Tuesday, November 29, 2011

New Allegations Doom Herman Cain

A month after the original allegations of sexual harassment surfaced, Herman Cain appeared to be surviving, if not weathering the storm. His support was on a gradual decline--a decline which may have been more a result of Cain's foreign policy gaffes than his scandals. Though some of Cain's support was shifting to Newt Gingrich, Cain still polled at substantial numbers, particularly in Iowa and South Carolina. He might not have been able to win those states, but he could at least split some of the potential support for Gingrich and play a role as an Anti-Romney.

Now it appears Cain's campaign is in ruins. A woman came forward claiming a 13-year affair with Cain. She was able to produce some evidence of a personal connection to Cain, which Cain did not deny. Cain did deny that the affair took place. Unfortunately for Cain, this was one denial too many. Only the most fanatic Cain supporters will continue to believe that he is a serviceable general election candidate.

Early reporting suggests that Cain is considering whether or not to drop out of the race. Even if he does not quit, the fact that he considered it will also be counted against him. Herman Cain's odds of winning the nomination are now 0%, according to Elephant Watcher's most recent recalculation. Though Cain was at one point leading all of the national polls (and Iowa and South Carolina polls), Elephant Watcher never gave Cain more than a 5% chance of winning the nomination. Cain was weighed down too heavily by his inherent weaknesses as a candidate. Now those weaknesses have doomed his campaign.

Ironically, the person likely to benefit most from Cain's demise is Gingrich, who admitted to having affairs during both his first and second marriages: The Cain supporters who already left Cain largely went to Gingrich, and Mitt Romney obviously prefers to split his opponents' vote as many ways as possible. Cain's further drop is critical because it will push his numbers below the threshold at which his support will disappear entirely. Voters tend to abandon a candidate if his vote is not above, say, 10%, so that they may coalesce around their second choice.

Gingrich continues to be weighted down by issues of his own. Though he has inherited Cain's lead in the polls, and while he is better suited to win New Hampshire votes than Cain was, Gingrich is completely unvetted. No candidate has yet attacked Gingrich. For Gingrich's odds to rise with his poll numbers, he must first demonstrate that he is capable of surviving the same level of scrutiny that destroyed Cain.

Monday, November 28, 2011

Newt Gingrich Continues Rise on Intrade; Romney Falls

A few weeks ago, we took a look at the Intrade market on the 2012 Republican nomination. Since then, another debate was held and much buzz about Newt Gingrich's candidacy has buzzed. How has this affected the Intrade investors' perceptions of the race?

It's clear: Newt Gingrich's odds have risen at the expense of Mitt Romney's. Romney has finally fallen from his peak at about 70% and now stands at 57.0%. This is the first time Romney's odds have moved downward since the rise of Rick Perry in August. The Intrade investors never bought into the Herman Cain mania that swept the primary for about a month. But they're taking Gingrich more seriously.

Gingrich has risen to 21.1%, up from about 14% two weeks ago. A few weeks before that, Gingrich was in the low single-digits. It's worth noting that despite Gingrich's lead in the national polls, the Intrade market still has Gingrich a nearly 3:1 underdog in the race. Thus, they're following the polls, but they're taking them with a grain of salt. But unlike Cain, they think Gingrich has a real chance to win.

Meanwhile, the rest of the field is in the low single-digits. Ron Paul and Jon Huntsman each rose from 3-something percent to about 5.5%, apparently reflecting what investors perceived as good debate performances. No other candidate has climbed beyond 3%.

Where is Gingrich getting his strength in the early states? The Intrade market on the Iowa Caucus has Gingrich ahead of Romney, 35% to 25%. New Hampshire is still overwhelmingly Romney territory with 77%; Gingrich is at 12%. South Carolina has Gingrich and Romney nearly tied at 35%, but Florida has Romney the favorite at 50% to 24%.

Overall, the investors believe Iowa is a close race, with the edge going to Gingrich. New Hampshire is Romney's firewall, making him the only candidate guaranteed to win one of the early primaries. They have South Carolina at a push, perhaps hedging because there's been little polling there. Florida, which is sort of a tie-breaker, leans toward Romney as the overall odds for the nomination do.

Saturday, November 26, 2011

Is Mitt Romney Electable?

For quite some time, Mitt Romney has generally been perceived as the most electable candidate in the Republican field. Although there were several potential candidates who were perceived as electable (e.g. Tim Pawlenty, Mitch Daniels, Chris Christie), they left the race or chose not to enter. Of the remaining candidates, only Jon Huntsman joins Romney in the "highly electable" category. But since Huntsman is in Romney's shadow in New Hampshire, Romney is essentially in a category all his own.

But is this analysis correct? Or has the conventional wisdom overestimated Romney's electability?

Earlier this month, we considered whether Newt Gingrich is electable. In the match-up polls conducted so far, Gingrich trailed Barack Obama badly. Of all the candidates, Romney has done the best in the match-up polls, and he is the only one to get close to Obama.

The following are all of the Romney vs. Obama match-up polls conducted during November:

Romney vs. Obama
11/22 Romney 38, Obama 44 (-06) -- Rasmussen
11/20 Romney 44, Obama 45 (-01) -- Quinnipiac
11/15 Romney 44, Obama 42 (+02) -- Fox News
11/14 Romney 47, Obama 49 (-02) -- Pew Research
11/13 Romney 51, Obama 47 (+04) -- CNN
11/10 Romney 42, Obama 43 (-01) -- Rasmussen
11/10 Romney 44, Obama 48 (-04) -- McClatchy/Marist
11/09 Romney 43, Obama 49 (-06) -- Politico/GWU
11/05 Romney 43, Obama 49 (-06) -- NBC/WSJ
11/03 Romney 47, Obama 46 (+01) -- ABC/Wash Post
11/03 Romney 44, Obama 43 (+01) -- Reuters/Ipsos
11/02 Romney 41, Obama 42 (-01) -- Rasmussen

While Gingrich had averaged about ten points behind Obama, Romney averages about a point and a half behind Obama. Since the general election will not take place for nearly a year, it's also worth looking at the previous months for more data. Consider the following summary how the match-up polls fared since June of this year, when both Gingrich and Romney were in the race. Romney was polled more frequently than Gingrich and did much better against Obama:

In 18 match-up polls, Gingrich was tied or won in 0 of them (00%). Gingrich pulled within 5 points of Obama in 2 of the polls (11%). In 59 match-up polls, Romney was tied or won in 21 of them (36%). Romney pulled within 5 points of Obama in 48 of the polls (81%).

As a further illustration, consider the polling done in New Hampshire by the University of New Hampshire about a week ago. For the state of New Hampshire only, Romney beat Obama by 3 points. In the same poll, Gingrich lost to Obama by 12 points.

What about the effects of a general election campaign? Were Romney to win the Republican nomination, his approval would improve dramatically. After the primary, the winner always enjoys a "rally around the candidate" effect. Romney would also be able to introduce himself to the American public at large; so far he's only campaigned heavily in New Hampshire. Judging by his performance this time around (which is considerably better than his run four years ago), Romney's numbers would improve further. This would put Romney comfortably ahead of Obama.

Romney would also lose support as a result of negative campaigning against him. Unlike Gingrich, however, most of Romney's "negatives" are already priced in, as voters are familiar with the "flip-flopper" attack against him. What are not priced in yet are the attacks against his tenure at Bain Capital, where Obama will claim Romney fired people; unknown is the effect of Obama's allies playing "the Mormon card."

Where does that leave us? The net effect would still leave Romney ahead. Unlike Gingrich, Romney would have one final trump card to play: Marco Rubio is almost certainly going to be Romney's VP nominee. For reasons which will be explored when the primary is over, Rubio would uniquely boost the numbers of the presidential ticket.

Thus, the conventional wisdom proves to be correct in this case: Romney would be by far the most formidable challenge to Obama in the general election. If Romney wins the nomination, it will be in large measure because voters recognize this fact.

Thursday, November 24, 2011

Newt Gingrich Takes the Lead in National Primary Polls

Although national primary polls do not reflect the actual state of the race like early state primary polls do (the outcomes of early contests influence later ones, candidates are not campaigning in the later states, voters in the later states are not paying close attention yet, etc.), they can be useful to look at occasionally. Candidates do pay attention to the national primary polls and sometimes develop their strategies based upon them. For instance, if they see a frontrunner developing in the national polls, they may begin to attack him. The media also like to look at national polls and may create narratives based on them.

For an example of the latter, note that the "Herman Cain is falling" narrative reflects the national polls much more than the polls in Iowa, South Carolina, and Florida, where Cain has still shown strength of late. Granted, there has not been sufficient polling in South Carolina and Florida over the past few weeks, so any new developments may be caught in the national polls first.

The following are the most recent polls taken nationally for the Republican primary:

National Primary Polls
11/20 Gingrich 24, Romney 20, Cain 17, Perry 11 (CNN)
11/20 Gingrich 26, Romney 22, Cain 14, Perry 06 (Quinnipiac)
11/17 Gingrich 22, Romney 21, Cain 16, Paul 09 (Gallup/USA Today)
11/15 Gingrich 23, Romney 22, Cain 15, Paul 08 (Fox News)
11/14 Romney 23, Cain 22, Gingrich 16, Perry 08 (Pew Research)
11/13 Romney 24, Gingrich 22, Cain 14, Perry 12 (CNN)
11/13 Gingrich 28, Cain 25, Romney 18, Perry 06 (PPP (D))

The first thing that the reader should notice is that Newt Gingrich has taken the lead. The second thing he should notice is that Gingrich is only slightly ahead of Mitt Romney. Romney is within the margin of error in some of the polls, and indeed is in first place in some of the polls taken a week ago.

Next, the polls clearly show Cain in third place, several points behind Romney and Gingrich. This leaves the impression that Cain is a spent force, doomed to decline. But Cain's strength is frontloaded in Iowa and South Carolina. Unless or until Cain falls even further, Cain remains a factor. Specifically, he's splitting the Anti-Romney vote with Gingrich.

Over the next few weeks, Elephant Watcher will be paying close attention to whether Cain falls into oblivion. If not, it could represent the Tea Party purists finding fault with Gingrich. Like Romney, Gingrich's conservatism may be called into question. The voters who don't care about electability may hold onto Cain. Those who simply want an Anti-Romney will show less resistance and will jump easily from Cain to Gingrich.

It should be noted that Gingrich's strength is overestimated in the national primary polls because he has not been attacked or vetted yet. Once he comes under the scrutiny of the media and the other candidates, his numbers are likely to fall. In mid-October, we explained some of Newt Gingrich's vulnerabilities. Voters have not taken these into account yet. By contrast, voters have already taken Cain and Romney's weaknesses into account. When a candidate reaches proper frontrunner status (as Romney, Perry, and Cain did earlier this year), all of his opponents will attack him during the debates. Only Romney managed to survive the vetting process, and now it will be Gingrich's turn.

Tuesday, November 22, 2011

Who Won the Republican Debate on November 22nd?

Tonight's debate was a split decision: Newt Gingrich decisively won the first half, and Mitt Romney just as decisively won the second half.

The debate focused on national security and foreign policy. That's favorable turf for candidates like Romney and (especially) Gingrich, and unfavorable turf for Herman Cain. Cain did not make any big gaffes, but he often seemed on the verge of doing so. By contrast, Gingrich was right at home, particularly during the first half of the debate. Gingrich opened the debate by blasting Ron Paul, who said that terrorism should be treated as a criminal matter because it worked in the case of Timothy McVeigh. To great applause, Gingrich countered that McVeigh's terrorist attack succeeded, and that he would rather stop the attacks from occurring in the first place.

Rick Perry, Michele Bachmann, and Rick Santorum all avoided major gaffes as well. But they seemed to be increasingly irrelevant to the conversation. Months ago, Perry would have been lucky to have delivered an unremarkable performance, because at least it wouldn't have been a bad one. But now, so deep in the hole he made for himself, such a performance won't do. Perry is lost.

During the first half of the debate, Romney couldn't match Gingrich. At one point, Romney and Jon Huntsman argued about the level of troops in Afghanistan. It was a draw, but arguing with a low-polling candidate is only useful if you obliterate him. By engaging with Huntsman, Romney only raised Huntsman's profile. Overall, Huntsman did well, but his long-awaited improvement in debate has come too late. Huntsman just doesn't have enough time left to build up steam.

During the second half of the debate, the dynamic seemed to shift. Romney gave stronger answers, and Gingrich, though he still did well, began to show signs of vulnerability. When asked about illegal immigration, Gingrich gave an answer that suggested making illegal immigrants "legal" under certain circumstances, such as if they had lived in America for a long time, were members of a church, or had ties to their local community. Bachmann seemed perplexed by Gingrich's apparently (and suddenly) soft stance on illegal immigration.

At that point, Romney jumped into the fray. He emphasized his support for legal immigration, particularly for highly-skilled and highly-educated immigrants, such as those who earn advanced engineering degrees in the United States. Romney then suggested that it was important to halt illegal immigration by not creating "magnets" for it. When the moderator asked if that was what Gingrich was doing, Romney avoided addressing the specifics of Gingrich's plan and said that any widescale plan to make illegal immigrants "legal" would amount to amnesty, and it would be a step in the wrong direction. Gingrich did not appear to know how to defend himself.

It was the only time in the debate in which Gingrich and Romney tangled. It was not a heated exchange by any means, but it has the potential to harm Gingrich. Time will tell whether Bachmann, Romney, and other candidates call Gingrich's stance on illegal immigration into question. Recall that Perry's perceived softness on illegal immigration helped doom his candidacy.

Aside from that issue, Gingrich performed well, and he is likely to further bleed support from Cain. The question is whether the Tea Party will accept Gingrich after taking a closer look at his platform.

Monday, November 21, 2011

Republican Primary Debate on CNN Tuesday

The debates keep on coming. CNN will host a debate tomorrow at 8:00pm Eastern. The debate is being advertised as focused on "foreign policy and national security," which is interesting because the previous debate was solely about foreign policy. Judging by that last debate, most of the candidates differ little on foreign policy. On the other hand, the "national security" hook may bring in the subject of illegal immigration, a topic that ignited sparks during the September debates.

The key change that has taken place since the last debate is the shift in perceptions of Herman Cain and Newt Gingrich. The media narrative is that of an ascendant Gingrich and a declining Cain. Unfortunately for Cain, if the debate does focus on national security and foreign policy, it will not be a great opportunity for him. Cain has tended to make gaffes on foreign policy that reveal his lack of basic knowledge about the topic. Meanwhile, Gingrich can speak intelligently on any subject.

Since the candidates disagree so little on foreign policy and national security, and since the candidates' vulnerabilities are on other matters, it will be tricky for low-polling candidates to go on the attack. Last time, they really didn't do it at all. For people like Michele Bachmann, Rick Santorum, and Rick Perry, it's necessary to do damage to the frontrunners to shake things up. Otherwise, they'll simply drift peaceably toward failure.

The one big event that every political observer would like to see is a proper debate between frontrunners Gingrich and Mitt Romney. Gingrich has always avoided tangling with his opponents. No one has ever had reason to attack him before, since he was nowhere in the polls. With the exception of the Perry boom in early September, Romney has never felt threatened enough to go on the offensive. After watching so many candidates self-destruct, Romney is probably even less inclined to attack anyone. Thus, we might have an odd dynamic where Romney and Gingrich are spliting the electorate but remaining passive. That's basically what we saw with Romney and Cain: Romney waited Cain out.

For candidates eager to score some easy points, Ron Paul is an ever-ready punching bag. Paul's opponents may have a contest to see who can show the most righteous indignation when Paul blames America for its foreign policy woes.

Saturday, November 19, 2011

Is Newt Gingrich Electable?

In the Elephant Watcher profiles of the Republican candidates, each candidate's perceived electability has been ranked on a scale of 1 to 3. Those rated with a "1" are considered by most voters to be unelectable--virtually incapable of winning a general election. Michele Bachmann, Herman Cain, and Ron Paul are in that category. Those rated a "3" are generally considered electable, with a decent chance of winning a general election. Several candidates in that category either declined to run or withdrew, leaving only Jon Huntsman and Mitt Romney. Finally, there are the candidates who fall somewhere in between.

Newt Gingrich is not a totally implausible candidate, having been a Speaker of the U.S. House of Representatives; he also possess rhetorical skill and policy knowledge. But he also possesses considerable political and personal baggage, and few outside the Republican Party actually have a favorable opinion of the man.

Then there are the poll numbers. The following are the last two months' worth of match-up polls pitting Gingrich against Barack Obama. It's not pretty:

Gingrich vs. Obama
11/15 Gingrich 41, Obama 46 (-05) -- Fox News
11/13 Gingrich 45, Obama 53 (-08) -- CNN
11/14 Gingrich 42, Obama 54 (-12) -- Pew Research
11/13 Gingrich 43, Obama 49 (-06) -- PPP (D)
11/12 Gingrich 38, Obama 50 (-12) -- Rasmussen
11/10 Gingrich 45, Obama 47 (-02) -- McClatchy/Marist
11/04 Gingrich 38, Obama 44 (-06) -- Rasmussen
10/31 Gingrich 37, Obama 52 (-15) -- Quinnipiac
10/13 Gingrich 34, Obama 49 (-15) -- Rasmussen
10/10 Gingrich 39, Obama 50 (-11) -- PPP (D)

In all ten polls, Gingrich trails Obama. In half of these, he trails Obama by more than ten points. In only one does Gingrich manage to get less than 5 points behind Obama. In half the polls, Obama reaches the critical 50% level; Gingrich fails to even break 40% in half. On average, Gingrich is about 10 points behind.

Do these polls mean anything? There are a few things to consider. First, like any national poll, they suffer from the fact that only a slice of the electorate is paying any attention to the Republican primary. Gingrich's numbers have improved where he has campaigned. His debate performances have improved viewers' opinions of him. Thus, by the time election day 2012 rolls around, Gingrich's numbers would improve considerably. Moreover, when a candidate actually wins the nomination of his party, his numbers increase. Being a winner and having your party coalesce around you will add several points.

But there is also bad news. Although it's true that Gingrich's "positives" are not all priced into those numbers, there are also a lot of "negatives" that haven't been priced in yet. Gingrich has not been vetted either by his opponents in the primary or his opponents on the left. Once Gingrich has absorbed all the damage from the Republican primary and the general election, his numbers will go down.

Where does that leave us, with Gingrich's numbers likely to go both up and down? There would probably be a net benefit, which is to say that Gingrich is unlikely to lose to Obama by 10 points. One might estimate that Gingrich would start from behind by, say, 5 points. He would need to use every ounce of his skill to defeat Obama. In other words, Gingrich could win or he could lose. In a future post, we will examine the electability of Romney, who has the highest perceived electability of any of the candidates. If Gingrich is to win the nomination, he must show the voters that he has something valuable enough that they're willing to risk a greater chance of Obama's reelection, to see Gingrich--rather than Romney--in the White House.

Friday, November 18, 2011

Did Mad Magazine Accidentally Predict Newt Gingrich's Unlikely Future?

Now for something completely different.

Newt Gingrich's recent rise in the polls defied the expectations of most political observers, who declared Gingrich's candidacy dead in the water after its rocky start in May. In July, Elephant Watcher correctly predicted that Gingrich's poll numbers would stay down in the summer and then rise during the autumn of 2011. However, Elephant Watcher also predicted that Gingrich's numbers will then fall when he comes under scrutiny.

Still, the fact that Gingrich is now considered among the frontrunners is a remarkable turnaround. Such unlikely transformations reflect the unpredictable nature of the political world. As an illustration, consider the following cartoon from Mad Magazine. Mad is a long-running humor magazine founded in the 1950s. One of its recurring features was to draw a tombstone for a celebrity, with the odds of various causes of death included. Each "death" scenario is intended to poke fun at some aspect of the celebrity's persona.

Here is Gingrich's tombstone, from the August 1998 issue of Mad:

The three unlikeliest events, with odds of millions or billions to one, are ironic in hindsight. In the wake of the Monica Lewinsky scandal, the artist jokes that Gingrich's interns would never sleep with him (unlike the ostensibly charming and attractive Bill Clinton). Unbeknownst to the general public, Gingrich was in fact carrying on his own affair with a Congressional staffer at the time (she is currently married to Gingrich).

The cartoon also references the ethics charges pending against Gingrich. In fact, Gingrich was exonerated. Eighty-four ethics charges were filed against Gingrich, eighty-three of which were later dropped. The remaining charge involved running a college course out of a tax-exempt organization; this would have violated tax law if the course were deemed a political purpose. The IRS later ruled that there was no violation.

Finally, the cartoon jokes about Gingrich's fall from grace in the Republican Party, with heavy odds against his ever winning the Republican nomination for president in the future. Gingrich is still a long-shot, but one never knows...

Wednesday, November 16, 2011

The Myth of Mitt Romney's 25-Point Ceiling

Although most political analysts (and polled Americans) agree that Mitt Romney will win the Republican nomination, it's increasingly become the conventional wisdom that Romney suffers from a ceiling of 25% of the Republican electorate. The idea is that Romney has been unable to break out in the national primary polls, and has consistently polled at or below 25%. Meanwhile, the other 75% has been desperately looking for an Anti-Romney and won't support Romney under any circumstances.

It's true that the national primary polls have consistently put Romney in the low-to-mid 20s, with Romney rarely polling above 25%. But is there any truth to the idea that there is a uniquely anti-Romney ceiling of 25% that prevents him from getting votes from the other three-quarters of Republicans? Not really. The concept is flawed for a number of reasons.

Perhaps the most important flaw in the 25% ceiling is that Romney regularly polls well above 25% in early state primary polls. As we've discussed at length in the past, polls in the early states are far more important than national primary polls: The voters in early states pay attention sooner, the candidates actually campaign there, and the results of the early state contests influence the electorate in the later states.

The New Hampshire primary polls always have Romney far above the 25% ceiling. Romney tends to poll about 40% in New Hampshire, regardless of the pollster, and across a long period of time. Indeed, Romney rarely gets below 35% in any of these polls. No other candidate has gotten such high numbers in any state.

The counterargument is that New Hampshire is unique. But there are only a few states in which the candidates are actually competing: Iowa, New Hampshire, South Carolina, Florida, and Nevada. For the most part, the candidates are currently focusing on just Iowa and New Hampshire. To suggest that New Hampshire doesn't count is effectively tossing out half the field for little or no reason. More likely, the reason that Romney does so well in New Hampshire is not that New Hampshire is so unique, but because it's the only state in which Romney has really campaigned.

The Florida primary polls have also repeatedly given Romney above 25%, particularly in October. There's been little polling in Nevada, but Romney likely gets more than his "ceiling" in that state as well.

The second big flaw in the theory is the fact that the other candidates have failed to break 25% in the national primary polls. Only Rick Perry, who enjoyed a brief honeymoon in September, managed to break 25% in the polls for awhile. If none of the other candidates can break 25%, why would Romney be the one who suffers from a ceiling? Wouldn't all of the other candidates have the same Anti-Candidate problem with 75% of the electorate?

The third problem with the ceiling theory is that it doesn't account for how difficult it is to poll more than 25% of the electorate in a multi-candidate race--especially when you throw in a large percentage of undecided voters who don't select any of the candidates. If, say, 20% of those polled are undecided, one needs to get 3/8 of the remainder to poll at a mere 30%. It's not easy to get 3/8 when there are eight candidates in the race. Getting that high essentially means you win, unless it's a two-man race.

After the first few primaries, the field will be whittled down to two or three (or perhaps one) candidates. Voters will then coalesce around the survivors and push them above 25%. The Anti-Romney vote will coalesce, but so will the Anti-Anti-Romney vote. (Which is to say, for example, if Newt Gingrich won Iowa, the Anti-Gingrich vote would coalesce around Romney in the same way that the Anti-Romney vote coalesces around Gingrich.)

Having debunked the myth of the 25% ceiling, it's also worth pointing out a historical trend: As voting day approaches, voters tend to move toward a more electable choice, even if the candidate is less exciting. Viewing the current field, the only candidate in the running who's considered very electable is Mitt Romney. His current numbers in New Hampshire guarantee him victory there, and the "strategic shift" will likely boost his numbers in Iowa, as well.

Monday, November 14, 2011

Intrade Odds: Newt Gingrich Up, Rick Perry Down

We last examined the Intrade market on the 2012 Republican nomination shortly before the two mid-November debates. In today's update, we'll see how the debates have altered the Intrade market's perception of the race.

As far as the frontrunner is concerned, the debates had no impact. Mitt Romney dominated the field before, and his numbers are unchanged. Romney stands atop the field at 69.6%. By contrast, the lesser candidates have been shuffled. The big change is that Rick Perry, who has been on a decline since he first participated in a debate in September, has finally been ground into dust. Before the debates, he stood at 40%. After the September debates, he dropped to 20%. He slid down to 10% as it became clear he would not recover in October. Now, after Perry's gaffe at the November 9th debate, he has lost nearly all of his support. Perry is currently trading at 3.7%.

Newt Gingrich rose at Perry's expense. He now stands at 14.3%. Just a month ago, he was in the low single-digits; now he's in second place, albeit a very distant second. Herman Cain has slid to 4.0%. That's not much of a drop considering the sexual harassment scandal, but Intrade has always been very skeptical of unconventional candidates like Cain. Still, it's interesting to see that Perry is now behind both Gingrich and Cain. Also in the mire of the three percent range are Ron Paul and Jon Huntsman, at 3.2% and 3.1%. Michele Bachmann has long since been pronounced dead, and she trades at 1.0%. Rick Santorum--who may be okay on paper--is nowhere in the polls, so he is at 0.4%.

The Iowa Caucus market has changed more dramatically. While Romney is still at about 40%, Gingrich is now in second at 21%. Cain has fallen to 15.2%, and Perry is at 7.5%. This reflects the fact that the Intrade market believes someone has to have a chance of beating Romney in Iowa. If it's not Cain or Perry anymore, and if it's not Bachmann or Santorum, that leaves Gingrich. This is despite the fact that Gingrich has not done well in Iowa polls (aside from an outlier or two).

The New Hampshire market still says Romney has it in the bag. South Carolina has behaved like Iowa, with Gingrich picking up Cain and Perry's slack. The Florida Intrade market is still traded too little to be efficient, but Romney has catapulted to 65% there. The Nevada market looks like the New Hampshire one, with Romney dominating.

Saturday, November 12, 2011

Who Won the Republican Debate on November 12th?

Tonight's debate on foreign policy had few fireworks or major gaffes. The candidates did not attack each other and normally did not even challenge each other. If it is remembered at, it will be remembered for a few general impressions: Rick Perry was shaky, Herman Cain was shakier, Mitt Romney was decent, and Newt Gingrich did well.

The format of the debate was a bit odd: Only the first hour was televised on all CBS stations; the last half-hour was streamed on the internet. The entire debate was focused on foreign policy questions. The economy and other traditional areas of debate (e.g. social policy, candidate vulnerabilities, etc.) were not addressed. At the very least, this allowed Cain to avoid being asked about his sexual harassment scandal, which would have been off-topic.

The candidates avoided making gaffes of the kind that would be replayed over and over. In general, Cain seemed uncertain, as he has little knowledge of foreign policy. Perry avoided any dynamite gaffes, but spoke in a halting manner. Bizarrely, Perry addressed some of his answers to "Mitt," even though Romney was not asked the same question or involved in any way in the exchange. As Elephant Watcher predicted, Perry made a couple jokes about the infamous Rick Perry gaffe at the November 9th debate.

Occasionally the candidates did disagree with each other. Jon Huntsman and Ron Paul marginalized themselves as the two "doves" on the stage. Meanwhile, Huntsman and Rick Santorum both complained about receiving few questions, though the questions were evenly distributed. This kind of whining is counter-productive. It is up to the candidates to make the best use of their questions, even if they are limited (as Mike Huckabee's were in the early debates in the last primary season). Santorum undermined himself, as otherwise his answers were strong.

Newt Gingrich performed the best out of the candidates. He repeated his strategy of criticizing the questions he was asked, though he toned it down a bit and appeared less grouchy than the previous debate. He appeared to have the most thorough understanding of the topics. He received the most applause.

The candidates will not have another debate for some time, and this one demonstrated Gingrich's superiority to Cain. If Gingrich rises at the expense of Cain, debates like these will accelerate it.

Friday, November 11, 2011

Republican Primary Debate Tomorrow on CBS

Just a few days after their last appearance, the Republican candidates will return to the debate stage tomorrow evening. The debate will be sponsored by CBS and will air on the network at 8:00pm Eastern. The candidates will get a reprieve after that--the next debate shouldn't take place for another couple weeks.

As with the two closely-scheduled debates in October, tomorrow's debate will serve as a rematch. Rick Perry will desperately want to rehabilitate himself after his disastrous performance at the Republican debate on November the ninth. Herman Cain will probably face questions about his sexual harassment scandal again. And the minor candidates will have a chance to rethink their strategy of not challenging the frontrunners.

Perry will probably have some prepared joke about his gaffe at the last debate. But there is no recovering from the mistake he made. Perry's only hope is to fly under the radar and hope the frontrunners destroy themselves. He could try criticizing the candidates who lead him in the polls, but he may as well avoid embarrassing himself.

Newt Gingrich has advanced toward the top tier, but he is not there yet; the polls show Cain and Mitt Romney with a comfortable lead over Gingrich. To break through, Gingrich needs to challenge one or both of them. While he has gotten applause in the past by attacking the debate moderators, the act is wearing thin. He risks getting a reputation for needless grouchiness.

As for Cain, the debate moderators have their work cut out for them. Since the sexual harassment scandal has been the biggest news of the month, they have a journalistic responsibility to ask him about it. But the moderators at the last debate were shouted down by the crowd. The moderators will need to find some clever new approach. It's difficult to imagine the audience behaving any differently than they did at the last debate, however. If they really want to take Cain down a peg, they should ask him about subjects he's unfamiliar with--almost everything other than "9-9-9." Speaking of which, Cain's charisma has carried him thus far, but he must avoid answering every question with a reference to his "9-9-9" plan.

There is little incentive for Romney to attack Cain or Gingrich. He should attempt to appear presidential, no matter how much he is challenged. With any luck, he will be able to avoid drawing fire: Both Cain and Gingrich dislike going on the offensive, and the rest of the field (barring Jon Huntsman) needs to take votes from Cain to win Iowa.

Michele Bachmann and Rick Santorum need to do what they have thus far failed even to attempt: attack Cain's conservative credentials. They criticized Cain's "9-9-9" plan in October, but they never questioned whether Cain is the true, pure conservative that the Tea Party demands. They won't beat Cain on charisma, and Bachmann certainly can't beat Cain on electability. Santorum would have difficulty making the electability case, since Tea Partiers have rejected the concept so far (otherwise they wouldn't be supporting Cain). The only remaining option is to prove that Cain is not a true Tea Partier. As time goes on, that's a more difficult sell. It's easier to attack Gingrich on that score, but leapfrogging him almost seems pointless. Time is running out, and they need to eliminate Cain sooner rather than later.

Wednesday, November 9, 2011

Who Won the Republican Debate on November 9th?

Tonight's debate was very civil, with the candidates unwilling to attack each other and with the audience applauding almost every answer. In some ways, the debate preserved the status quo: Without candidates engaging each other, it is difficult to shake things up. Since Mitt Romney is the frontrunner, preserving the status quo is to his benefit.

Most of the candidates performed well. Rick Perry was the exception. In the most disastrous moment of any debate, Perry found himself unable to remember which federal agency he wanted to eliminate. He was able to name the first two, and then halted when trying to name the third. It is difficult to describe in words just how awkward this became. Even when prompted by his fellow candidates, Perry was unable to remember the third agency. The moderators incredulously asked Perry if he could not remember. Finally, Perry had to admit that he had no idea what it was. Perry only recalled the agency's name later on in the debate, when answering another question. But Perry's spectacular failure will undoubtedly be replayed endlessly on television. It feeds into every negative narrative that already exists about Perry. It may well be the final set of nails in Perry's coffin. It could become one of the most famous debate moments in American history--unless Perry does even worse in a future debate.

Herman Cain succeeded in remaining his usual charismatic self. When the debate moderators attempted to bring up the sexual harassment scandal, the audience booed. When the moderators asked Romney what he thought of the scandal, he wisely refused to play along. The audience cheered when the moderators changed the topic back to the economy. It's clear that most Republicans still do not believe there is any truth to the accusations against Cain. Rather than shifting to a "fall of Cain" narrative, the media may be forced to admit that Cain appears to be riding out the storm. However, what the audience at a Republican debate feels publicly and what the Republican voters actually feel as time goes on are two different things.

Newt Gingrich was expected by many political observers to have another good debate performance. While Gingrich gave good answers, he did not stand out among the other candidates, who also (generally) gave good answers. Gingrich was, once again, unwilling to challenge his opponents. Gingrich also repeated his longstanding habit of criticizing the moderators for their questions. He was unusually grumpy toward them during this debate.

Rick Santorum and Michele Bachmann did well, but they did not have any means of knocking down a candidate leading them in the polls. They must hope that Perry's self-destruction helps them, but it may well send voters toward Cain or Gingrich by default. Meanwhile, Romney remains at the top of the pack.

Tuesday, November 8, 2011

Republican Debate Tomorrow on CNBC

The first Republican primary debate of the month will be held tomorrow evening at 8:00pm Eastern. The debate will be aired on CNBC and is expected to focus on the economy. Tomorrow's debate will put an end to the three-week break in debates that the candidates have enjoyed since the debate on October 18th.

Things have changed during the intervening weeks. Mitt Romney and Herman Cain have consistently appeared at the top of the polls, with the rest of the candidates far behind. Rick Perry and Michele Bachmann have solidified their positions as second-tier candidates, and hope is running out. Meanwhile, Newt Gingrich has moved up in the polls to at least be at the top of the second tier. Despite the polls, Cain has suffered terrible press from the sexual harassment scandal and is looking vulnerable. The scandal has only intensified in recent days. As Elephant Watcher anticipated, damaging new details have come forth just before the debate.

At the time of the October debates, the other Tea Party candidates could at least pretend that Cain wasn't really beating them in the polls. After weeks of new polls and media coverage reinforcing the idea that Cain is at the top, the other Tea Party candidates can deny it no longer. Perry, Bachmann, and Rick Santorum must view Cain as their chief opponent. Now, with the Cain scandal making headlines every day, it's time to strike. They must attack Cain and eliminate him in order to compete for the Anti-Romney position.

For Cain's part, he will have to find a way to deal with the elephant in the living room. The debate moderators, even if they focus on the economy, must surely ask Cain about the scandal. (This will be true at the upcoming debates as well.) Most likely, Cain will refuse to address the matter further and say he wants to get back to focusing on the issues that Americans really care about. He will receive loud applause from a Republican base that simply does not believe the accusations are true (yet).

Even so, political observers will be watching for any sign that Cain has been shaken or weakened by the scandal. The next media narrative will be the fall of Cain, so Cain must be his usual upbeat, charismatic self if he is to avoid negative coverage.

In theory, Romney can continue to play the role of the already-victorious general election candidate and stay above the fray. But in the past, rivals (particularly Perry) have ignored Cain and focused their attacks on Romney. If they believe Cain is bound to fall anyway due to the scandal, they may focus on Romney even now. Romney should avoid letting others see his feathers ruffled as they were at the last debate. If Romney appears the most presidential, it will be counted as a win.

Gingrich has the biggest strategic decision to make. So far, he has avoided attacking other candidates. Finally, he is going up in the polls. But that's because other candidates have gone down. And he is still in the second tier. For several months, Elephant Watcher has argued that Gingrich's performance in the debates should be more aggressive and focused on demonstrating why he should get the nominee rather than someone else. If Gingrich only acts as a cheerleader who says everyone on the stage would be better than Barack Obama, then voters will simply go to Romney (who has the best chance of winning a general election). Having seen his numbers rise, Gingrich may decide it's time to truly engage in a debate against his opponents. If so, it will be his first real test in a debate.

Monday, November 7, 2011

Intrade Odds: Newt Gingrich Rising, Slightly

Since our last look at the Intrade market on the 2012 Republican nomination nearly a month ago, Mitt Romney has maintained his dominant position. Romney is currently trading at 69.4%, and the man in second place--Rick Perry--is at 9.9%. The two leading candidates are at the same place they were last time, but that's to Romney's advantage: It's less than two months until the voting begins. If you're not in first place, less time means fewer opportunities to change things. Romney is happy to see the clock run out.

Only one other candidate is above 5% now. Newt Gingrich has risen to 8%. Previously, Gingrich had tended to trade at 1-3%. Gingrich's modest rise in the national primary polls is responsible for the change. Gingrich is actually now beating Herman Cain in the Intrade odds. This is interesting because Cain is doing much, much better in the polls than Gingrich or Perry. Indeed, Cain is ahead of Romney in many polls. It's apparent that Intrade investors are willing to look far beyond today's poll numbers--at least where Cain is concerned. As Elephant Watcher has repeated over the months, Intrade investors tend to view politics from an establishment perspective. Cain is an outsider to say the least, so Intrade investors put little stock in him. But Cain was trading a bit higher before the sexual harassment scandal hit the headlines. Cain fell to 4.7% by this morning, and after news broke of another accuser against Cain, he quickly fell to 2.4%.

Meanwhile, Intrade investors are fairly bullish about Romney's chance to win the Iowa Caucus. They give him a 40% chance of doing so, while Cain registers 17.5% and Perry is at 12.5%. Once again, the investors are looking beyond the poll numbers to give Romney such an advantage over Cain. Naturally, if they believe Romney has a 40% chance of winning Iowa, he dominates in the overall odds of winning the nomination.

In the market on the New Hampshire Primary, Intrade investors rate Romney at about 90% to win. That's a fairly straightforward reading of the New Hampshire Primary polls, all of which have Romney in the lead by a comfortable margin. Meanwhile, the markets for the South Carolina and Florida primaries have Romney in first at 50% each. Romney should be weaker in South Carolina than in Florida, especially given Romney's odds of winning the overall nomination, so that points to some market inefficiency in the Florida market.

In summary, Intrade investors are dismissive of Cain's good poll numbers and are very skeptical about his candidacy. They essentially mirror Elephant Watcher's calculation of Romney and Cain's odds of winning the Republican 2012 nomination. The race isn't over, but the end is near.

Saturday, November 5, 2011

Who Will Win the New Hampshire Primary in 2012?

Today we continue our series on the early primary states. A few days ago, we took an updated look at who will win the Iowa Caucus. The next state is New Hampshire, which recently confirmed it will hold its primary on January 10, 2012.

There are far fewer candidates who are competitive in New Hampshire than in Iowa. Back in July, when we first considered who will win the New Hampshire primary, there were more options. But Chris Christie declined to run and Tim Pawlenty dropped out. Either of those men, had they won Iowa, would have then become very competitive (or favored) to win New Hampshire. Jon Huntsman, while still probably enjoying a good reputation in New Hampshire, has completely failed to get out of Mitt Romney's shadow. At the same time, Romney has proven to be a more formidable candidate than he first appeared. The only scenario remaining is that Romney holds his lead and wins New Hampshire.

The latest New Hampshire polls reinforce the impression:

New Hampshire Primary
10/25 Rasmussen -- Romney 41, Cain 17, Paul 11, Gingrich 8
10/25 CNN/Time -- Romney 40, Cain 13, Paul 12, Huntsman 6
10/16 Insider Adv -- Romney 39, Cain 24, Paul 11, Huntsman 5
10/13 Magellan (R) -- Romney 41, Cain 20, Paul 10, Huntsman 6

With remarkable consistency, all of the pollsters have Romney at about 40%. In a race with so many participants, a candidate polling at 40% is guaranteed victory. These aren't the first good polls for Romney, either: Every single New Hampshire poll taken this year has shown Romney in the lead. After 22 polls, Romney has to be feeling pretty comfortable. His margin over second place has also been consistently large: Romney has been in the mid-30s to upper 40s in each poll, and no other candidate has reached 30%. Herman Cain has barely broken into the 20s (later falling into the 10s), and that is as high any other candidate has gotten.

If Romney wins Iowa, he will sweep to victory. What if someone else wins Iowa? The only other candidates who could win Iowa have issues with poor perceived electability. The Iowa winner will get a bump in New Hampshire, but Romney will get a bump from people concerned about nominating a winner. For example, if Cain won Iowa, the anti-Romney vote would coalesce around Cain. But the anti-Cain vote would coalesce around Romney.

Thus, Romney has a bit of a failsafe: If someone else wins Iowa, the "strategic panic" voters feel would give Romney a bump to counteract the bump that the Iowa winner gets. Romney is therefore guaranteed to win New Hampshire, and the only question is his margin of victory. Romney will be under pressure to have a pretty big win. He will still be putting resources into New Hampshire to make sure the margin is convincing, but he will be increasingly tempted to go for a win in Iowa and settle the matter early.

Thursday, November 3, 2011

How Much Will the Sexual Harassment Scandal Hurt Herman Cain?

Earlier this week, news reports surfaced about Herman Cain having been accused of sexual harassment in the late '90s. Thus far, the reports are that the National Restaurant Association--where Cain worked at the time--settled cases with two female employees who had accused Cain in separate incidents. Cain's campaign responded by saying that the accusations had been false, and that Cain was either unaware of or uninvolved with the settlement agreements. The identity of the women in question remains undisclosed, and the women have not come forward due to confidentiality agreements (and likely an unwillingness to enter the public spotlight).

Cain's campaign then accused Rick Perry's campaign of having leaked the reports to the media. Perry's campaign denied it, attempting to shift the blame to Mitt Romney's campaign (which also denied involvement). Meanwhile, conservative media largely defended Cain, suggesting the charges were false or exaggerated, and that the liberal media was trying to attack Cain unfairly.

How much will the scandal hurt Cain? A scandal can harm a candidate in one of two ways. A severe scandal may undermine a candidate's strengths, calling into question the basis for the candidate's appeal. A scandal can also contribute to known weaknesses of a candidate, reinforcing a negative perception that already exists about him.

The present scandal, if severe enough, could harm Cain's candidacy in both ways. Cain's strengths are his conservatism and charisma. If people believe Cain is guilty of sexual harassment, it tarnishes the image people have of his personality. The second way it could harm Cain is by contributing to a preexisting perception that Cain is unelectable. Whether the scandal is severe or mild, it adds more weight to the argument that Cain should not win the nomination because he will lose the general election against Barack Obama.

There have been few polls taken since the news broke, but those that have been taken do not show any signs of Cain suffering damage from this scandal. Polls suggest that, for now, Republicans generally do not believe that Cain was guilty of sexual harassment. They believe that the charges were trumped up and that Cain is simply the victim of an attack by the liberal media. If new details or evidence surface, and people believe the accusations were well-founded, then Cain will suffer much heavier damage.

To some extent, the damage may be less than it will appear in the future. A few weeks ago, Elephant Watcher explained why Herman Cain will not win the Republican nomination. Cain's poll numbers were already likely to fall in the near future, even before news of the scandal broke. As Cain's numbers fall, observers may incorrectly attribute all of Cain's decline to the scandal.

Regardless, Cain will be on "damage control" for the near future. There are two primary debates scheduled to take place next week, and Cain will almost certainly be asked about the scandal. If damaging new information surfaces prior to those debates, Cain will be trapped in the media spotlight and forced to answer questions he would rather ignore.

Tuesday, November 1, 2011

2012 Republican Primary in Review: October 2011

Each month, Elephant Watcher recaps the activity that occurred in the Republican primary during the previous month. Follow these links to read earlier recaps: May, June, July, August, September.

Some very important developments took place at the very beginning of October. First, the field became completely settled as the remaining potential candidates announced they would not run: Chris Christie on October 4th and Sarah Palin on the 5th. Second, the Republican Party in Florida broke the national Republican Party's rules by pushing its primary up to January 31st. This caused all of the early primary states to push their dates forward as well. The result was that an entire month of the pre-Iowa primary season was eliminated. Instead of October opening with four months until Iowa, it was down to three.

The most important development that took place at the beginning of the month was that Christie officially declared he would not run. This shifted the entire balance of the race. Christie was the candidate most likely to win, since he had the unique ability to attract both establishment Republicans and Tea Partiers. Rather than entering the race and filling the vacuum, Christie's refusal to run made the void permanent: Republicans would never be satisfied with the field for 2012. Instead, they would search for the "least bad option."

But Christie was also the final obstacle in Mitt Romney's path to win the nomination. Mike Huckabee promised a populist, Southern, Evangelical alternative to Romney, but he did not run. Mitch Daniels and Tim Pawlenty both had the ability to serve as conservative "consensus candidates" who could satisfy (if not excite) both wings of the Republican Party. Daniels didn't run, and Pawlenty left the race prematurely. With Christie out, there were no longer any highly electable candidates in the race besides Romney (and Jon Huntsman, perpetually left in Romney's shadow).

With Romney a lock to win New Hampshire and the establishment wing of the Party, and with the rest of the field either unelectable or lacking conservative credentials of their own, Romney was set to win by default. On October 5th, Elephant Watcher was able to project that Mitt Romney would win the Republican 2012 presidential nomination.

The rest of October was marked by the continued slide of Rick Perry and Michele Bachmann, and the rise of Herman Cain. Perry, who had led the polls just a month earlier, sunk to fourth, fifth, and even sixth place in Iowa polls. Bachmann, who led during the summer, was essentially tied with Perry in single-digits in the state. But Cain rose to the top of both the Iowa polls and national primary polls.

Perry and Bachmann's crash also created an opening for Romney, who led or tied with Cain in later Iowa polls. Before October, Romney placed all of his resources in New Hampshire. Now, Romney's 2008 dream of a knocking out his competitors with a one-two punch in Iowa and New Hampshire looks like a realistic possibility--perhaps even a probability.

The two debates in October cemented Bachmann and Perry's status as second-tier candidates. Cain and Romney were resilient. But by the end of October, Cain was beginning to show signs of weakness. Unlike Romney and the previously-crashed candidates, Cain had never been challenged or vetted in any way. Under heavier scrutiny, Cain made a series of low-impact gaffes. His "9-9-9" tax plan became less popular the more people looked into it, prompting Cain to rethink the idea. And as October came to a close, a sexual harassment scandal from Cain's past came to light, with inconclusive results. Anti-Romney voters already cast about once more for alternatives, like Newt Gingrich, who was rising but still low in the polls.

In summary, October was the month in which Romney--lucky so far--saw his path to the nomination open completely. Since voters will become even more focused on electability as Iowa approaches, and since there are no conservative alternatives who are highly electable, Romney has likely triumphed. The nomination is his to lose. Elephant Watcher calculates that Romney's odds of winning the Republican nomination are currently 65%.