6%, the other with Obama up a whopping 12%.  Based on the national margin, I'll leave it with Romney for now, but will keep an eye on it.
Virginia - FLIPS TO LEAN OBAMA - three recent polls all have Obama leading by margins of 9, 8 and 17% respectively.

Previously Lean Obama States:
New Hampshire - stays a Lean Obama - up 10% in the most recent polling
Colorado - no recent polling - stays a Lean Obama based on the national polling
Michigan - now a Likely Obama - up by 18% in recent polling
Pennsylvania - remains a Lean Obama - up 6% in recent polling

Other key states I am watching:
Arizona - remains a Likely Romney for now, but definitely one to watch - the two most recent polls have him leading by 5% and 11% respectively
Iowa - moves down to Lean Obama - Romney is leading in one of two recent polls (by 2%, Obama leads by 5% in the other poll)
Oregon - remains a Likely Obama for now, but his lead is 8 to 11% in recent polls, could be competitive if the race tightens
Wisconsin - another one that remains a Likely Obama but is one to watch, with Obama's lead at 5 to 14% in recent polling.
New Mexico - no sign of let-up for Obama, he is up by 19%.  Remains a Likely Obama and probably will not be competitive in November.
Minnesota - Obama up by 10 to 13% in recent polling.  Remains a Likely Obama.
Maine - Obama now up by 23% in recent polling.  Move from Likely Obama to Strong Obama.

So with all of that, we get the following map (assuming neither Nebraska nor Maine split their congressional districts):

Note: Map created with the help of 270towin.com

Clearly at 329-209, Mitt Romney has work to do in the general election.  He needs to take back Virginia, North Carolina and Florida plus one additional state from the Lean Obama column (either New Hampshire, Colorado or Iowa.)

And keep in mind, his war chest is oversized relative to the GOP field, but not relative to the President, who will surely be a fund-raising juggernaut again this year.

Of course, it is way early.  Michael Dukakis looked pretty good against George H.W. Bush at this stage in the race.  The economy, public perceptions, the foreign policy arena, it could all change a lot between now and November.

But what is clear is that Romney has an uphill battle.  Which is why he wants to wrap up the nomination now.

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Romney May Be Winning Ugly, But He Is Winning

The media narrative over the past couple of weeks has consistently been about how Mitt Romney is struggling to close the deal with Republican primary voters.  The argument is not completely without merit.  He is running against a crew of retreads and discards that includes a former House Speaker who resigned his office after his own party forced him out of the Speaker's seat and who has managed to secure no allies among his former colleagues, a Senator who was bounced from office by voter in Pennsylvania by a large double-digit margin, and a 76 year old libertarian who wants to abolish social security.

Yes, if Mitt Romney were a better candidate, he would have sealed this deal a long time ago.  But he is who he is.  And it is important to understand that while Romney may have underperformed what some expected of him against this field, he is methodically winning.

Should Romney have had to resort to scorched Earth politics to win Florida?  Maybe not, but he won Florida and all its delegates.  Should he have won bigger in his birth state of Michigan?  Probably, but the fact is that he won the primary, even if it was ugly.  Should Ohio have been such a close battle?  Probably not, but Mitt walked away with a small popular vote victory and a large delegate victory, thanks to Rick Santorum's inexplicable inability to even register a full delegate slate.

Different web sites have different delegate counts, thanks in large measure to the complex, multi-step processes that some of the caucus states use to allocate delegates, but I've done my own math.  I also exclude RNC delegates from my count, which are the Republican equivalent of Super Delegates, party leaders from each state that have automatic votes at the convention, since their pledge or endorsement from a candidate is not a firm commitment and can change at any time.

As of today, in the contests conducted to date, there are 34 delegates that I need more information and final counts to allocate.  Excluding those delegates, the counts to date, through the first 21 contests are as follows:
Mitt Romney - 368
Rick Santorum - 149
Newt Gingrich - 116
Ron Paul - 63
Rick Perry - 3
Jon Huntsman - 2

Of note, Mitt Romney is now across the 50% threshold of the delegates awarded to date, thanks to his overwhelming victory in his home state of Massachusetts and his big win in Virginia, where Santorum and Gingrich failed to make the ballot.

Of course, you need 1,144 delegates to secure the nomination.  While I can't see any conceivable math to get any of the other candidates to 1,144, their best collective hope would be to keep Mitt from 1,144.

But even this seems highly unlikely.  In theory, the next couple of weeks could be tough for Romney with Kansas, Alabama, Hawaii, Mississippi and Missouri on tap next.  But Romney is ahead in Alabama in a recent pole and if he wins Alabama and Hawaii (where he will presumably do extremely well) in addition to picking up delegates from the territories in Guam, Puerto Rico, American Samoa and the Northern Marinas (yes, the get delegates and their events are also in the next two weeks), he will maintain a large lead.

And the map gets a lot more favorable from there.  Illinois is a big delegate prize on March 20th that should break strongly for Romney.  And he has an April firewall of Connecticut, Delaware, Maryland, New York and Rhode Island, with Santorum only having a real shot in Pennsylvania and Wisconsin.

And if it goes deep, Romney has the ultimate firewall in June, winner-take-all contests in California and New Jersey, which award a whopping 222 delegates between them, plus a last-in-the-nation contest in Utah that seems sure to award him all 40 of its delegates.

So it appears highly likely that Romney will get to 1,144 by the convention.  The math and all the proportional contests make it difficult to do so anytime soon, which will probably keep at least Santorum alive and running until then (presumably Gingrich will finally bow out if/when he fails to win any of the deep south contests in the next week), just as Hillary was able to keep running against Obama until the bitter end, despite the fact that Obama held a delegate lead the entire course of the 2008 primary season.

It will keep being an entertaining race, but for all the twists and turns, it certainly looks to end the way I always believed it would, with Mitt Romney as the Republican nominee.

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Is There Any Path Forward for Anyone But Romney After Florida?

It's a dangerous game to call a race before it happens.  It's especially dangerous this year, where late surges in Iowa (Rick Santorum) and South Carolina (Newt Gingrich) have already led to results that would have been surprising just 72 hours earlier, but Mitt Romney sure looks poised to coast to a comfortable win in Florida, having beaten back Newt's surge coming off his South Carolina win with a couple of strong debate performances, matched by Newt's two weakest showings of the long series of debates held this cycle.

If Romney wins Florida, is there a path forward for anyone else?

Rick Santorum already intends to be in Nevada on election day in Florida, trying to build support in that caucus.  And a caucus environment certainly suits him better.  But I can't sketch a possible map to victory for Santorum, especially if he finishes a widely-expected distant third in Florida.

Newt would solider on, no doubt, but if he loses by 8 points in Florida, how is he going to fare in more moderate venues like Nevada and Michigan?  He has no catalysts, with no debates scheduled for three weeks (and Romney not likely to agree to new ones) and will continue to get outspent and out operated by a better-funded and better-organized Romney campaign.

Ron Paul will no doubt solider as deep as his money allows him, continuing to try to amass as many delegates as he can to influence the convention and get a prime speaking spot, but he doesn't even have a state that looks like a possible win for him.

So, Mr. Romneycare, Mr. Bain Capital, Mr. 15% Tax is looking like he is back comfortably in the driver's seat, with no serious opposition, if he wins.  I'm sure President Obama will be disappointed that this primary doesn't drag on, with the candidates throwing rocks at each other non-stop and leaving him above the fray.  And I'm sure Mitt Romney isn't his first, second or third choice in who he will face in the general election.

But it sure looks all over but the crying, unless Gingrich or Santorum completes a hail mary next Tuesday.

Do Newts Bounce Like Dead Cats?

Here Lizard, Lizard
The "dead cat bounce" is a term commonly used in the world of investing.  A company, destined for the scrap heap of bankruptcy, has seen its stock go down and down.  From $100 to $10 to $1, it is on a steady decline.  Then, all of a sudden, it jumps up from $1 to $3.  But the jump isn't real - the fundamental problems that plague the company haven't gone away, people have just forgotten about how severe they are.  Before you know it, the stock is at $0 and the company is bankrupt.  Those who bought it at $3 are wondering what the heck they were thinking, boarding a sinking ship.  It's the same as dropping a dead cat out the window...it will bounce up when it hits the ground, but that isn't because it's coming back to life...and it ends up just as dead on the ground a second later.

Is Newt Gingrich a sinking ship?  48 hours ago, he was on top of the world.  After having ridden the wave to the top of the polls earlier in the election season, Gingrich had been written off for dead.  Somehow, against all odds, seemingly, Gingrich battled back to win a clear cut victory in the South Carolina primary by a wide margin.  All of a sudden, he was up 9 points in some polls in Florida.  The whole narrative of Romney's inevitability was fading before our eyes.

48 hours later, his poll numbers in Florida seem to be dropping as fast as the gravity that pulls down a dead cat.  One poll out today has that 9 point lead diminished to 2 points, another has Romney ahead by 2 points.

So is Newt Gingrich a dead cat bouncing back to Earth or is there just noise in the polls?  Are we headed towards a nail-biter in Florida or will Romney be handily in command by Tuesday?

The debate on Thursday matters.  Where the torn apart conservative GOP electorate, stuck between an unelectable lizard and an unprincipled glove, finally come down on the question of whether they want the best chance to win or the best representation of their views comes down is just as critical.

Certainly no one in the GOP is happy.  And President Obama's battle for re-election against a tough economy and a toxic political environment looks less like a mountain and more like a speed bump every day.

Contrasts and Small Ball
President Obama can give a speech, lest any of us forget the best political skill of our Commander-in-Chief.  But the vision last night seemed a lot less ambitious, a lot more sober and a lot more political than his previous efforts at a State of the Union speech.

In reality, all State of the Union speeches are inherently political.  Most SOTU proposals go nowhere.  Did George H.W. Bush get his 1% across-the-board tax cut?  How about Bill Clinton's Hillarycare?  George W. Bush's privatization of social security and comprehensive immigration reform? Nowhere to be found.

So President Obama's goal wasn't to make a big sweeping set of policy initiatives.  It was to draw a contrast with Republicans and propose some easy wins.  Ban insider trading in Congress?  Who would be against that but crooked Senators?  Prevent the next Horizon oil spill?  Yeah, I think we are all on board with that.

It was a good speech that will give the President a short-term bump in the polls but will likely soon be forgotten in the deafening noise of the campaign. 

This was more a re-election announcement that a look at the state of our union.

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The Florida Firewall

Newt Gingrich's dramatic comeback in South Carolina has recast the Republican race through a new lens.  A week ago, we all believed that Mitt Romney won Iowa, he dominated in New Hampshire and was well on his way to winning South Carolina.  The Florida race was almost an afterthought as everything would be done but the crying if he swept the first 3 contests.

We have since learned that, in fact, Rick Santorum won the Iowa Caucuses.  Granted, the difference between an 8 vote win by Romney (as we thought on caucus night) and a 34 vote win for Santorum (as we have since learned) is largely psychological - they still both get 7 delegates in either scenario, but the psychology is important, because I firmly believe that the Santorum surge in New Hampshire would have been larger had people known he had won the first race.

The psychology now is that the race is 1-1-1 headed to Florida.

If we look to history in who will win this race, it does nothing but confuse us. I wrote an earlier blog showing how it has always been essential for a prospective GOP nominee to win either Iowa or New Hampshire.  The other historical fact that I hadn't mentioned is that the ultimate GOP nominee has also won South Carolina every race in the past 30 years.  Being that Gingrich won South Carolina but not Iowa or New Hampshire, one of those two historical trends is about to be broken.

Florida is an odd beast for the next race.  The state itself is a swing state, but its primaries are closed (neither Independents nor Democrats can participate) as opposed to the open primary we just saw, so the primary electorate tends to be fairly conservative.  Tea Party loyalist Marco Rubio thumped well-established moderate Charlie Crist in the GOP Senate primary in 2010.

All of the polls to date show Mitt Romney with a 20%+ lead over both Santorum and Gingrich.  But if we've learned anything in the past week, it is that those numbers can shift and fast.  And they will.  When new polls come out early next week that are sampled after the Gingrich win in South Carolina, he will be a lot closer.  Whether he can win remains an open question.

Romney will come out punching a lot harder - he has to.  The negative ad money will be mind-boggling on all sides of the campaign.  And, as has been the trend this year, the two debates in Florida next week will be critical to determining the fate of the race.

Mitt Romney is still the favorite to ultimately wrap up the GOP nomination.  After Florida, we have the Nevada Caucus 4 days later, which would seem inhospitable turf to Gingrich (although it's a race that Ron Paul could surprise in), then 3 days after that two meaningful primaries (Colorado and Minnesota) and one primary that doesn't count (Missouri holds a primary but awards delegates based on a caucus later in the season...Gingrich isn't even on the ballot in the Missouri primary.)  There are a few events over the next few weeks, including the Maine Caucus on Feb 11, big ticket primaries in Arizona and Michigan on Feb 28 and the Washington caucus on Mar 3.  But the big prize is Super Tuesday, March 6, where 10 states hold nominating contests at once. 

Whether Gingrich can compete on a Super Tuesday scale is directly related to whether he can show well in the states leading up, and most critically Florida.  If he finds a way to pull off an upset in Florida, then I would place him at even money with Romney to win the nomination.  If Romney wins Florida soundly, it will silence the Newt momentum.

As of this morning, Intrade has the odds on an ultimate Mitt Romney nomination at 72%.  But they were over 90% a week ago.

Somewhere in the White House, Barack Obama is letting out a laugh.

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All Signs Point Towards a Gingrich Win and a Continuing Race

It's amazing...a week ago Mitt Romney led comfortably in South Carolina.  Tonight, with just a few minutes to go before the polls close, it appears not only will Newt Gingrich be the victor, but may win be a decisive, double digit margin.  His late rise in the polls is nothing short of breath-taking, given how much coverage and how many debates have taken place and how little was left to be learned about the candidate.

But South Carolina conservatives just needed a reason and a clear candidate that was the alternative to Mitt.  Gingrich stormed through the two debates with fire and red meat and Mitt stumbled and bumbled around tax forms and health care.

A double digit Gingrich win makes it an effective two-man race.  Rick Santorum may quit if he finishes fourth or a distant third (both distinct possibilities.)  And Gingrich is much more capable of attacking in a one-on-one fight versus in a multi-front campaign with a divided "not Mitt".

But Gingrich's challenges with organization and money aren't going away, and while he may be able to mount a charge in Florida, when the campaign spreads out to multiple states at a time shortly thereafter, he is still a heavy underdog to Mitt.

Expect the news networks to call it at 7:01.

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And Then There Were 4....

Rick Perry's exit from the Republican field makes the race far more interesting as it will undoubtedly lead to some level of consolidation of the "not Mitt" vote in South Carolina.  Perry quickly endorsed Newt Gingrich for President and Newt certainly becomes a more likely contender for a South Carolina win. 

Gingrich has been catapulting in the polls as a result of his strong debate performance on Monday and he hopes for a repeat tonight.  Romney is still the betting favorite, but Gingrich is closing in.

In the mix of all of this is the odd report from Newt's ex-wife that he had asked for an open marriage.  I have no idea if the allegations are true and don't particularly care, but those types of liberal personal social activities are poison to social conservatives.  On the other hand, did anyone actually think Newt was a classic conservative family man?

The debate tonight should be interesting.

Can Mitt Romney Deliver the One-Two Punch?

In a nomination fight that thus far has been appropriately centered around the debates, tonight's debate is the highest-stakes contest yet, for a number of reasons.  First, it is the last time that all of the candidates will be on stage together before the first-in-the-nation caucuses in Iowa on January 3rd (there are two additional debates between the Iowa Caucuses and the New Hampshire primary.)  Second, being a weekday evening debate on Fox News, it is highly likely to get amongst the highest viewership of any of the recent debates.  Third, support is still very soft among the Republican electorate for all of the candidates and so significant shifts in the polling are still not only possible but highly probable.  The question is in what direction.

Mitt Romney has been quietly making headway over the course of the past week.  He hasn't scored any big knockdowns against Newt Gingrich, but Gingrich's support has slowly started to soften as potential voters begin to evaluate him on his own merits rather than as simply the latest "not Romney" choice.  Also, both Romney and Rick Perry have considerably stronger ground organizations and greater financial resources and are spending like crazy to unseat Newt.

We could see an epic moment that moves the polls.  But if we don't, what will happen over the course of the next couple of weeks?

First, let's understand that while history doesn't indicate that either Iowa or New Hampshire individually is particularly predictive of outcomes, it is almost impossible to win the nomination without winning one of the two.  Looking back at competitive GOP nomination fights starting in 1972 (when Iowa's caucus moved up to its current position), here is how the eventual nominees fared in the contests (I've excluded re-election campaigns where there wasn't meaningful competition - in those cases, the nominees obviously won both contests.)


1976 - Gerald Ford - won Iowa and New Hampshire
1980 - Ronald Reagan - lost Iowa, won New Hampshire
1984 - Not Competitive
1988 - George H.W. Bush - lost Iowa, won New Hampshire
1992 - George H.W. Bush - won Iowa and New Hampshire
1996 - Bob Dole - won Iowa, lost New Hampshire
2000 - George W. Bush - won Iowa, lost New Hampshire
2004 - Not Competitive
2008 - John McCain - lost Iowa, won New Hampshire

So of the 7 nominees in competitive races, 2 won both races and the other 5 won at least one of the two.  4 of the 7 won Iowa and 5 of the 7 won New Hampshire.

Clearly, you can afford to lose one of the two and still get the nod, but winning without at least one of the two hasn't been done in recent history.

Mitt Romney, for all of his soft support, is still a huge favorite to win in New Hampshire.  He has a geographical advantage, being Governor of a neighboring state, he is popular with moderates and independents that have a huge influence on the primary race in New Hampshire's open primary system and he has an average of about a 10 point lead in the polls there.

So Mitt can clear his long-uncertain path to the nomination if he finds a way to land a knock-out punch in Iowa.  But Iowa is very unpredictable at this point.  Newt Gingrich still leads on paper in 2 out of the 3 polls published this week, although Romney leads the third.  But Newt's ground game being week could be very damaging in notoriously hard-to-poll-for caucuses, given that getting a caucus vote involves getting someone to a meeting place and having them stay for hours at a time to be publicly counted, not simply getting them to show up to a poll to vote.  And Ron Paul, darling of the Tea Party and libertarians everywhere, is lurking in the wings with his rabid supporters, consistently only a few points out of the lead.  And rest assured, his supporters WILL show up.  Mitt Romney, though his supporters are soft, has a fantastic ground organization to turn out the would-be supporters.

It's actually close to a pick 'em race in Iowa given all these factors.  A Romney win in Iowa would probably come close to ending the race after New Hampshire, since his one-two punch would be almost impossible to overcome, even if he lost South Carolina.  A Ron Paul win would make for an entertaining showdown between Romney and Paul down the road, as Paul is almost certainly in it for the distance, but few take Paul's chances at winning the actual nomination seriously, and it would likely be a complete disaster for the GOP if it happened.  A Newt win in Iowa sets up a pick 'em horse race for the nod.  So the outcome of Iowa is critical to the whole thing.

Can Romney deliver the one-two punch and sew up the nomination?  Tonight may be our first indicator.

When You Can't Beat Mr. Generic

Is Newt Gingrich the front-runner in the GOP race?  It's a close call.  Gingrich has healthy leads in the early caucus and primary states, with the exception of New Hampshire and leads nationally.  The latest polling averages, which are somewhat in flux following Herman Cain's exit, but are trending towards Gingrich as a result of that line-up change are as follows:
Iowa: Gingrich +14%
New Hampshire: Romney +12%
South Carolina: Gingrich +21%
Florida: Gingrich +24%
Nationally: Gingrich +13%

If the primaries were all held today, I have no doubt that Gingrich would be the nominees.  But, as a friend of mine is fond of saying, if the election were held today, we'd all be a bit confused, because we thought it was scheduled for later.

Romney still leads in the betting money, although the gap has narrowed.  He is now 46% to win the nod on Intrade, with Gingrich up to 35%, Jon Huntsman at 8% and Ron Paul at 7%.  4% belongs to the collection of "all other" that includes Bachmann, Perry, Santorum and whatever other also rans you want to throw in the mix.

So, it's a 4-way race, but really a 3-way race if you exclude the crazy money behind Ron Paul (not going to happen...I'll give you those 15:1 odds all day long, just send your checks in), maybe a 2-way race if you don't think Jon Huntsman has a shot (I'm not ready to totally write him off, but I would consider those odds optimistic, to say the least.)

So, is Gingrich the front-runner?  Not clearly yet, but he's trending that way.  You can forgive the betting public for not being full believers yet - they've seen a lot of people lead the polls briefly and fade fast.  Gingrich seems a little more sticky than Trump, Bachmann, Perry and Cain and he is certainly better known.

But let's play along for a second.  Let's say Newt gets the nomination.  He has a big problem in the general.  People like him a whole lot less than a "generic" Republican.

The polls bear out the huge headwind.  President Obama is at the low point of his popularity, with his approve minus disapprove floating around the -10% range.  In other words, if the election were today and it were an up or down vote on Barack Obama, the President would lose by 10 points.

If you pit the President against an unnamed Republican, he fares pretty close to that 10 point margin.  The latest Rasmussen tracking poll (the only recent poll pitting Obama against an unnamed Republican) shows the President trailing "Mr. Generic" by 8%.

But the President won't be running against Mr. Generic.  If he runs against a different Mr. G, Mr. Newt Gingrich, he fares a whole lot better.  Against Newt, the President leads by an average of 5% nationally in recent polls.  He leads comfortably in the critical swing state of Colorado.  He leads by healthy margins in Iowa and New Hampshire.  He is ahead in Florida.  He's even in John McCain's Arizona.

If this is what Newt Gingrich looks like against Obama when Obama's approval rating is this bad, how ugly would this map look for Gingrich if the economy recovers or Obama's popularity recovers?

What the heck is the GOP thinking?

Romney Needs Some Offense, Cain Exits Stage Left, A Republican President and Democratic Congress?

Defense Doesn't Work When You Are Behind
Playing it safe in a Presidential primary is a great strategy when you are sitting on a big lead and simply waiting out the clock until the actual voting begins.  Mitt Romney has been doing it basically since the start of the primaries.  Sure, he took on Rick Perry during Perry's momentary surge on immigration.  He definitely fired away at Herman Cain's 9-9-9 plan when it briefly looked like Cain might be a contender.  But he never really got down and dirty, stretching Reagan's 11th Commandment to Republicans (to not attack other members of your party), because, well, up until now he didn't have to.

From the very early contenders, one-by-one, anyone approaching being able to challenge Romney has done a good job of disqualifying himself or herself.  Trump didn't run.  Bachmann flubbed very basic facts.  Perry talked and acted downright stupidly.  Herman Cain...well, more on that later, but let's just say he made a few errors.  But the wily old former Speaker of the House Newt Gingrich?  He's made virtually no errors so far.

Sure, he consulted for Fannie Mae.  Yes, he's been twice divorced, at least once under very ugly circumstances.  But he's been teflon so far.  Conservatives like Romney because he is one of them, his views on immigration notwithstanding.  Party elites are starting to take him seriously, because he's played the game in Washington before and presumably knows how to run a campaign.  And Newt stayed above the fray in all the debates, refusing to say a negative thing about the other contenders, largely because they allowed him to get away with that and never challenged him directly.  The debates, which have been probably more critical this year than in any prior election cycle, are his home field.

Romney is still the betting favorite.  Intrade odds peg Romney's chances at the nomination at 49%, Newt's at 35% (Huntsman and Paul are at 6%, Perry at just under 3%.)  This is largely because Romney has been a steady-Eddie, always near the top of the polls, while other candidates rise and fall.  And he's been my favorite for the nomination from the get-go.

Not anymore.  For the first time, I have serious doubts about Romney's ability to win the nomination.  Before you think I'm one of those commentators that jump their predictions based on the latest polls, go back and read my writing when Bachmann, Perry and Cain had their surges.  In all 3 cases, I stated that I strongly believed that they would fade quickly and that Romney would be back on top.  But Newt is different.

First of all, we've had two debates since he surged to the lead in the national polls and, rather than start to fade, as the other short-lived leaders of the race did, Newt is actually strengthening.

Secondly,  Newt is strong in all the key early states except New Hampshire (Romney still comfortable owns that one) and could very well sweep Iowa, South Carolina and Florida by decisive margins, which would make overcoming his momentum extremely difficult.  At this writing, his poll averages in the 4 early states are +14% in Iowa, -18% in New Hampshire, +23% in South Carolina and +24% in Florida.

Third, time isn't on Romney's side this time.  We are 31 days from the Iowa Caucuses.

Romney has to do SOMETHING to go on offense and change the trajectory of the race.  And right now, he's doing all the wrong things.  He turned down a chance to debate Gingrich one-on-one this month, allowing Huntsman to steal the thunder of an event that will now undoubtedly erode Romney's support, regardless of the outcome (if Gingrich performs well, he will solidify his support, if Huntsman outperforms him, he will steal moderate votes from Romney.)  He was an absolute train wreck this past week in a one-on-one interview with Fox News anchor Bret Baier, one of the few he has given.

There is a full-field debate tonight and Romney really needs to push hard on offense to change the trajectory of the race.  If Iowa were today, Romney would be on a path to lose.

Herman Cain, We Hardly Knew You
Comedy writers everywhere shed a tear today when it was learned that Cain would likely announce today in Atlanta that he was dropping out of the Presidential race.

It will soon be forgotten that for a brief period, Cain actually led in the national polls for the nomination.

The guy who gave us 9-9-9, comically uninformed answers to questions about foreign policy and a sordid set of allegations around his dealings with women will likely soon be gone from the race, a month before the voting even started.

As I said a few weeks ago, is there any doubt left that Tim Pawlenty is kicking himself for dropping out of this race?

Throw Out All Them Bums
President Obama's approval has dropped into the low 40s and we appear to be set up for a very competitive race for President only because of an exceptionally weak GOP field.  He has some hope in the form of a slightly improving economy and the likelihood that he will face either a polarizing figure (Newt Gingrich) or a wish-washy flip-flopper (Mitt Romney) in the general.  And he will have lots of money.  He's still a very slight betting favorite to win re-election, but at this point the outcome of the Presidential race is anyone's guess.

The story that isn't making any headlines, but could loom large in the 2012 races is the anti-incumbent and therefore largely pro-Democratic sentiment with regards to House races.  Generic polling favors Democrats (by a point or two) for the first time since 2008.  The GOP has tough turf to defend, holding virtually all the swing districts.  I'm not ready to say that the Democrats have a good chance to take back the House - redistricting puts them at a disadvantage, as does the large majority the GOP currently holds, but the possibility for significant gains by the Dems next November is looking like a real possibility for the first time. 

The Senate still looks bleak for the Democrats, with a very tough map to defend.  If they could eek out holding onto a narrow majority, it would be a huge victory for them, but that would basically mean winning almost all of the swing races.

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Gingrich Falls, Weiner Tweets, The Economy Sputters

Just to Reiterate, Newt Doesn't Have a Chance
Last week, I had him third in a very weak field of declared candidates, a distant third to the close-to-insurmountable Mitt Romney and the far behind but highly credible Tim Pawlenty. Apparently his closest advisers agree that things are not going particularly well for the one-time Speaker of the House in his bid to become the GOP nominee as 7 of his top guys all resigned on the same day this week. A few are presumed to be going to work for Tim Pawlenty, a few others are rumored to be in talks with Rick Perry if he decides to mount a run. Either way, those closest to the Gingrich campaign appear to want nothing to do with it. And why should they? In national polls, Gingrich is not only getting trounced by declared-candidate Romney, he's getting trounced by unannounced candidates Palin and Guliani, and even getting beat by sideshows Herman Cain and Ron Paul. Gingrich will likely not win a single nominating contest and should be gone after South Carolina, if he doesn't pitch in the towel sooner.

Anthony Weiner, The Sad Clown
Call it the curse of technology. Call it the oldest fault in men since time began. Either way, once well-respected Rep. Anthony Weiner (D-NY) is now a sideshow. His sexting with at least 6 women over the past 3 years, including sending explicit photos has everybody and their brother calling for his resignation, including virtually all high profile Republicans and high profile Democrats such as House Minority Leader Nancy Pelosi (D-NY.)

What Weiner did was incredibly stupid. I always say that the internet is written in ink and you'd best not do anything on there that you wouldn't want your mother to see. Pictures of your erection certainly qualify there. Having said that, I'm not sure I'm on board with the Weiner resignation brigade.

It is not clear to me that Weiner has done anything even remotely illegal. It does not appear that he used government resources in his sexcapades. So at the end of the day, if all he did was send dirty photos, are his actions really so much worse than what the likes of Bill Clinton, Newt Gingrich, and a whole host of other politicians did, who actually had sex with women while in office and stuck around? And how exactly does this effect if Weiner is a good congressman?

I guess we still have a strong puritan streak in this country.

Unemployment and Slow Growth - Not a Good Recipe for Obama
The President has to be fearful about the economic news of late. 1.8% GDP growth last quarter. Unemployment at a virtual flatline for the last several months right around the 9% line (9.1% last month, according to the BLS), nearly 2x what a healthy economy would be. Even the stock market, which had been the bright spot, has started to sputter with all the bad news.

If the election is going to come down to the economy, as I firmly believe it will, President Obama is going to need for things to be better a year from now than they are today, or he may find himself designing a Presidential library in Chicago.