Obama's Bain Capital Attacks Fizzle

The first attacks rolled out by Barack Obama's campaign this season criticized the business practices of Bain Capital, an investment firm formerly head by Mitt Romney. These attacks should be familiar to those who followed the Republican primary; Newt Gingrich and Rick Perry both painted Romney as a "vulture capitalist" who acquired companies and made a quick profit by firing the employees. Obama's attacks essentially reiterated these claims.

During the Republican primary, the idea of demonizing Bain Capital appealed to some of Romney's rivals because the attacks undermined Romney's central theme: Romney claimed to have economic expertise, and claimed to be the candidate who best knew how to create jobs. But the attacks against Bain fizzled quickly during the primary and were abandoned after only a couple weeks, never to return. The Bain attacks failed for two reasons. First, they were perceived as attacks from the left--attacks against capitalism. Even some of Romney's enemies, like Rush Limbaugh, denounced the attacks. Second, Romney was able to defend himself by pointing out that he was largely successful in saving companies while at Bain. Romney claimed that while some companies failed, overall Bain was able to generate thousands of jobs.

As before, the present attacks against Bain have fizzled--for now. But why? Unlike Romney's Republican rivals, Obama has no need to position himself to the right of Romney, so attacking from the left shouldn't be a problem. Therefore, the answer must be found in the other reason the Bain attacks failed during the primary season: Overall, Romney's business record is one of creating jobs, not destroying them.

The other big problem Obama faced is that attacks against Bain are easily interpreted as attacks against private equity firms--the practice of outside companies buying a failing business and trying to fix it to make a profit. After Obama unveiled the Bain attacks, prominent Democrats like Bill Clinton and Newark mayor Cory Booker (among others) balked, expressing a positive view of private equity firms in general. During an interview, Clinton used the word "sterling" to describe Romney's business experience. These deviations from the official line were deeply embarrassing to the Obama campaign.

Should Obama abandon attacks against Bain? Not quite. While he must avoid broadening the scope of his attacks to encompass all private equity firms, Obama can continue to smear Romney by pointing out each of Bain's failures during Romney's tenure. This, however, is a tactic rather than a strategy. In other words, the Bain attacks should be one clod of dirt among many to throw at Romney.

Elephant Watcher has determined that Obama's chances of winning the election are greatest if voters believe Romney would be a return to the economic policies of George W. Bush. Earlier, we explained this "Old" vs. "Current" vs. "New" dynamic. The Bain attacks are not sufficient to convince voters that Romney is too incompetent, unqualified, or inexperienced to fix the economy. Rather, Obama must persuade voters that Romney simply has the wrong ideas--the same ideas that Bush had.

So far, the Obama campaign has failed to focus its efforts in that direction. This may be because they think the idea of "Bush's third term" was worn out by its use against John McCain in 2008. Despite its status as something of a cliché, and despite the fact that Romney doesn't remind people of Bush, it remains the best strategy available to Obama at the moment. Elephant Watcher believes that the Obama campaign will eventually come to realize this, and will proceed accordingly. In fact, Obama may even benefit from an obvious failure of alternate attack plans, to the extent that they encourage him to pursue the proper one. Still, the burden is on Obama to carry out the attack.

The Economy and the Presidential Race, Part II

In Part I, we discussed how the economy will affect the 2012 presidential race. If the economy had made a stronger recovery by this point, Barack Obama could credibly run a version of the 1984 "Morning in America" reelection campaign. Given the state of the economy and how little time is left for it to improve, Obama's odds of winning reelection have been harmed. But Mitt Romney cannot defeat the incumbent president merely by pointing to a stagnant economy. Obama can still win if he is able to persuade voters that Romney's handling of the economy would be even worse. Today, we will examine how that argument fits into what will become a fundamental dynamic of the race.

When voters develop the opinions on which they base their vote, they do so by forming general impressions about things. They may study specifics and details, but they usually remember only generalities; specifics primarily serve to help voters develop those general impressions. Thus, we can expect that on election day 2012, voters will not be basing their votes on data and economic theory. Instead, they will vote based on the general impressions they have about how Obama and Romney will handle the economy. The impressions they will form may be called "Old," "Current," and "New."

"Current," is the general impression that voters currently have about the economy and how Obama is handling it. Most voters are dissatisfied with the economy and have little hope that a dramatic improvement will take place in the near future. Voters also believe Obama has done little or nothing to spark a real improvement in the economy. Partly that's because of the choices Obama made during his first term. While the Democrats had control of Congress, they spent much of their time on Obamacare and some legislation that never passed (e.g. cap and trade). From 2010 onward, Republicans have been able to block unpopular Democratic policies, and Democrats have been able to block Republican policies.

Therefore, Obama is stuck with the "Current" impression, one which voters don't particularly like. That's why his reelection bid is in peril. By contrast, voters' impression about the way Romney will handle the economy is not yet set in stone. There are two possibilities for Romney: "Old" and "New."

"Old" is the general impression the voters have about the way the economy functioned prior to Obama's presidency, under George W. Bush. Although voters were somewhat satisfied with the economy during some of Bush's presidency (enough to get him reelected), that impression was altered by the catastrophic events of late 2008 and early 2009. Voters are uncertain of the cause of the economic meltdown, but they know Bush was in charge for nearly eight years before it occurred.

Needless to say, voters do not approve of the "Old" impression because they do not want to relive the economic panic that occurred. Arguably, they view the "Old" as worse than the "Current." At the very least, "Old" is not superior enough to "Current" to overcome the inertia of incumbency.

But is Romney stuck with the "Old" impression? No, not necessarily. Romney can focus his campaign on leading the country's economy in a different direction than those of Obama and Bush. Romney will prevail if he can give voters a "New" impression. Obama will oppose him by telling voters that Romney would simply rehash the Bush policies. According to Obama, Romney represents the "Old" that was rejected in 2008. This will become a main battle--if not the main battle--of the campaign.

The outcome of the 2012 election is uncertain because neither side has engaged in this battle yet. Obama's advantage is that he can put pressure on Romney to disavow Bush's policies, encouraging a split in the Republican Party that remains loyal to Bush. To the extent that Romney actually does intend to rehash Bush's policies, that is also advantageous to Obama.

Romney has some advantages of his own. First, the burden is on Obama to establish that Romney is a retread of Bush. Otherwise, voters may assume Romney is something "New" out of sheer optimism. Superficially, Romney is not similar to Bush. Voters associate Bush with Texas and the South. They saw Bush as genial and comfortable in his own skin, but unintelligent and unable to communicate. Romney is associated with the Northeast. He is viewed as intelligent and well-educated, but also as someone from a wealthier class who has difficulty relating to the average person. All of these superficial differences increase the difficulty of painting a Romney presidency as Bush's third term.

Romney's final advantage is his strongest one: He has control of his own message. He is free to choose the policies he wants to pursue, whether they are echoes of Bush or solutions he develops on his own. Based on what Romney decides to do and say, he can put as much or as little distance between himself and Bush as he wants.

The Economy and the Presidential Race, Part I

Even before the Republican presidential primary campaign began in early 2011, conventional wisdom held that the 2012 presidential race would be about the economy. Mitt Romney focused his primary campaign almost entirely on his economic credentials, hoping it would position him best for the general election. So far, the conventional wisdom appears to be right: Despite the occasional diversion into social issues or foreign policy, the subject has repeatedly turned back to the economy. Voters consistently rate the economy and jobs as their top priorities.

Historically, the incumbent president gets most of the credit and most of the blame for the country's economic state. Barack Obama and his team have long been aware of this, just as they have been aware of the likelihood that the economy would be the 2012 campaign's central issue. For most of Obama's presidency, the conventional wisdom among Democrats has been that the economy was bound to improve by the time the 2012 election rolled around. This belief wasn't necessarily based on confidence in Obama's policies. Instead, it was based in large part on the simple fact that recessions in the American economy tend to be temporary--they rarely last more than a few years.

Originally, the Obama team hoped to run their own version of Ronald Reagan's successful 1984 reelection campaign, which was known by the slogan "Morning in America." Reagan had inherited a bad economy, and it remained bad for much of his first term, but things greatly improved by the time the 1984 campaign began. Republicans generally believe that Reagan's policies (e.g. tax cuts) led to the economic improvement that resulted in Reagan's reelection. The Obama team believes Reagan's policies did not improve the economy; they think the recession ended on its own after a few years, just as they expected the recession to end for Obama.

If America's economy had greatly improved by now, Obama would be well-positioned for reelection. However, the economy did not improve as Obama's team expected. The economy is no longer in the crisis that it faced in 2008-09, but it has remained stagnant. Unemployment continues to be a serious problem. Realizing this, most Democrats no longer believe Obama could successfully run a "Morning in America" reelection campaign. If they acted as cheerleaders for the economy, it could backfire, since dissatisfied voters would perceive this as insensitivity to those who are struggling. At worst, attempting to take credit for an economic recovery under current conditions could inspire laughter and derision.

Ironically, Romney is the candidate who is normally more susceptible to the criticism of being "out of touch," given his wealth and some earlier gaffes. (For more information on candidates' strengths and weaknesses, see the Candidate Profiles page.) In a traditional campaign, one would expect the Democrat to "feel the pain" of the working class and highlight the struggles of common Americans; traditionally, the Republican trumpets the virtues of the capitalist economy.

Here, the roles are reversed: Romney highlights the struggles of common Americans in order to implicitly (or explicitly) criticize Obama's handling of the economy. Obama, meanwhile, is in the position of, if not denying the poor state of the economy, at least claiming things aren't as bad as they could be. This reversal of roles blunts one of Romney's weak points, blocking off one of Obama's lines of attack: It's difficult to cast Romney as out of touch when he's the one busy feeling the pain of the average worker.

The more important impact of the country's economic state is the improbability of the "Morning in America" victory scenario for Obama. (For a description of the victory scenarios for Obama and Romney, see the Candidate Rankings page.) Though it would have been an attractive victory scenario, it is not the only one available to Obama. There is also the possibility of convincing the electorate that Romney would return America to the state of economic crisis that occurred at the end of George W. Bush's presidency. We will examine the possibility of that scenario in Part II.

Reviewing Early General Election Polls

As part of Elephant Watcher's shift from the Republican primary to the general election, we have added a page devoted to national match-up polls between Barack Obama and Mitt Romney. The Polls page will be updated frequently, adding national polls as they are released, and averaging the most recent of them. Though polling data during the Republican primary was occasionally sparse, there will always be plenty of polls released on the 2012 presidential election. The trick is in reviewing all of this data in the most intelligent manner possible. In today's post, we will explain how Elephant Watcher will present the polling data during this election season, as well as the reasons behind it.

The Polls page will only include national polls. This is in contrast to many political analysts, who spend their time on examining the polls from swing states. Since the 2000 election, an increasing amount of attention has been paid to state polls, rather than national--because the winner of a presidential election is determined by the electoral college. Earlier, we offered an in-depth explanation of why it's much better to follow national polls rather than state polls. To summarize, state poll analysts are forced to rely on less accurate polling, fewer polls, out-of-date polls, less-reputable pollsters, and must cobble together electoral map projections from multiple, interdependent state outcomes. National polls bypass each of these problems. Unless the election is decided by less than 1% nationally, the winner of the popular vote is virtually guaranteed to win the electoral college anyway.

Having decided to track national rather than state polls, there are still a few things to consider. Some polls are listed as polls of "likely voters," while others are "registered voters" or "adults." Polls of likely voters involve what are called "likely voter screens," which adjust the polls based on which participants are most likely to vote in November. To do this, pollsters ask participants whether they intend to vote, but also ask other questions to determine whether they are likely to turn out (e.g. past voting history, voter enthusiasm, etc.). Polls of registered voters do not.

The difference matters. In presidential elections, Republican voters consistently turn out to vote at a higher rate than their Democratic counterparts. This means that registered voter polls will consistently overestimate the strength of the Democratic candidate. This is not an expected or potential bias--it is a known bias. By the time the election is imminent, nearly all pollsters will switch to polling likely voters rather than registered voters in order to eliminate the bias and increase accuracy.

Early on in the election season, however, many pollsters will not yet employ the likely voter screens. Why not? Because the closer you get to the election, the easier it is to determine whether someone is likely to vote. Often, pollsters will begin the season by polling registered voters, and at some point down the line, they make the switch. Other pollsters will use a likely voter model from the beginning.

If we were to review all of the polling data at face value, likely voter polls would be mixed in with registered voter polls. There would be a consistent gap between the accurate likely voter polls and the inaccurate registered voter polls, which overestimate the Democrat's chances. Later, as the pollsters switch to polling likely voters, the Republican candidate would suddenly increase in the polls, showing momentum where perhaps there is none. Obviously, this is not an ideal situation.

To correct for these problems, Elephant Watcher will adjust the registered voter polls, marked by an asterisk (*), by three points in favor of the Republican candidate. To avoid confusion, the results will be listed the same; only the R+ or D+ number in front of the poll will be changed. (For example, a registered voter poll listed "Obama 45, Romney 46" will be counted as R+4 instead of R+1.) Polls of likely voters will be unaffected. The adjustment is three points, based on the average difference between registered and likely voter polls--diminished somewhat because it assumes a slight Republican bias on the part of Rasmussen polls.

Note that this won't necessarily produce good polling results for Mitt Romney: If Barack Obama is doing well in the polls, he will be ahead of Romney in both likely voter and registered voter polls. Note also that this is a temporary measure, since nearly all pollsters will be switching to likely voter polls in the coming months.

Since it's always better to use multiple polls rather than looking at one poll, the Polls page will include a poll average. This will be a simple average of the ten most recent polls. One final adjustment is that "daily tracking polls," which release polls every day (e.g. Gallup and Rasmussen) will only be added only once every three days. This is done for two reasons. First, the poll average would otherwise be overwhelmed by the large number of polls being released by Gallup and Rasmussen. Second, daily tracking polls include overlapping data. For example, a tracking poll might include polling data from Monday through Wednesday; the next day, from Tuesday through Thursday--reusing the same Tuesday and Wednesday data. Entering daily tracking polls only once every three days solves both problems.

Marco Rubio's Effect on the Hispanic Vote?

Rubio

In Part III of our series on Mitt Romney's potential choices for vice president, we examined some of Marco Rubio's strengths and weaknesses. The most conspicuous advantage Rubio would bring to the ticket is his appeal to Hispanic voters. But whether and to what degree Rubio would bring in Hispanic voters is open to debate. The Democratic Party's coalition relies on securing a very high percentage of the Hispanic vote. Many Democratic political analysts place their hopes for a future Democratic majority on demographic changes (i.e. a rise in the Hispanic percentage of America's population). The rise of Hispanic Republicans like Rubio would undermine all of that--if they are, in fact, better equipped than white Republicans to attract Hispanic voters. How would Rubio's inclusion on the Republican ticket alter the equation?

It's not hard to understand why many believe Rubio would offer Romney a boost in the Hispanic vote. In the country's entire history, no major party ticket has ever included an Hispanic candidate as the presidential or vice presidential nominee. When Barack Obama defeated John McCain in 2008, McCain got only about 33% of the Hispanic vote; George W. Bush had won about 44% in 2004. Thus, there's plenty of room for improvement--a Romney/Rubio ticket would only need to get back to 44% in order to give Obama a major headache. And Romney himself is not particularly repulsive to Hispanic voters: Romney won the Hispanic vote overwhelmingly during the 2012 Republican primary.

However, there are many skeptics. Among Democratic analysts, the conventional wisdom is that Rubio would have a negligible effect on the Hispanic vote. Their argument is essentially as follows: While Rubio is Hispanic, he is Cuban-American rather than Mexican-American. Mexican-Americans comprise roughly two-thirds of America's Hispanic population, while Cuban-Americans account for about 4%. Rubio would influence the Cuban-American vote, but they already lean Republican. According to Democratic analysts, Mexican-Americans (and presumably other Hispanics) have a negative attitude toward Cuban-Americans and do not consider that group "one of them." They argue further that Hispanics are not monolithic and would not vote based on ethnicity anyway.

The skeptics' analysis, while a source of comfort to many Democrats, contains a number of major flaws. First, there is a basic misunderstanding of what Rubio would need to do in order to help Romney win the election. Rubio would not need to replicate Obama's 2008 feat of capturing more than 90% of his ethnic group's vote. As mentioned, Bush got 44% of the Hispanic vote, which is roughly the point at which Obama's coalition would begin to collapse. Rubio would simply need to peel off a small chunk of Obama's Hispanic vote share--including many who voted Republican in prior elections.

Next is the question of whether non-Cuban Hispanics would be influenced by Rubio's presence on the ticket. An analogy might be drawn to what occurred during the Democratic primary in 2008. Initially, polls showed black voters supporting Hillary Clinton over Obama by a wide margin. Analysts--especially those supporting Clinton--offered many reasons why black voters would prefer Clinton to Obama. They claimed that while Obama was black, he was not considered "black enough." Obama was biracial; he was raised by his white grandparents; he grew up in Hawaii and Indonesia rather than a big city; he had a privileged background; his father was an African immigrant rather than an African-American; he was not descended from slaves, etc. At that time, analysts also remarked upon the fact that the black vote is not monolithic, and that black voters would not vote based solely on ethnicity.

Polls continued to show Obama trailing Hillary Clinton; the Clinton family was always well-received by black voters. But after Obama won Iowa, it became clear that Obama had a real chance to become the first black president. At that point, everything changed. The black vote unified behind Obama, who frequently defeated Clinton among that ethnic group by margins of 10-to-1. The Clintons even found themselves repeatedly accused of racism when they criticized Obama. Evidently, there was no longer a perception that Obama was not "black enough" to attract black voters. Obama may not have been born to African-American parents, but he was the "most" black candidate who had ever made a serious run for the presidency.

Similarly, Rubio would be the "most Hispanic" candidate to appear on a presidential ticket. He would not need to cause a mass defection of Hispanic Democrats the way Obama caused nearly all of the black Clinton supporters to switch sides; Rubio would merely need to regain the Republicans and some Independents who voted for Obama.

While voters may not vote solely on ethnicity, it's difficult to argue that the first Hispanic VP wouldn't draw the attention of Hispanic voters and cause them to consider the Republican ticket on a more serious level. In addition, for those who avoid voting Republican for fear of anti-Hispanic bias in that party, the mere presence of an Hispanic on the ticket would have a real impact.

If Rubio were on the ticket, we might expect a parallel to Obama's experience in the Democratic primary to play out as follows: Rubio is announced as the VP nominee. Threatened, Democrats attack the choice as "cynical." Early polls show little movement toward Romney among Hispanics; Democrats declare that Rubio has failed to have an impact. Democrats then hone in, attacking Rubio's lack of experience. Over time, as the possibility of an Hispanic vice president becomes more real, and as Rubio makes his case, things begin to turn. Hispanic voters slowly shift toward the Republican ticket. Failing to notice this, the Democratic attack machine overreaches--they are unable to resist comparing Rubio to Sarah Palin. This backfires.

Rubio is viewed as intelligent and passionate about the American dream. By claiming Rubio is unintelligent, Hispanic voters feel the Democrats have treated Rubio unfairly. They don't agree with Rubio on everything, but the Palin comparisons are insulting and suspicious. Dangerously, signs of anti-Hispanic prejudice leak among some less-disciplined Democratic surrogates. As the VP debate approaches, expectations for Joe Biden are inexplicably pumped up by optimistic Democrats who temporarily forget his history of gaffes. Rubio crushes Biden in the debate. Biden responds with increasing condescension toward Rubio, and it doesn't have the desired effect. Only after election day do Democrats realize how large a share of the Hispanic vote the Romney/Rubio ticket has managed to get.

Romney's Pick for Vice President? Part III

Christie

In Part II, we discussed the possibility of Rob Portman being chosen as Mitt Romney's VP. The conventional wisdom is that Portman would be a "less risky" option, and that Romney hopes to avoid a repeat of the Sarah Palin debacle. But as we explained, none of Romney's choices carry similar risks to Palin--because they will all be fully vetted and have all participated in numerous televised interviews. But what are the potential upsides and downsides to potential VPs like Marco Rubio and Chris Christie, and what other options are available?

According to the Intrade odds on vice presidential nominees, the next most likely option after Portman is U.S. Senator Marco Rubio from Florida. Rubio served in Florida government for a little over a decade, rising to the office of Speaker of the Florida House of Representatives. In 2010, he ran for the U.S. Senate against the Republican governor, Charlie Crist. Rubio was viewed as the Tea Party challenger in the race, and he won overwhelmingly.

There are a number of reasons why Rubio is presumed to be high on Romney's list of potential VPs. First, Rubio would be the first Hispanic ever to be on a major party presidential ticket. The question of what effect this would have on the Hispanic vote in the general election is very controversial (and very important), and will be addressed in a future post. For now it's enough to say that Rubio would help Romney's ticket appeal to the Hispanic vote, a demographic where Romney is currently weak.

Rubio is from Florida, the nation's largest swing state. Unlike Romney, Rubio represents the conservative or Tea Party wing of the Republican Party. At age 41, Rubio belongs to a younger generation of Republicans, while Romney would return the presidency to the first wave of Baby Boomers. And while Romney was raised in a wealthy background, Rubio has working class roots.

In all of these important ways, Rubio would balance the ticket. The downside to Rubio is that he has only been a U.S. Senator for about a year and a half. According to conventional wisdom, Rubio's inexperience will undermine Romney's central theme, which is that Barack Obama had too little understanding of the economy before rising to the presidency. To be sure, this is Rubio's biggest weakness; if Rubio had been elected to his current office a few years ago, he would be guaranteed the VP position.

On the other hand, Rubio was in an important office in Florida prior to his being a U.S. Senator. And Rubio's intelligence, along with his strength in interviews and debates, will greatly--or entirely--offset his lack of experience, even if it doesn't stop Obama's attacks. Indeed, if the Obama campaign overreaches by comparing Rubio to Palin, it may backfire terribly, offending many Hispanic voters. In addition, Rubio's youth helps reinforce the idea that Romney will take the country in a new direction, rather than being a return to the days of George W. Bush.

What about Chris Christie? Christie served as Attorney General for the District of New Jersey during the 2000s, until he was elected New Jersey Governor in 2009. Christie considered running for president in 2012, but he had been governor just a bit too briefly. Though somewhat new to the national scene, Christie would not be vulnerable to claims that he lacks experience; he is several years older than Rubio and has accomplished much during his two and a half years as governor.

On the surface, Christie does not appear well-positioned to balance Romney's ticket. They are both from the Northeast; there is little hope of bringing many Northeastern states into the Republican fold. Though considered more conservative than Romney, Christie does not represent the Tea Party wing of the party in the same way that Rubio or a traditional conservative would. The fact that Christie is from the Northeast tends to amplify conservatives' concerns. And, of course, Christie is another white male.

Upon closer examination, there is a case to be made that Christie would balance the ticket. While Romney exudes wealth and privilege, Christie appeals to the common man. In New Jersey, Christie has been unusually effective in winning over working class voters--essentially the "Reagan Democrats" that Romney had trouble with during the Republican primary. Christie has unique rhetorical gifts. Unlike Romney, he is charismatic and adept at talking tough while sounding reasonable enough to persuade. Christie's aggressiveness on particular issues (taxes, spending, teachers' unions) has gone a long way toward persuading conservatives that he is one of them. Like Rubio, Christie represents a new direction and a genuine effort toward limiting the size of government.

There are a number of other potential VPs Romney could pick. If Romney is inclined to pick someone who is not a white man, it's likely that his options are "preempted" by Rubio. For example, the 2010 midterm saw the election of several women and minorities, but they would be vulnerable to the same criticism about inexperience, while lacking Rubio's strengths. Louisiana governor Bobby Jindal has a bit more experience, but is also young. An Indian-American, Jindal wouldn't appeal to an extra ethnic group with many votes; he is not nearly as effective a communicator as Rubio. (Jindal also endorsed Rick Perry for president.)

Finally, Romney could go with "none of the above," picking someone at the top of nobody's list. But Portman, Rubio, and Christie each make sense from different perspectives. In Elephant Watcher's view, either Rubio or Christie would help boost the Republican ticket in 2012, while Portman would do it some harm.

Romney's Pick for Vice President? Part II

Portman

In Part I, we considered who might be quickly eliminated from Mitt Romney's list of potential vice presidents. In this post, we will take a closer look at some of the "frontrunners" for the VP pick, and how Romney might choose among them.

The Intrade market on Romney's VP selection has Rob Portman and Marco Rubio far above the rest. After eliminating Mitch Daniels and Tim Pawlenty, Chris Christie holds a slight edge among those who remain. What's the reasoning behind the perception that Portman has the best chance, and why is Rubio ranked so high? Is Christie a reasonable option, or would he fail to balance the ticket?

The conventional wisdom is that Portman, a U.S. Senator from Ohio, has the best chance of being picked because he is not a "risky" option. Portman is an experienced politician who long served in Ohio government. He also served as the U.S. Trade Representative for a year under President George W. Bush, and another year as the Director of the Office of Management and Budget. Consequently, he has a reputation for being knowledgeable about the economy. He is not associated with any scandals.

According to conventional wisdom, Portman would not really add anything to the ticket, though he hails from an important swing state and would reinforce Romney's campaign theme of economic expertise. He would be described as "another boring white guy" and would not add charisma to the ticket, but at least he would not harm it. The idea is that Romney may be receptive to a boring, safe choice after John McCain's disastrous experience with Sarah Palin in 2008.

Though Romney may in fact be thinking along those lines, Elephant Watcher believes that it would be a mistake to do so. The analysis of why Portman carries less risk is based on a fundamentally flawed understanding of how Palin was chosen and why she carried risk. In 2008, McCain made a last-minute decision to consider Palin for VP. There was no time to conduct a normal vetting of Palin. According to those who conducted the vetting, the McCain team only had time to do some light research on Palin, mostly on the Internet. They did not travel to Alaska or interview Palin's colleagues. This was risky, because they simply didn't know much about Palin before choosing her for VP.

By contrast, each of Romney's potential VP candidates will be thoroughly vetted. If they find skeletons in a candidate's closet, he will be eliminated from consideration. If not, they will go forward. In either case, Romney won't be taking a risk on an unknown candidate.

In addition, Palin was risky because she was untested by the media. She had not been grilled by liberal interviewers or appeared on Meet The Press. (Indeed, after all these years she still hasn't been on Meet The Press.) Since no one could guess how Palin would perform, McCain took a risk. It proved to be a catastrophic mistake, as the interviews revealed she was unprepared for the office.

Once again, by contrast, even relative newcomers like Rubio and Christie do not carry this risk. Within months of becoming a U.S. Senator, Rubio had already appeared on Meet The Press; Christie has been on the show multiple times. Both have been on countless other televised interviews--by friendly and hostile interviewers--and have acquitted themselves well.

The alternatives to Portman may not be "risky," but what about the idea that Portman has no drawbacks? This, too, is untrue. As we explained in an earlier post on how VP nominees are chosen, choosing among potential VPs always entails trade-offs. If Christie or Rubio have upsides that Portman doesn't, then the lack of those upsides is, in effect, a downside for Portman.

More importantly, Portman does have one major weakness: His association with the economic policies of the Bush administration. Since Portman served as the OMB director while Bush was president, it would be easier for Barack Obama to characterize Romney as a Bush retread. As we explained in the Candidate Rankings, Obama's odds of winning reelection are highest if he is able to convince voters that Romney would simply repeat Bush's economic policies. For that reason, Portman must be considered a VP pick with a dangerous flaw--not a "safe" option.

What about Christie and Rubio, and other potential VP picks? We will continue our examination in Part III.

Romney's Pick for Vice President? Part I

Yesterday we discussed the manner in which vice presidential nominees are chosen by presidential candidates. Candidates generally look for a VP who will balance the ticket by appealing to another segment of the country (or faction of their political party). Often, a VP is chosen who is perceived to offset or "fill in" a weakness in the presidential candidate. How might Mitt Romney apply these factors to his own choice for VP?

Speculating on Romney's VP selection process has two major difficulties. First, the selection process entails a large degree of "vetting" potential candidates--probing for weaknesses, digging up dirt, etc. Once the VP choice is made, it really can't be un-made. The presidential candidate wants to know everything unappealing about a potential VP before the choice is made. Naturally, all the research that takes place during the vetting process is secret. Political analysts are generally not privy to what is revealed, so they can't have much insight--unless there are no "show stoppers" revealed in the vetting.

The second difficulty inherent in speculation about the VP selection is that it is a task performed solely by the presidential candidate himself. Romney will have many people assisting him, but the choice will be Romney's alone. As we saw last year when various Republicans were deciding whether or not to run for president, it's not always easy to predict what a candidate will do. The voting public behaves in ways that can be measured and analyzed, but the decision of a single person is harder to guess.

Any examination of the VP selection process must admit these major difficulties. A potential VP pick could appear to be perfect in every way, but if skeletons are unearthed during the vetting, he'll be kicked off the list and no one will know about it. Similarly, no one outside Romney's inner circle knows how he really feels about each of the potential VPs. Nor do they know how Romney perceives himself--and therefore, they don't know how Romney thinks he should be "balanced."

The first step every candidate takes in choosing a VP is to draft a list of names. The list is then shortened and shortened again, as the candidate goes about the process of elimination. As we mentioned in the overview of the Intrade market for Republican VP nominee, there is a very large number of potential candidates. Though Rob Portman and Marco Rubio stand above the rest in terms of Intrade odds, there are a lot of people given some percentage of being chosen.

According to the Intrade market, the next names on the list are Tim Pawlenty, Mitch Daniels, and Chris Christie. These names should be familiar for readers of Elephant Watcher, since each of them were potential contenders for the presidency. They chose not to run (Pawlenty entered the race but dropped out early).

Daniels can likely be crossed off the list. He chose not to run because of personal/family issues, and those same issues will keep him from being considered for VP. In the same vein, we can eliminate the names of others who could have run but for various reasons chose not to, like Haley Barbour, Mike Huckabee, and Sarah Palin.

Christie is a different story. He didn't run in 2012 because it was just a little too early. If he had become governor a year or two earlier, he might well be the Republican presidential nominee. Having spent an additional year as governor of New Jersey, he's less likely to disqualify himself. He won't be cut from the list--not yet.

If a candidate runs and does very well, he may be chosen as VP for the sake of party unity, or because his success showed his strong qualities. Pawlenty's failed run doesn't qualify. If anything, it made him look worse, because voters could have gravitated toward him but didn't.

As for the rest of those who ran in 2012? If the Republican primary revealed anything, it was the weakness of the field. Nearly everyone had serious electability issues. Simply reading the list of candidates can make a Republican wince: Michele Bachmann, Herman Cain, Newt Gingrich, Ron Paul, Rick Perry, Rick Santorum. None of these will be chosen. Jon Huntsman may have been electable, but he ran to the left of Romney and thus cannot be considered.

Even after making all of these cuts, there are still many potential VPs left standing. In Part II, we will take a closer look at how Romney might choose among them.

How Should a VP Nominee Be Chosen?

The first big decision made by every presidential candidate is the selection of his vice presidential running mate. By the time the Republican Party holds its convention on August 27th, Mitt Romney will have decided who gets the VP slot. What factors do--and should--presidential candidates weigh when making this decision?

Judging by the history of VP selections, the main goal is choosing someone who balances the ticket. A candidate is always eager to unite his political party. If he is viewed as a member of one wing of the party, he'll often choose a VP from the other wing. If he "belongs" to a certain region of the country, he'll choose someone from another region. Every presidential candidate has certain salient characteristics, including weaknesses. Often a candidate will choose a VP who provides a contrast. If a candidate is too old, he'll pick someone young. If he lacks experience, he'll pick someone who has a lot of experience. And so on.

It's striking just how often this rule holds true. Consider some recent VP selections and how they were intended to balance the ticket: In 2008, John McCain chose Sarah Palin (young, conservative) and Barack Obama chose Joe Biden (old, experienced, white). In 2004, John Kerry chose John Edwards (young, Southern). In 2000, George W. Bush chose Dick Cheney (experienced). In 1996, Bob Dole chose Jack Kemp (young, conservative). In 1988, George Bush Sr. chose Dan Quayle (young, Midwestern). In 1980, Ronald Reagan chose George Bush Sr. (moderate). Most famously, John F. Kennedy chose Lyndon Johnson in 1960 to help him win votes in the South.

A different method of choosing a VP is to pick someone who reinforces the qualities of the presidential candidate. Instead of balance, this might be called "doubling down." As a general rule, candidates don't do this. Since voters pay most of their attention to the presidential candidate rather than the VP pick, it's difficult for the VP to "add" anything through repetition. A VP's qualities only shine through when set in a contrast. For example, it's unlikely that Obama would have improved his share of the black vote by selecting a black running mate. Nor would a wing of a political party be extra-energized by having both members of the ticket from that wing. If there were a bonus effect, it would certainly be offset by alienating (or failing to energize) the other wing.

For an example of the "double down" approach, one might cite 1992, when Bill Clinton chose Al Gore, who was also young, moderate, and (somewhat) Southern. However, even in that case it's probable Clinton sought to balance the ticket: Gore was one of only 10 Democratic senators who voted in favor of the First Persian Gulf War. Clinton was under fire for being a draft-dodger who had protested the Vietnam War in Moscow; choosing Gore, a hawk, made sense as a balancing maneuver.

Nevertheless, a candidate must be careful not to choose a VP whose qualities undermine the candidate's message. In 2008, McCain's entire argument (almost) was that he was very experienced, and Obama wasn't. McCain then chose Palin, whose main weakness was that she lacked experience. But even in that case, the Republican ticket increased in the polls--until voters discovered just how inexperienced Palin was.

This leads to the final principle, which might be called the "Do No Harm" principle. The idea is that even a good VP probably can't add much to the ticket, but a bad VP can drag a ticket down. There's no question about the damage a VP can do if a VP has major weaknesses (e.g. Palin, whom many voters couldn't imagine being president) or is the subject of a scandal (e.g. Thomas Eagleton, removed from George McGovern's ticket in 1972 after the discovery that he had undergone electroshock therapy and had been diagnosed with "suicidal tendencies").

An aggressive form of the "Do No Harm" philosophy says that a VP can rarely do any good, but can easily do harm, so a candidate should choose the "safest" VP nominee possible--even if it's known he will add nothing to the ticket. This philosophy is questionable. It's difficult to empirically determine whether VPs of the past added nothing to the ticket, since there's no way to test what would have happened if a different VP were chosen. Even measuring poll numbers before and after the VP selection is tricky, because the VP selection usually occurs during or just before the party's convention, which may cause a "bounce" of its own. Instead, one must simply use common sense: Does balancing the ticket enable a candidate to reach a broader array of voters? Yes.

Once we accept that a VP can have a positive impact on a ticket's chance of victory, it's no longer possible to take the view that a candidate should only seek to minimize risk. By its very nature, the value of a VP selection is comparative--it must be weighed in comparison to other potential VP selections. For example, suppose a candidate can choose between two possible VPs. VP #1 would not alter the ticket's poll numbers either way. VP #2 would increase the ticket's poll numbers by five points. Would choosing VP #1 "Do No Harm"? The answer is no, even though the ticket's poll numbers don't go down. It's still a loss of five points that the ticket would have gotten if VP #2 had been chosen. Viewed in that context, VP #1 no longer appears a "safe" choice.

In summary, a candidate should choose the VP who best enables him to maximize the number of voters the ticket can attract. He must balance the ticket, but without undermining the fundamental message of the campaign. He should avoid doing harm to the ticket, while also keeping in mind that it's "harm" to not pick a VP who would add something to the ticket.

Intrade Odds: Barack Obama in the Lead

As with the Republican primary, which has essentially concluded, Intrade has a market for the presidential race. There are actually two markets for the general election at Intrade: One for which party will win the presidency, and one for which individual will win the presidency. It's better to look at the party market than the individual market; the individual market will always have a few percent floating around for remote possibilities like Barack Obama or Mitt Romney not winning their party's nomination.

Intrade currently posts a 55.9% chance for the Democrats to win, and 43.2% for the Republicans. Intrade has always been skeptical of the Republicans' chance of beating Obama in 2012. Intrade only briefly gave the Republicans as much as 50% to win, in early October last year. That moment of optimism was likely triggered by the downfall of Rick Perry in the polls at about that time. Intrade felt confident Romney would win the nomination, and obviously felt he would be a stronger general election candidate. But the long primary season seems to have worn away their confidence, such as it was.

In spite of this, Intrade's view of Romney's chances has gone up slightly in the last few weeks. For months, they had the Republican Party in the upper-'30s. Apparently a few weeks of watching close poll numbers between Romney and Obama has caused them to give Romney more credit.

Also of note is the Intrade market for Republican vice presidential nominee. U.S. Senator Rob Portman from Ohio currently leads with a 27.5% chance of being selected. U.S. Senator Marco Rubio from Florida is second with 22.1%. Everyone else is far below; there's a huge pack of potential candidates in single-digits. New Jersey Governor Chris Christie is at 6.8%, and somehow Tim Pawlenty is in fourth at 6.2%. Rubio was once the clear favorite on Intrade, running in the '30s. But since April or so, his numbers have gone down in favor of Portman.

How should these numbers be interpreted? Intrade is a pretty good indicator of conventional wisdom. Intrade investors tend to lean left and reflect the opinions of Washington, D.C. Democrats. Very often the investors are not Americans (American law related to Intrade makes processing payments more cumbersome). They would tend to be influenced by their home countries' media, which is usually even farther-left than American media.

Therefore, unlike the Republican primary Intrade markets, in which the investors had less emotional stake, we can expect that Obama's odds will be inflated relative to what they probably ought to be. Democrats tend to overestimate their chance of victory in presidential elections: In every recent presidential election aside from 1984, Democrats have been confident of victory. (Republicans, if anything, tend to be more pessimistic than circumstances warrant.)

What about the VP nominee market? Portman's rise (at the expense of Rubio) has come from increasing buzz out of Washington political commentators. Unless the Romney camp is deliberately leaking information about their selection process--which is unlikely at this stage--the buzz around Portman may not actually reflect Romney's decision-making. In fact, it may be an attempt to influence it.

Left-leaning Intrade investors may be acting out of optimism even in the VP market. As we explained in the Candidate Rankings, Obama's most likely scenario for victory is one in which he successfully paints Romney as a retread of George W. Bush in terms of economic policy. The selection of Portman as VP would be very advantageous to Obama for this reason. By contrast, choosing Rubio would reinforce the idea that Romney intends to take the country in a new direction--while harming Obama in Florida and among Hispanics.