The Bain Analysis of Romney's Campaign

Romney

When Mitt Romney worked at Bain & Company, the consulting firm where he started his career, he was taught to examine companies in a particular manner. Bain consultants studied failing companies by accumulating a very large amount of data, and then formulated ideas for how improvements could be made. The consultants debated these ideas, always taking care to support their assertions with data. When Romney planned his run for the 2012 Republican presidential nomination, he probably analyzed his failed 2008 run in much the same way that he had examined failed companies. Based on the changes Romney made in 2012, what lessons can we deduce he learned from 2008?

Romney has said that one of his lessons from 2008 was that people didn't have a clear idea of what his message was. In 2012, his basic campaign message was repeated over and over: The election is going to be about jobs and the economy, and his private-sector experience made him the most qualified to turn things around.

If you're going to make a pitch to voters, it's a good idea to make sure the voters know what the pitch is. Romney succeeded; some other candidates succeeded, while others failed. Jon Huntsman and Tim Pawlenty may have been the worst at defining a clear message for their campaigns. Rick Perry did a relatively poor job, and his message was quickly swallowed by his disastrous debate performances. Others, like Newt Gingrich and Rick Santorum, eventually defined themselves, but their messages were unattractive. Gingrich's pitch was that he was the best candidate to debate Barack Obama, but it turned out Gingrich wasn't that good at debates. Santorum wanted to focus on the family and values, but most voters weren't interested. Herman Cain succeeded at getting his "9-9-9" message out, but he went too far, defining himself too narrowly.

Another change Romney made in 2012 was to focus all of his attention on one early state, New Hampshire. In 2008, he spread his resources and attempted to land knock-out blows by doing well in Iowa and New Hampshire, as well as some later contests. Romney was able to get second place in both IA and NH, but it didn't do him much good. He concluded that taking first place was absolutely essential. Among IA, NH, and South Carolina, his choice was obvious: He had to stake everything on NH. He did put some last-minute resources into IA when the opportunity presented itself, but otherwise he ignored the state. It's no use spreading resources if you don't get any real credit for second place.

What about the manner in which Romney conducted his campaign? For those who followed both the 2008 and 2012 Republican primaries, it was apparent that Romney gave better debate performances during his second run. While it should be obvious that debates are important, Romney seems to have put in the extra effort. He may have taken a cue from 2008, when Mike Huckabee vaulted from polling near 0% to taking IA and nearly South Carolina and the nomination. Huckabee had no resources or name recognition, but he did very well in the debates. Others didn't take the debates so seriously: It's been reported that Perry spent almost no time preparing for them, and it showed.

In 2008, the various campaigns treated the primary season like an arms race, spending money long before voters even began paying attention. They had assumed that the primary season would last from early 2007 all the way through early 2008, and they didn't want to be left behind. But they misjudged the voters, most of whom didn't start following the race until 2008. Even the early-state voters didn't take notice until the autumn of 2007, and their engagement really ramped up only by December.

It appears Romney learned that lesson. Rather than blanketing the early states with ads at the beginning of 2011, he ramped up his efforts toward the end of 2011. Most telling was the fact that Romney didn't launch his deluge of negative ads (for which he had become infamous in 2008) until a couple weeks before the Iowa Caucus. He allowed Gingrich to get far ahead in the polls, and then viciously cut him down. By contrast, the Romney of 2008 attacked every candidate who got ahead of him even for a moment, and he made enemies. The Romney of 2012 was perfectly happy to see Cain or Ron Paul or Michele Bachmann do well for awhile, and if they fell of their own weight, he didn't make enemies of them.

The candidate who could have benefited the most from that lesson was Pawlenty. He spent more money than he took in, trying as hard as he could to get traction in early-to-mid 2011. The problem was that voters didn't even notice. Even worse, he spent large sums of money trying to win the Ames straw poll in August. When he failed to win, his campaign was in debt and he decided to drop out--a fatal mistake. Bachmann won Ames, but it turned out Ames didn't matter. In 2008, Romney also spent a lot of money to win the Ames straw poll, and it didn't do him any good, either.

It's conventional wisdom that Republicans always nominate the "next in line." They prefer to nominate the runner-up from the previous primary, it seems (Reagan, Bush Sr., Dole, McCain, Romney). But perhaps the real reason this occurs so frequently is that the candidates learn from the mistakes they made the first time around. In the future, candidates would do well to learn from the mistakes of past candidates, rather than spending time and money making them on their own.

Why Isn't Anyone Attacking Mitt Romney?

Romney

Voting in Iowa begins in less than 100 hours. In the latest Iowa polls, Mitt Romney has crept into the lead, albeit a slight one. As of this entry, Romney leads in six out of the last six Iowa polls. Although Romney has placed first in the occasional Iowa poll this year, the last time Romney consistently held the lead in Iowa was...never. Mike Huckabee held the lead until he declared he wasn't running, after which Michele Bachmann entered the race and took the lead, followed by a seemingly endless procession of Anti-Romneys.

Today, the polls in Iowa are close enough that it's possible for any number of candidates to pull out a win: Romney, Ron Paul, the fading Newt Gingrich, and the rising Rick Santorum. On Wednesday, Elephant Watcher wrote that Santorum was well-positioned to make his long-awaited surge, but that he was running out of time. A few more weeks and Santorum might skyrocket in the polls by gathering together the Evangelical voters like Huckabee did in 2008. New polls were released late Wednesday showing the movement occur: Santorum broke the 10% barrier for the first time and moved into third place with about 15%. This was what Santorum was waiting for all along, but it would have been much more helpful if it happened even a week ago. It's a race against the clock--but Santorum could squeak out a win with a percentage in the 20s, as opposed to Huckabee's 34% win in 2008.

Still, Romney is in the lead, and is the only candidate not being attacked at the moment. Paul is being attacked by Gingrich and others; Gingrich is still receiving some flak from leftover attack ads aimed against him; Bachmann is being called on to drop out early; even late-bloomer Santorum has already been hit by some new attack ads from Rick Perry's campaign. Why is Romney getting a pass?

The answer is that the Anti-Romney candidates are looking past Iowa toward South Carolina now. Even if Romney won Iowa and New Hampshire, Romney has been weak in South Carolina. That's the battleground to determine who gets to play the role of the chief Anti-Romney. While a Romney win in both Iowa and New Hampshire would be devastating to the rest of the candidates, they believe it's survivable--but only the top-ranking Anti-Romneys will survive it. There's still going to be room, because many voters don't want Romney, but those voters will coalesce around one or two Anti-Romneys at most.

By this point, Bachmann and Perry have written off a win in Iowa as impossible. Gingrich is probably getting that sense, too. If they can't win Iowa, their mission is to make sure they don't get beaten by other Anti-Romneys. Perry will be hurt more by losing to Santorum or Paul than by losing to Romney. Few of Perry's voters see Romney as an alternative, but if Santorum beats Perry, they might jump ship because they find Santorum acceptable.

Elephant Watcher believes that if multiple Anti-Romneys are close in Iowa's results, as opposed to one Anti-Romney getting a big win, we could see a similar situation develop in South Carolina. If that happens, the Anti-Romneys will still be fighting amongst themselves to determine who gets to be the alternative to Romney. This would infuriate many Tea Partiers, who will demand to know why Romney isn't being vetted. Meanwhile, Romney would keep his establishment/moderate constituency to himself, left in relative peace. After South Carolina, though, all the guns will be aimed in his direction.

Iowa Remains Divided

The Iowa Caucus is imminent: Voting takes place in less than two weeks. Iowans have had plenty of time to rally around a single candidate. They could have united behind the overall Republican frontrunner, Mitt Romney. If they found Romney unacceptable, they could have united behind a single Anti-Romney, selecting the one they felt was the strongest of the remaining candidates. In 2008, Iowans did precisely that, and they gave Mike Huckabee a big win over Romney. This time, Iowa is divided.

A group of influential Evangelical leaders met in Iowa in an attempt to decide which candidate they would unite behind; they ultimately did not endorse a single candidate. The picture was different four years ago when Huckabee was the obvious choice. Back then, Romney had been leading the polls in Iowa for months--then Huckabee went from a low-polling candidate (like Rick Santorum has been this year) to a mid-level candidate in October. Once Huckabee was a realistic choice, his numbers exploded in the "Huckaboom," launching him past Romney by the end of November. It became a two-man race in Iowa, and Huckabee's lead expanded to double-digits in some polls by mid-December.

In mid-December 2007, Romney unleashed a torrent of attack ads against Huckabee--much as he did against Newt Gingrich in mid-December 2011. Huckabee's numbers dipped, and Romney retook a slight lead in some polls by the end of December. But unlike Gingrich, Huckabee never fell too far, staying around 30%. He recovered, the polls favored him again, and he won Iowa 34% to Romney's 25%.

This time around, Gingrich looked to become the Anti-Romney, but his poll numbers fell from an average of 30 to an average of 15, placing him behind both Romney and Ron Paul. Conservative, mostly Evangelical Anti-Romney forces in Iowa have gravitated to a number of other candidates: Michele Bachmann, Rick Perry, and Rick Santorum are all polling around 10 points each. If the voters supporting those three plus Gingrich concentrated around one candidate, as they did with Huckabee in 2008, Romney would be finished in Iowa.

Why the disunity? As with the Republican field in general, each of the Anti-Romney candidates is flawed. And each one appeals to a different segment of the Evangelical Anti-Romney bloc. For those who care little about electability, Bachmann is a pure policy conservative. For those who demand an established, well-funded, experienced candidate, Perry is the obvious choice. For those spooked by electability concerns and bad debate performances from the previous two, Santorum makes sense. For those who think Santorum just can't win because he's a low-polling nobody, Gingrich is the one with the best chance of out-polling Romney. But Gingrich is ill-suited to play the role of an Evangelical conservative, aside from the fact that his name is not Mitt Romney.

What if Huckabee had run for president again this year? Probably all four of those groups would have lined up behind him, and winning Iowa would have been a breeze. But Huckabee didn't run, so Iowa is divided. Ordinarily, low-polling candidates will lose all support at the very end, as voters strategically coalesce. This year, however, the four Anti-Romneys are each polling just high enough to survive.

Can Rick Santorum Become the Next Mike Huckabee?

Santorum

Since Rick Perry entered the race, the Republican primary has often been described as a two-man race: Mitt Romney vs. Rick Perry. The catastrophic results of Rick Perry's debate performances have yet to be fully measured, but they change the character of the race. But the primary's bipolar nature likely remains (unless Chris Christie announces he's running for president).

From the start, it's been Romney vs. the Anti-Romney candidate. For awhile, Perry seemed to be the obvious Anti-Romney, and the national primary polls suggested he would be a strong Anti-Romney at that. If Perry's collapse is as severe as it seems, the race would be Romney vs. Anti-Romney, with no clear Anti-Romney in sight. Indeed, if no strong candidate could fill the Anti-Romney role, the race might become unipolar: A weak field with Romney a heavy favorite to win.

Primary races tend to abhor a vacuum, however. Rather than allowing the vote to be split evenly among similar candidates, primary voters in early states tend to coalesce. Thus, history suggests that someone will become the Anti-Romney, though the race still may not be that close. If Perry slides out of the Anti-Romney position, it's anyone's guess as to whom the replacement will be.

Aside from Romney, the one candidate who benefited from the most recent debates was Rick Santorum. He was perceived as strong in his attacks against Perry; Michele Bachmann faded. Could Santorum become the next Mike Huckabee, a candidate whose strong debate performances lifted him up from polling 0% to winning Iowa?

At first glance, it looks like Santorum is the only candidate who's conservative and has moderate perceived electability: Bachmann, Cain, and Paul are viewed as unelectable. There are concerns about Gingrich's electability and conservatism. Huntsman's not running in Iowa. Perry is crashing. That only leaves Romney and Santorum.

But there are two reasons to think Santorum will have great difficulty playing the Huckabee role. First, Santorum is no Mike Huckabee. Santorum lacks Huckabee's charm and rhetorical skill. While a genuine social conservative, Santorum is not poised to win Evangelicals like Huckabee, a preacher who was constantly asked to defend his Christian beliefs in the debates.

Second, Santorum faces more rivalry for the right wing in Iowa than Huckabee did. Huckabee's competition was unsuited to win Evangelicals: John McCain, Rudy Giuliani, and Mitt Romney. There was no equivalent of Rick Perry in 2008. Santorum would not only need to beat Romney, but also Perry, as well as Tea Party favorites Bachmann and Cain.

The possibility is there for Santorum, but it's a very difficult road. Santorum would need to prove he can do more than attack and act outraged. He would need many, many strong debate performances. And he has not yet been attacked by any other candidate.

Is Chris Christie Running for President? Part I

Christie

When one considers the various scenarios of how the 2012 Republican primary could turn out, there's one big unknown that looms over it all: Will Chris Christie enter the race? He has been asked the question countless times, and he has been consistent in denying that he intends to run. But he has made a careful point of not denying his intentions in what Elephant Watcher terms a "convincing manner." By contrast: Haley Barbour, Mitch Daniels, Mike Huckabee, and Donald Trump have all exited the race in the appropriate fashion, and have been placed into the "declined to run" category on the Campaign Status page.

To put it another way, Christie has only denied his intentions to run in the same way that Barack Obama denied he would run in 2008, and Rick Perry denied he would run in 2012. Perry changed his mind and is considering a run. Obama changed his mind and is currently president. But while Christie hasn't taken himself out of the race, that doesn't mean he will run. It only means he hasn't decided yet. So will Christie run?

Predicting whether a candidate will run can be a very tricky business. Sometimes the candidate himself doesn't know. Often the decision hinges on personal matters, such as whether the candidate's spouse or children are willing to support him. Earlier this year, Mitch Daniels was considered a strong candidate for president, but he declined to run. Daniels explained that he wanted to run, but his wife and daughters were against it. One might question the logic: If Daniels' wife was so afraid of publicity, why would she allow him to run for governor? Clearly, emotions play a role. Mike Huckabee, who was in an even stronger position to run than Daniels, announced that he would not run, either. He never gave a clear explanation for his decision. He just said that his "heart said 'no.'"

What about using Intrade, which bills itself as "The World's Leading Prediction Market"? On Intrade, investors can take bets on whether candidates will run. From the beginning, Elephant Watcher has cautioned readers that Intrade markets aren't a reliable predictor of election results, for a number of reasons. Intrade markets tend to react to events rather than predicting them.

Intrade investors are relatively certain that Christie won't run. Intrade gives Christie a 10% chance of entering the race. Intrade gave Christie a higher chance last year, before he started making repeated denials. Apparently Intrade investors take Christie at his word.

They also took Rick Perry at his word, until his word changed. Until mid-May, Intrade investors gave Perry a 10% chance of running, just like Christie. When Perry began suggesting he was reconsidering a run, his Intrade market skyrocketed. It now stands at around 75%. Again, that's a reaction rather than a prediction.

Intrade investors fared no better when it came to anticipating that a candidate wouldn't run. Consider the four candidates who were placed into the "declined to run" category. Intrade's predictions? Haley Barbour was given a 70% chance of running until the day he announced he wasn't. Mike Huckabee was given nearly a 60% chance of running until he made a similar announcement. (In January '11, Intrade gave Huckabee an 80% chance.) Donald Trump topped out at over 60% in mid-May, just before he bowed out of the race. As for Mitch Daniels, Intrade priced him at 70% until the day he announced his decision not to run.

We can't read Christie's mind, and neither can Intrade. Are there any factors that can at least assist us in making a prediction about whether Christie will run? We will examine this question in Part II.

Can Michele Bachmann Win Iowa?

The idea that Iowa could play a "wildcard" role in the 2012 Republican primary has become more popular of late. It is increasingly common to hear pundits suggest that a fringe candidate could win Iowa and, potentially, the nomination. The Republican establishment is nervous about the influence of the Tea Party and social conservatives: During the 2010 midterms, Republicans lost some important races (e.g. in Nevada and Delaware) due to the nomination of unelectable Tea Party favorites. Their nightmare is that the same could happen in a presidential race. Some establishment Republicans have even suggested that New Hampshire should be given more priority, as it has (supposedly) more sober-minded voters.

Michele Bachmann, with her ties to Iowa, Tea Party credentials, and low perceived electability make her the subject of the establishment's fears. (In time, similar fears may arise concerning Herman Cain.)

But do Iowans actually have a history of voting for unelectable candidates? Let's consider the winners of the Iowa Caucus since the modern primary system was established in 1980. For the sake of comparison, we will also look at the winners of the New Hampshire primary. Incumbent presidents have been omitted from these lists, as they won almost automatically in each case.

Iowa
1980 -- George Bush Sr.
1988 -- Bob Dole
1996 -- Bob Dole
2000 -- George Bush Jr.
2008 -- Mike Huckabee

As the list reveals, Iowa's adventurous spirit is highly exaggerated. Indeed, many Tea Partiers reviewing the list of winners would say that Iowa is a state full of "RINO"s. Only Huckabee might be seen as a sort of "insurgent" candidate, but even then it's a stretch. Huckabee was a governor for 10 years and was not known for his extreme positions. (In fact, Huckabee was mightily criticized by the Republican establishment for being too moderate on economic issues.) Nor was Huckabee viewed as unelectable. His executive experience and affable, articulate presentation most likely made him more electable than John McCain, who won the nomination that year.

Now let's consider the New Hampshire winners.

New Hampshire
1980 -- Ronald Reagan
1988 -- George Bush Sr.
1996 -- Pat Buchanan
2000 -- John McCain
2008 -- John McCain

Many Tea Partiers view New Hampshire as RINO territory. And several liberal-to-moderate Republicans did win the state. But Buchanan won there in 1996, and in 1980 Reagan--then seen by many Democrats as too extreme to win a general election--placed first.

Thus, the history of Iowa shows that its voters place a high premium on electability, and its winners are not always conservative. It is just as willing as New Hampshire to select a RINO, and perhaps moreso.

That doesn't mean a Tea Partier or a staunch conservative can never win in Iowa. But it does suggest that for Bachmann to stand a chance, she must first improve her perceived electability. Iowa does not have a history of taking risks.

2012 Republican Primary in Review: May 2011

Click here for the Elephant Watcher News archive for the month of May, 2011.

Considering how far away the early primaries are, the month of May '11 was fairly active. The race saw a transition from the first phase to second phase of the campaign, with many--but not all--potential candidates making their intentions official. The field started to take shape, but was still incomplete when June arrived.

A month is a long time in politics. As May began, the two men who dominated the headlines were Donald Trump and Osama bin Laden. Neither man appears very relevant in politics today. As the pundits eventually learned, Elephant Watcher's prediction was correct: Bin Laden's death had no lasting impact, and President Obama's bounce in the polls dissipated rapidly.

In early May, Republican leaders were concerned that Trump's eccentricity would turn the primary into a circus. They also agonized over the weakness of the field, with no one candidate capable of exciting or unifying the Party. Elephant Watcher was skeptical of Trump's chances, owing to Trump's low perceived conservatism and electability. Trump, it seems, came around to Elephant Watcher's point of view: Trump's high numbers in national primary polls were an illusion, so there was no point in his making a run for it. Trump exited the field on May 16th, and the Party breathed a sigh of relief.

However, Elephant Watcher concurred with the Party's concerns about a vacuum in the field, and held to the projection that Chris Christie had the best chance of winning the nomination by making a late entry.

Few candidates attended the primary debate on May 5th, but it provided a platform for Herman Cain, who boosted his visibility. Cain took advantage of the two Tea Party favorites being MIA for the month: Sarah Palin refused to make her intentions known, which also kept Michele Bachmann in limbo. With the two women out of the picture, the Tea Party began to gravitate toward Cain.

The other big story was the series of fortuitous events enhancing Tim Pawlenty's stature. Iowa favorite Mike Huckabee shook up the race by announcing on May 14th that he would not run. On May 22nd, Mitch Daniels followed suit. These departures created an opening in Iowa for Pawlenty as the "electable" alternative to Mitt Romney. Even better, after Newt Gingrich officially entered the race on May 11th, he shot himself in the foot during his first interview. Romney was the victim of similar self-sabotage during his botched attempt to explain Romneycare during a speech on May 12th.

Though Pawlenty's stock rose, he was not able to translate his strong campaign position into a loyal following. He remained low in the polls. Instead of rallying behind Pawlenty, Republicans looked toward candidates not yet in the race. Among the Washington establishment, most of the talk centered around Jon Huntsman, Jr. His stock rapidly increased on Intrade. However, Huntsman did not actually form an exploratory committee or make official plans to join the race--yet. While the establishment spoke of the race as having three "serious" candidates (Romney, Pawlenty, and Huntsman), Huntsman remained an unknown outside the Beltway.

By the end of the month, the vacuum in the field still existed. The consensus only grew that new players needed to join the game. Christie's chances of winning the nomination rose slightly from 60% to 65%.

Time is running out for the remaining candidates. They have only a few more months to convince the voters that the field is already acceptable. Otherwise, the Christie juggernaut may arrive and flatten them all.

Tim Pawlenty, Jon Huntsman Odds Rise on Intrade

Now that Huckabee and Daniels have opted out of the 2012 Republican primary, it's time to check in with Intrade once again to see what it reveals. Though Intrade is not a reliable indicator of the future, it presents us with a picture of the conventional wisdom of the liberal Washington establishment. For previous posts examining Intrade, see the previous: One, Two, Three. Intrade's market for the 2012 Republican primary may be found here.

As with other candidates who made public declarations that they would not run, the odds for Mike Huckabee and Mitch Daniels have crashed to 0%. It's worth pointing out that candidates who have made unconvincing denials of their intentions to run (i.e., in response to interviewer questions rather than of their own initiative) have low odds, but not zero. Chris Christie and Rick Perry, for instance, are given about 2.3% by the market.

Newt Gingrich's stock on Intrade crashed almost as badly as the candidates who left the race. He is given 2.3%. That's on par with some people who say they're not running. Obviously Gingrich's fall was due to his terrible first weak of campainging. Did Gingrich's gaffes really doom his campaign? Maybe for those who follow politics closely, but most Republican primary voters are several months away from beginning to pay attention. It's common for politically-minded people to overreact to the temporary downs and ups of the 24-hour news cycle. Clearly this applies to Intrade investors.

Now for a look at the highest-rated candidates. A gulf has formed between the top three and everyone else. Mitt Romney is still the Intrade frontrunner at 28.3%. Tim Pawlenty has rocketed upward, and is not far behind at 25.0%. Intrade investors have correctly determined that most of Daniels' support will go to Pawlenty, who now has a much clearer path to victory in Iowa. It's long been the conventional view that Romney is the frontrunner. For second place to get so close is very impressive.

Jon Huntsman is in third, with 17.1%. Outside of the Washington establishment (and Utah, where he was governor), very few people have even heard of Huntsman. He has not officially started a campaign or even an exploratory committee. His high ranking reflects his status as a (newly-minted, perhaps temporary) darling of the Washington establishment.

Elephant Watcher will add Huntsman to the roster of candidates and conduct a full analysis if and when Huntsman runs (or forms an exploratory committee). For now, it is enough to say that his path to victory requires destroying Romney's campaign with a win in New Hampshire. Given Intrade's love of Romney, it's ironic that they would rate Huntsman so highly: One will doom the other in New Hampshire. Who wins Iowa, if not Pawlenty?

It's fair to say Intrade investors are more likely to discount the power of an Iowa/South Carolina strategy, even though it's a more natural fit than a New Hampshire/South Carolina strategy given the similarities between IA and SC. Intrade investors are also convinced that an electable candidate will win the Republican nomination.

Why Didn't Mitch Daniels Run?

Daniels

Earlier today, Mitch Daniels released a written statement announcing that he will not run for president. The Campaign Status page has been updated yet again. The field appears to be solidifying rapidly.

Daniels, like the other three candidates who have announced they will not run, announced his decision in a convincing manner. Now only Christie and Palin remain on the roster in the "Potentially Running" category. Everyone else has officially entered the race, created an exploratory committee, or declined to run. If Palin or Christie decline to enter the race, they are likely to issue prepared statements like those made by Barbour, Daniels, Huckabee, and Trump.

Why did Daniels opt out of the race? In his statement, Daniels cited his family, and explained that his wife did not want him to run. It's actually quite common for a presidential candidate's wife to discourage her husband from running. More often than not, there is at least some resistance. Sometimes she changes her mind, sometimes not. Sometimes a candidate decides to run anyway. In this case, Daniels said that his wife had a "veto" he could not override.

Daniels, like Huckabee, had a reasonable chance of winning the nomination. Prior to his decision today, Daniels had a 7% chance of winning. Without Daniels in the mix, the race will change somewhat dramatically, especially in Iowa. This represents the biggest shake-up since Huckageddon.

As a result, Elephant Watcher will analyze the race once again and recalculate each candidate's odds of winning the nomination.

Herman Cain Officially Enters the Race

Cain

Herman Cain's presidential run is now official. Cain was one of the first candidates to open a presidential exploratory committee. As with Paul's announcement earlier this month, this was an expected development. Cain participated in the May 5th primary debate. The Campaign Status page has been updated once again.

Cain's challenge will be to increase his name recognition and convince voters that they can take a chance on a candidate who has never held elective office. Cain has plentiful executive experience in the business world. Can he successfully argue that this is enough, or even preferable to political experience? History says no. As we saw in an earlier post, no one made his way to the presidency using a business background during the 20th or 21st century. Every president had political experience except for General Dwight Eisenhower who was the Supreme Allied Commander during World War II (a job which, in many ways, did involve politics).

Luckily for Cain, his competitors lack his ability to excite audiences. Most of the field consists of drab candidates, especially now that Huckabee and Trump are gone. Cain will need to bring his charisma onto the stages of the major primary debates. To do that, he will need to get sufficiently high poll numbers to be allowed at the debates. If the May 5th debate is any indication, the bar will be set low enough--at first.

Though Cain's performance on May 5th wasn't his best, he still received the most positive attention. As the only black candidate in the race, he is guaranteed a certain amount of publicity, while other candidates will struggle to distinguish themselves from the pack. Cain was further bolstered by Huckabee's decision not to run, opening the field in Iowa and South Carolina. After Huckageddon, Cain's odds were boosted just enough to push him into the top 5 in Elephant Watcher's Rankings.

Bachmann, Christie, and Palin have yet to enter the race, so Cain may be able to use this time to gain traction among the Tea Party wing. The Republican establishment wing, on the other hand, will never accept Cain since a candidate without political experience will not be viewed as electable. Most primary voters are strategic as well, and Cain will need to convince them he can beat Obama.

News posts related to Cain will have the Cain "tag". For detailed assessment of Cain's strengths, weaknesses, and strategy, view his Profile. Elephant Watcher calculates Cain has a 5% chance of winning the nomination.

How Much Does Money Matter in a Political Campaign?

Mitt Romney held a major fundraiser Monday, collecting a total of more than $10 million for his campaign. Romney sought to establish himself as the frontrunner and overawe his competitors, none of whom can hope to match him in fundraising capability.

But what about the money itself? How much influence does money actually have in a political campaign? History tells us that the answer is: not as much as you might think.

Whether by accident or intelligent design, the early primary states are small, and the media markets relatively inexpensive. Moreover, early primary voters don't get their information from campaign ads. They watch the debates, they attend townhall events, and they often interact directly with the candidates themselves. All of this serves to diminish the influence of money.

The history of politics is littered with the failed campaigns of those who couldn't translate big money into big votes. In 2004, Howard Dean famously screamed after a disappointing third place in Iowa, despite having spent his huge money advantage. In 2008, Ron Paul was an impressive fundraiser, but he could not expand beyond his libertarian fanbase. The same year, Barack Obama outspent Hillary Clinton several times over during the Pennsylvania primary. But the voters simply preferred Hillary and handed her a huge win--even though Obama had all but wrapped up the nomination before the contest in Pennsylvania began.

And perhaps the most relevant example comes from Romney himself during the 2008 Republican primary. In Iowa, Romney spent twenty times as much money as Huckabee did. Yet Huckabee beat him all the same. Iowa voters watched Huckabee at the debates and liked what they saw. They weren't persuaded by Romney or his commercials.

Money plays a greater role further down the road, where bigger states have more expensive media markets and individual voters aren't as engaged in the process. Typically, however, a primary is decided by who wins in the first few states. Judging by their history, early primary voters just aren't for sale.

Who Benefits Now That Huckabee's Not Running?

Huckabee's decision not to run provides the 2012 Republican primary with its first dramatic shake-up. In the aftermath of Huckageddon, Elephant Watcher has recalculated the odds of the nomination battle. Huckabee had a 12% chance of victory which is now dispersed among the candidates. For a full analysis and graph of the Elephant Watcher projection of the candidates' odds, see the Rankings page.

The following is an explanation for why each candidate did (or didn't) improve his chances of winning the nomination now that Huckabee is no longer a contender:

No one candidate got a big bounce from Huckabee's exit. Huckabee was leading the polls in Iowa and South Carolina, which presumably helps whomever is in second place there. The problem? There is no clear second place in those states. (See all the early state primary polling on the Primaries page.) There is also no "Huckabee Jr." candidate who will step exactly into his shoes. Instead, many candidates will benefit a little.

Christie +2% -- He benefits from any sense that there is a vacuum in the field. Huckabee's departure also removes an obstacle from Iowa, where Christie will need to prove he is not over-hyped. But other candidates will move in to fill the void. Christie's role is to be the one candidate who can unite the Tea Party and Republican establishment; Huckabee never played the role.

Romney +2% -- Though Romney is not interested in Iowa or South Carolina as much, Huckabee's absence lessens the possibility that the same person will with both states. This makes a New Hampshire strategy a bit more viable. There's little overlap between the Romney and Huckabee constituencies, but without Huckabee in the race, it's easier for Romney to claim the mantle of "next in line." Also, Romney will perform better in the IA and SC polls now, though it may be an illusion based on his name recognition.

Daniels +2% and Pawlenty +3% -- These two candidates were behind Huckabee in Iowa and each have high electability. Neither is objectionable to the Iowa voters and can at least claim to be serious candidates. Arguably, they benefit the most from Huckabee's departure. However, they are fighting over the same oxygen, and the gain is split between them. Pawlenty gets a slight edge because Huckabee's social conservatives may be wary of Daniels' earlier gaffe about a "truce" on social issues (see this earlier post).

Cain +2% -- Though much further down in the polls and perceived electability, Cain benefits because he shares some attributes with Huckabee that might help him pick up the pieces: He's a populist, Southern, rhetorically-gifted outsider who will rely on the debates to create campaign buzz. Without Huckabee above him on the poll list, it will be that much easier for Cain to get invited to the primary debates.

Palin +1% -- Like Huckabee, she is somewhat popular among evangelical Christians and needs to win Iowa. But Huckabee's supporters already had the option of moving over to Team Sarah and had not chosen to do so.

The following candidates do not receive an increase in their chances of winning the nomination:

Gingrich -- He may be fooled into thinking he should spend his resources in Iowa, but the reality is that social conservatives there will not accept him. He will need to rely on a New Hampshire strategy.

Trump -- Trump will also need to rely on a New Hampshire strategy.

Santorum -- In theory he should be able to attract Huckabee's social conservatives, but they will tend to gravitate toward someone with a higher profile.

Paul -- He has his own constituency and is unlikely to broaden it regardless of who drops out of the race.

Huckageddon: Huckabee Announces He Will Not Run

Huckabee

Mike Huckabee announced today that he will not seek the presidency. The announcement may be taken as genuine, for the reasons described in previous posts.

Huckabee's announcement will have an immediate impact on the race. Most candidates decline to run because they know they have no chance of winning the nomination. Huckabee, on the other hand, had a clear path to victory through Iowa and South Carolina, where he was leading in the polls. Huckabee's departure will leave a vacuum that other candidates will race to fill, radically altering the shape of the race. The 2012 Republican primary will be quite different without Huckabee.

His decision does not affect all candidates equally. Elephant Watcher will recalculate the odds and issue a thorough explanation of the changes later. Generally speaking, candidates who rely on a victory in Iowa will benefit more than those relying on New Hampshire. Candidates with a higher chance of winning will tend to benefit more than obscure ones, since most voters gravitate toward prominent candidates.

Given Huckabee's strong position in the race, many political commentators will speculate about his reasons for not running. Huckabee's contract with Fox News gives him a financial incentive not to run, though one wonders why he did not spend the next few months continuing to milk the speculation about his intentions. Besides, a strong presidential run would only enhance Huckabee's stature and ability to earn money through paid speeches, books, etc.

It's quite common for family members to discourage candidates from running. In 1996, Colin Powell wanted to run for president, but his wife was adamantly opposed, fearing he would be assassinated as Martin Luther King, Jr. was. Scandals can also play a role, as in 2008, when Al Gore's infidelity prevented him from making a run. Of course, some candidates run regardless of scandals, as both Hillary Clinton and John Edwards did in 2008. In Huckabee's case, there is no indication that scandals are a factor.

During his announcement during his TV show, Huckabee said that his family was fully supportive of him making a run, and the polls were in his favor. Huckabee said that his decision not to run came during spiritual deliberations that he cannot fully explain.

Unless Huckabee can elaborate further, his motives will remain a mystery. In any case, the 2012 Republican primary field has begun to take shape. Over the next few weeks, it's likely several other potential candidates will make official announcements. The fact that Huckabee is out may make others more inclined to run.

Who is Jon Huntsman? Intrade Revisited

In two previous posts, we examined Intrade, the "investment" site where people can place bets on political events. As we saw, Intrade is not very good at predicting election outcomes long in advance, but is a good indicator of the conventional wisdom according to the Washington establishment (particularly liberals). From time to time, we will revisit Intrade to see what its investors think about the Republican primary. Intrade's page on the Republican primary may be found here.

Several of the leading candidates are in the same position as they were the last time we checked Intrade. Romney remains in the lead with 25%, Pawlenty is second with 16.5%, and Daniels has 11.7%.

There are some interesting changes, too. Jon Huntsman, Jr. has risen from nowhere up to 12%, putting him in third place. One might be tempted to ask, "Who is Jon Huntsman, and what did he do lately?" Huntsman is the former governor of Utah and was, until recently, the U.S. Ambassador to China under Obama. Huntsman is not even included in the Elephant Watcher roster of candidates. If and when he forms a presidential exploratory committee or announces a run, he will be promptly analyzed and ranked by Elephant Watcher.

There are two potential explanations for Huntsman's sudden appearance. First, the Washington establishment has become aware that Huntsman is definitely planning a run for the presidency. But why is he ranked so high, when he never appears in the polls? Huntsman has not yet received a full assessment by Elephant Watcher; for now it is enough to say that he faces an uphill battle to win the nomination. The answer is simple: Huntsman has the approval of the Washington establishment. Some of his more moderate-to-liberal positions may also appeal to the Intrade investors, who tend to be more liberal.

The second potential explanation is that some of Huntsman's supporters may be placing bets on Huntsman to manipulate the market for publicity's sake. It is an unconventional approach, but it is not unheard of: The volume of trading is low enough that a candidate (or his fans) could bump up his numbers if so inclined.

Trump's numbers on Intrade, unsurprisingly, have crashed. He was at 8.5% and is now down below 4%. All of the recent bad news has taken its toll on Trump.

Meanwhile, Cain's appearance at the May 5th primary debate earned him some attention. He is still at only 3.9%, but he was at close to 0% before the debate.

As for Huckabee, his numbers have cratered. Intrade gives him 3%, down from his high of nearly 10%. This crash took place shortly after the news broke that Huckabee would announce his decision whether to run. Conventional wisdom rules Intrade: Obviously most investors took the news as a sign Huckabee is not running.

Huckabee Set to Announce He's Not Running for President?

Huckabee

The executive producer of Huckabee's TV show released a statement claiming Huckabee will announce on tomorrow's show whether he's running for president. A New York Times article concerning the statement may be found here.

Summary: The announcement is a strong sign that Huckabee will not be running. Huckabee's aides are not aware of his decision; if he were to announce that he is running, he probably would have told his aides first. Moreover, there are complicated legal issues that would arise if Huckabee used his show to announce that he's running. By contrast, there's nothing wrong with using the show to say he's decided not to run.

Analysis: In an earlier post, we saw how a candidate may convincingly decline to run. An announcement of this nature would suffice. After all, the announcement is entirely voluntary, not prompted by an interviewer's question. In the post, we observed that if Huckabee announces he's not running, then he's not running.

If Huckabee declines to run, it will send a tremendous shockwave through the Republican field. Huckabee has been polling well, not just in national primary polls, but also in Iowa and South Carolina polls. Every candidate who has won both Iowa and South Carolina has won the Republican nomination. Huckabee nearly did it last time, and is in a good position to succeed this time.

Huckabee's departure would open the race considerably in Iowa and South Carolina. It might also increase the odds that the winner of New Hampshire could win in South Carolina--or at least, that the winners of Iowa and South Carolina would be different candidates.

When No Means No: How A Candidate Convincingly Declines to Run

As you can see from the Campaign Status page, none of the prospective candidates has officially declared he is running for president--despite several having participated in a presidential debate.

Many of the candidates have formed presidential exploratory committees, and only one on the roster (Barbour) is categorized as "declined to run." This leaves some of the most well-known candidates in the nebulous "potentially running" category. One of these--Christie--has repeatedly stated he is not running. Others have not said one way or the other. How does a candidate convincingly deny that he is running for president?

The first rule is that simply declaring that one will not run for president is not enough. Today, Barack Obama is the best-known example of this principle: On October 22, 2006, Obama appeared on "Meet the Press" and said definitively that he would not run for president. Less than four months later, Obama officially announced he was running for president; he was likely preparing for the run long before that.

If a denial isn't enough, how can one can tell if a candidate is out of the race? There are a number of ways. First, a candidate who is already in the race would only withdraw if he meant it. Unless that person is Ross Perot, it simply would not make sense to get into the race and then get out if he really wanted to run. The same is true of someone who creates a presidential exploratory committee and then declines to run. Officially endorsing another candidate is one other way to make a permanent exit from the race.

A denial is also persuasive if it takes place after a candidate declares he is interested in running, or is considering it. Barbour fit into that category. For several months, Barbour attempted to create interest in his potential candidacy. When he announced he was out of the race, he knew it would put an end to that interest. Making that announcement only made sense because he had, in fact, decided not to run.

On that point, an unprompted announcement or released statement is far more trustworthy than a response to an interviewer's question (as when Obama was questioned on "Meet the Press"). Potential candidates like Huckabee and Palin will likely release statements about their intentions during the next few months. If they say they are not running, they're not running.

Ironically, the denial of an intention to run is least believable when it is consistent. During the period when Obama was denying his intention to run, he did not waffle, suggest he "might" be running, or say he would make up his mind later. He consistently denied it and moved on. The purpose was to avoid appearing presumptuous. It was simply too soon for Obama to run, because he had been elected senator so recently.

Christie faces a similar dilemma. Since he only took office in January 2010, it would appear presumptuous--neglectful of his office, even--for him to announce he is running. He can only enter the race if he is essentially drafted by the Party. The Party cannot claim to be out of options until the race is already underway. Thus, the only way for Christie to convincingly decline to run would be to either officially endorse another candidate, or remain out of the race beyond late 2011 (perhaps October or November), when it would be too late to run.

What Can We Learn from Intrade? Part II

Continued from Part I.

As mentioned in the previous post, Intrade markets are not very good at predicting election outcomes (until right before the election), but they are a decent reflection of the conventional wisdom. More to the point, they reflect the conventional wisdom of Intrade investors.

Although anyone can place bets on Intrade, the people who do are not a representative sample of Americans. Judging by the previous behavior of Intrade markets, they are more likely to be from the "Washington establishment," and they tend to be more liberal. Until just before an election, Intrade markets consistently overestimate the performance of Democrats (presumably out of investors' optimism).

The Intrade market for the 2012 Republican primary is located here. As discussed earlier, there is some fairly high betting for even the least likely winners, because the potential payout for a long-shot bet is great. The candidates leading in the Intrade markets tell us something about the conventional wisdom of the Washington establishment.

At present, Mitt Romney leads the pack on Intrade with about a 25% chance of being elected the Republican nominee for president. This reflects the establishment consensus that he is the front-runner and the "next in line," as Republicans so often choose.

Second place is more interesting: Tim Pawlenty, who sits comfortably in second place with about 16%. Obviously this does not reflect Pawlenty's performance in the polls. But the Intrade investors recognize that his low poll numbers are probably due to low name recognition. Pawlenty's position here seems to reinforce the notion that he has successfully positioned himself as the leading "generic," unknown candidate.

Similarly, Intrade puts Mitch Daniels next at about 11%. Daniels is even less known than Pawlenty. But establishment Republicans see him as a potential consensus candidate. Recognizing Daniels shows some insight on the part of the Intrade investors.

However, you can also see the weaknesses of the Intrade investors' thinking. If Pawlenty can be selected because he's an inoffensive, "generic" candidate, why not Daniels just as easily? Pawlenty's higher numbers reflect the slightly greater name recognition that he has now, which will diminish once the race gets underway.

But Pawlenty is also higher on Intrade simply because he has formed an exploratory committee, while Daniels has not. The question of whether or not a candidate will run seems to weigh heavily on the investors' minds: Christie is at less than 2% on Intrade, and Huckabee at about 8%. If and when they form exploratory committees (or jump into the race), their numbers on Intrade will spike. Rapid swings like this undermine the idea that Intrade markets can predict future events; such a shift should only occur in response to a truly unexpected development, not something as ordinary as a contender officially joining the race.

Then again, neither Daniels nor Huckabee has formed an exploratory committee, but Daniels is ahead of Huckabee--despite Huckabee having a much clearer path to the nomination. This reflects the Republican establishment's preference of Daniels over Huckabee, whom they have never accepted as one of their own.

That's not to say Intrade is never impressed by name recognition. In 2010, Palin was consistently in the lead. Then her numbers cratered in January 2011, giving rise to Romney. Palin suffered from a drop in support around that time, and her visibility lessened in subsequent months. This could be a reflection of the (liberal) establishment view that the Tea Party lost influence after its 2010 victories.

2008 vs. 2012 - Huckabee

Huckabee

Two of the top contenders for the 2012 Republican nomination also ran in the 2008 primary: Romney and Huckabee. It's worth considering the ways in which these candidates are in a better or worse position than the last time they ran. Today we will examine Huckabee.

As explained in our Profile of Huckabee, his 2012 strategy is to repeat his 2008 strategy, but perform a bit better. His path to the nomination is to win Iowa again and to win South Carolina--where he lost by 3% last time.

In many ways, Huckabee is better off today than he was four years ago. He was an unknown, polling at around 0% and in desperate need of greater name recognition. Nobody predicted that he would do well, even in Iowa. Campaign infrastructure (i.e. money) was almost nonexistent, because no one wants to contribute money to a sure loser (unless he's Ron Paul).

Huckabee was also labeled "the preacher," as he had spent several years as the pastor of a Baptist church. The fact that he was the governor of Arkansas for ten years seemed to leave little impression in the media, which was tends to remember only one salient fact about lesser-known candidates. Despite being "the preacher," Huckabee was unable to gain endorsements from prominent Christian leaders. Even they wanted to back a winner, and chose to support candidates like Giuliani or McCain.

Huckabee was dismissed by the Republican establishment, who viewed him as an outsider. They preferred to support Romney. Romney was competing energetically in Iowa, outspending Huckabee by an overwhelming margin

At first glance, it appears Huckabee will start from a much stronger position this time around: He has name recognition and good poll numbers, and Romney is likely to spend his resources in New Hampshire rather than tearing down Huckabee in Iowa. But it's worth pointing out that Huckabee has some new challenges:

First, Huckabee will be faced with more difficult questions during the primary debates. During the primary debates of 2007-08, Huckabee was repeatedly asked questions about his religion. Debate moderators saw him as "the preacher," so their questions revolved around topics like evolution or the Christian role of women. Huckabee feared he was being marginalized. In fact, he was being given a gift. Huckabee was questioned on the very topics he knew best, and his answers endeared him to the religious voters in Iowa.

Second, Huckabee will be viewed as a more serious threat by his opponents. Last time, he took the other candidates by surprise--Huckabee's sudden rise in Iowa during the final weeks before votes were cast was aptly called the "Hucka-boom." Huckabee nearly won South Carolina a few weeks later: McCain barely won, with the assistance of another candidate (Thompson), who devoted himself solely to attacking Huckabee and helping McCain.

When a candidate is viewed as the frontrunner, he comes under withering attacks from all his opponents. Many frontrunners are only temporary for this reason. Huckabee's mettle has yet to be fully tested.

Elephant Watcher currently gives Huckabee a 12% change of winning the nomination.

Match-Up Polls vs. Perceived Electability

As explained in the Profiles section, one of the three attributes primary voters look for in a candidate is "perceived electability." Particularly in the early primaries, voters are strategic and want to select a candidate who can win.

"Electability" contains a number of ingredients: A candidate ought to be mainstream for his Party, experienced, reasonably articulate, free of scandal, and a "traditional" kind of candidate. Sometimes the voters outthink themselves by selecting a candidate like John McCain or Bob Dole: Traditional politicians who aren't "extreme" but whose inability to energize the Party's base leaves them less able to win. Perceived electability does not always translate into the ability to actually win the election.

How does perceived electability compare to the polls pitting Obama against hypothetical Republican nominees? (Match-up polls should not be confused with national primary polls, which Elephant Watcher previously discussed.)

Match-up polls are generally useless when they pit Obama against a relatively unknown candidate like Pawlenty or Cain, since voters have not yet formed an opinion on those candidates. They do yield interesting results when they involve well-known candidates like Palin, Huckabee, and Romney.

A divide is revealed here: Huckabee and Romney each run a few points ahead or behind Obama. Palin always trails Obama by double-digits, sometimes by 15 points or more. It's clear why Palin is perceived to be unelectable: Voters know Obama; they know Palin. Barring a radical transformation on Palin's part, there is no reason to think Palin will be able to improve her numbers by such a great amount and defeat Obama. Palin's supporters are enthusiastic, but history shows early primary voters will not choose someone unless they think he can win. Elephant Watcher currently gives Palin a 2% chance of winning the Republican nomination.

As mentioned, voters may be mistaken about a candidate's actual ability to win elections. Romney is a traditional politician and performs well in polls against Obama, but would he actually run well? Would lack of enthusiasm or a third party Tea Party candidate doom his chances?

Huckabee is another interesting case. In match-up polls, he runs about as well against Obama (or slightly better than) Romney. Yet he has not convinced voters that he is highly electable, only that he is moderately electable. He has not been blessed by the establishment, and he is sometimes pigeonholed as just a preacher or TV show host. If Huckabee is able to persuade voters that he is as electable as the polls say, Romney will need to find another means of getting an edge over him.

Feud with Glenn Beck Highlights Huckabee's Vulnerability

In the last few days, a feud has developed between Huckabee and Glenn Beck. Beck's website discusses the matter here.

Summary: Beck said that he did not want Huckabee to win the nomination because while Huckabee is a social conservative, Huckabee is a "progressive" on other issues. Huckabee took exception to the label, noting Beck's hatred of progressives, and criticized Beck for using hyperbole. Beck replied with a broadside attack against Huckabee's record as governor of Arkansas. Beck listed the reasons why he does not believe Huckabee has a conservative record.

Analysis: As explained in the Elephant Watcher Profile Page, Huckabee's main weakness is that his credentials as an economic conservative have often come under attack. Beck's attacks went further, criticizing Huckabee's excessive use of pardons as governor, and suggesting Huckabee is only conservative on social (religious) issues. Incidentally, these attacks were related to Huckabee's second and third weaknesses as listed in his Profile.

Beck's attacks are reminiscent of the attacks made by Fred Thompson against Huckabee just before the South Carolina primary in 2008. Huckabee narrowly lost in South Carolina, leading to John McCain's victory there and ultimately the nomination.

Perhaps most troubling for Huckabee is that these criticisms are coming from Beck, who is associated with the Tea Party wing of the Republican Party, rather than from the establishment. Huckabee runs the risk of being attacked by both flanks of the Party, narrowing his constituency considerably.

Beck also said that Huckabee is likely to be an early favorite for the nomination. Elephant Watcher concurs with this assessment, ranking Huckabee second (behind Christie, who will be a late entrant to the race). Huckabee's status as a quasi-frontrunner will make him the target of more attacks. In a future post, we will discuss Huckabee's position compared to the last time he ran.

There is one bright spot for Huckabee: Talk radio hosts and other commentators do not have as much influence on the nomination as one might expect. After all, John McCain won the nomination in 2008 despite widespread criticism from powerful conservatives like Rush Limbaugh. This is because the voters in early primary states tend to investigate the candidates personally: meeting the candidates, watching their debate performances, attending their townhalls, etc. They then make up their mind for themselves, rather than relying on the opinions of political commentators.

Even so, making enemies of Tea Party leaders--especially when already dismissed by the Republican establishment--is the last thing Huckabee needs.