South Carolina Primary Predictions and Thoughts

Well, the first in the South primary, South Carolina, is upon us, and public polling has added a bit of uncertainty to the race. While most polls had been showing Donald Trump with a commanding 15+% lead, others since the debate show a less than 5% lead (perhaps his George W. Bush attack did have ramifications). Senators Marco Rubio and Ted Cruz appear to be battling for 2nd and 3rd, though some polls have also shown Governors Jeb Bush and John Kasich with a potential shot at 3rd while Dr. Ben Carson has been languishing. Below are my predictions as well as what each candidate needs to achieve to consider the night a success.

 

Donald Trump: Trump is the national frontrunner and every candidate would trade places with him. Given all the polls showing him up 10+%, a loss in SC would be a major surprise and setback but not enough to totally derail his candidacy as he would still likely place well with numerous victories across the South on March 1. A win in SC would really solidify his standing and give him momentum to nearly run the table March 1 (it is hard to see him win TX at this point). My guess is the polls showing him up 15% are overstating things and he likely wins by about 10%. At that point, it very much becomes Trump’s race to lose with a chance to take a commanding delegate lead and a head of steam after the SEC Primary, though if the field narrows to 2 after the 15th all bets are off. I would expect Trump to win tomorrow with the operative question “by how much.” I guess 9%.

Marco Rubio: Rubio has seemingly rebounded from his NH debacle thanks to a strong ground game, solid debate performance, and key endorsements from Rep. Trey Gowdy, Sen. Tim Scott, and Gov. Nikki Haley. With that popular trio, Rubio should be finishing very strongly in SC, even if NH derailed the “3-2-1” strategy (now it’s the less catchy “3-5-2/3”). The Rubio/Cruz battle for 2nd/3rd is very close, but Rubio appears to be the candidate with the momentum. These endorsements have given Rubio the shot he has at 2nd but raise the bar for success. 2nd place leaves Rubio in a very good position to consolidate the “establishment” and “center-right” lanes, become the clear anti-Trump choice, and win a few states (perhaps NV?) before picking up Florida’s 99 delegates the 15th. A solid 3rd gives Rubio some momentum and still leaves him the clear choice in anti-Trump circles. The problem for Rubio would arise if he came in a weak 3rd (say 15%). If that’s all he can muster with the institutional support he has in SC, it will raise reasonable concerns about where Rubio can win. A weak showing could let Bush continue, siphoning off votes on March 1, while leaving the anti-Trump part of the party fractured. In the worst case, Rubio, without any SC momentum, goes winless on the 1st and 8th, leaving him vulnerable to losing to Trump in FL, ending his bid. My base case is 2nd for Rubio, but he has to perform tomorrow, if he drifts much below 17%, yellow lights will be flashing.  15% is my benchmark for failure, which is not my expectation.

Ted Cruz: Cruz like Rubio needs a strong showing, and while I see him in a close third, his fantastic ground game could still get him in 2nd. The fact is Cruz needs to crush it on March 1 because the map gets very unfavorable after that. He should win big in TX, which could net him 100-120 delegates, but he needs some wins elsewhere in the South to wrest the anti-establishment crown from Trump as places like MI, OH, MO, FL, WI are unlikely to be as favorable as AL, TN, OK, and GA. If Cruz can’t win in the South, it is unclear where he could thereafter. A bunch of second place finishes to Trump would give him plenty of delegates and a chance in a brokered convention but would leave him with a challenged path to winning outright. Cruz needs to walk out of SC with some momentum so that he can challenge Trump on March 1. A win certainly would do that but seems unlikely. 2nd also leaves him with a decent shot, though he will need a good week campaigning and solid debate performance to hold Trump back. A 3rd place finish leaves Cruz in a weakened position, and something closer to 15% than 20% would be very problematic (though that seems unlikely). For Cruz to have a credible shot at the nomination, he likely needs to be the delegate leader after March 1. A weak SC showing makes that tough to envision.

Jeb Bush: Bush needs a top three finish to justify continuing his campaign. Besides running low on cash at the campaign level, he may not have much of a choice about how much longer he continues. After making SC a make or break state and bringing in his brother to campaign for him, a loss to Rubio would be very disappointing and lead to even more of a donor exodus. If he can beat Rubio, Bush will be able to stick around, though it is unclear when Bush would actually be able to win a primary. Anyway at this point, 5th place is likelier than 3rd. With money drying up and no momentum, Bush’s campaign will probably be done after SC, though he may take a shot at NV hoping to hit the proverbial jackpot. If he sticks around despite a poor finish, it will be nothing but a vanity effort with Bush too hobbled to have any credible chance at the nomination.

John Kasich: Kasich probably has the lowest bar of any candidate tomorrow as South Carolina has never seemed like a perfect fit, especially given the time and money Rubio and Bush have devoted to the state (full disclosure: I have donated to the Kasich campaign). I would look for Kasich to finish 5th, and it would be helpful for him to get to double digits to keep some of his NH momentum. Surpassing Bush, an outside possibility, would also help him in the expectations game. Kasich retains a narrow path to the nomination that doesn’t change much based on SC: use March 15 (a huge win in OH, strong showings/wins in MO and IL) to consolidate anti-Trump and start a big winning streak. That likely requires winning or a strong 2nd in Michigan on the 8th. To do that, I would argue he must show some viability on March 1, probably by winning or coming in 2nd in VT, MA, and maybe VA. It is a narrow path, and SC won’t derail it, but a finish above Jeb would be beneficial. One thing to watch for is a possible Governor Christie endorsement before March 1, which could bring other Governors (like MA’s Charlie Baker) on board and help Kasich score a better than expected showing on the 1st.

Ben Carson: There just is no plausible path for Carson to be the Republican nominee, and I would expect a 6th place finish, though thanks to committed supporters, there is an outside chance he sneaks into 5th. Ben Carson really seems to be this cycle’s Fred Thompson. In 2008, Thompson, who had no shot, stayed in through SC to pull votes from Huckabee and help his friend, John McCain win the state. It feels like Carson is sticking around to take votes away from Cruz, whose campaign spread a rumor he was dropping out in Iowa. By pulling over 5%, Carson does make Cruz’s life tougher, thereby helping Trump. Carson may stick around through March 1st, but if he does, it will only serve to hurt Cruz.

Ultimately, Cruz and Rubio are in somewhat precarious positions. Both need to exit SC with momentum to gain ownership of their lane. Strong showings put them in good positions to take on Trump, but weak showings could cripple them. I’m going to guess Rubio bests Cruz but both achieve what they need to. For Trump, a win solidifies his status as frontrunner, particularly if he can make it double-digits, but even a shocking loss leaves him with a path. Jeb is all but done, but Rubio needs to put him away. Carson is merely playing spoiler. Perhaps more than a strong performance of his own, Kasich is rooting for a bit softer Rubio performance to delay the consolidation of the establishment lane, making his narrow path a bit more plausible.

Of course, if these predictions are proven wrong in 24 hours, I will deny having given them. That does seem to work for our frontrunner after all…

If you like what you read, follow me on Twitter too!

Despite Cost and Blunders, GOP should stand firm on Scalia Replacement

In the aftermath of Justice Antonin Scalia’s passing, it can feel a bit crass discussing the political fallout; after all, he was a husband, father, and grand-father whose family is in mourning. However given the current balance of the court and titanic influence he leaves on legal thinking, the fact is we are entering one of most significant political battles in years, and while Senate Republicans have already made a tactical blunder, they must hold firm.

Whether you agree with his jurisprudence or not, it is indisputable that Scalia leaves behind a tremendous legal legacy. In 30 years on the court, he re-energized the textualist movement with harsh, impeccably worded dissents, groundbreaking majority opinions (ie Heller), and the occasional surprise (ie Emp Div HR OR v. Smith). Scalia is the father of much conservative legal thought, which makes the fight over his successor all the fiercer. On top of this, the Court now has 4 liberals and 4 conservatives (3 if you count Kennedy as a centrist). This means that the cases in which the Conservative wing would have prevailed 5-4 are now deadlocked 4-4. A liberal Obama Justice could feasibly swing the court to the left for years, guaranteeing the stability of Roe while endangering recent precedent on campaign finance, gun rights, and more.

Given the stakes, Senate Republicans must be very careful in how they proceed. Scalia’s death comes at an odd time. Had a vacancy arisen 5 months ago, the “lame duck” argument would be very weak, and the Senate would have been compelled to confirm a qualified nominee (elections do have consequences). If a vacancy had arisen 6 months from now, the decision not to act on a nomine would be on exceedingly firm ground as Obama would be a truly lame duck with an election right around the corner. Now, the timing of 9 months prior to the election gives credence to both arguments on whether to act or not (Kennedy in 1988 provides precedent to act while Fortas in 1968 is precedent not to act). Ultimately, this is really a new situation, unless you deem how congresses acted 50, 80, or 150 years ago to be very relevant to the present day.

With the court so evenly split, the GOP should likely delay, but the politics are bad. Republicans have only worsened the situation as well. On Saturday, Majority Leader Mitch McConnell said, “this vacancy should not be filled until we have a new president.” The Senate will not move on an Obama nominee, and the GOP almost certainly has the votes to sustain any filibuster. With 54 seats, they would have to suffer 14 defections, which is almost unthinkable, especially with vulnerable Senators up for re-election like Pat Toomey and Kelly Ayotte currently backing McConnell’s position. While the GOP should delay this until the next President, the way they are going about it is a mistake.

Republicans should have waited for Obama to formally nominate someone and then found specific reasons to oppose that candidate. Now, any specific criticisms can more easily be written off as an after the fact rationale from a bunch of obstructionists. Announcing opposition now is akin to shooting first, asking questions later. It is almost certain that the Obama nominee (whether it be Loretta Lynch, Sri Srinivasan, or someone else) will have enough flaws to justify delaying confirmation until the next President, and under the miniscule chance Obama makes a consensus choice, that nominee would deserve a fair hearing. In an effort to appease the Ted Cruz kamikaze wing of the party, McConnell has made it easier for democrats to label republicans as obstructionists and sway independents in the 2016 election.

In all likelihood, this political fight will have a limited impact on the 2016 election, but if anything, it hurts republicans. That said it can be worth losing political points when waging an important fight. The fact is few voters ever cite the nomination of Supreme Court justices as their most important issue (even though this power is one of the President’s greatest), and that is unlikely to change. It is hard to imagine more than 10% of Americans seeing this as their top issue, and such voters are likely high propensity, partisan ones. This is to say that they likely vote anyway and are not persuadable. On the margin, some democrat and some republican voters may be more energized, but they would have voted anyway. Scalia’s death may energize some voters, but it won’t swing the outcome in any meaningful way. However, this fight will make it easier for democrats to make the obstructionist argument (particularly if Ted Cruz become the nominee), which on the margins could swing some independents to the democrats. The Supreme Court does not work as a stand-alone issue to sway independents, but it can be used as part of a broader narrative against republicans. In particular, if Ayotte, Toomey, and Johnson get weak-kneed, that is a sign the political cost of this fight is growing.

Obama has every right to nominate someone, and the GOP should hold hearings for that nominee. However, there should not be hesitation to oppose him or her and keep that person off the bench given the high stakes of this vote in a divided court. The GOP should’ve waited for the nomination announcement to come out in opposition to avoid the “blind obstructionist” label, but that is water under the bridge at this point. With the Supreme Court in the balance, this is a fight worth having, even if there is a slight political price to be paid.

Justice Scalia’s guiding philosophy was driven by the goal of making the text of the law pre-eminent so that who the presiding Jude is does not matter. It is a sad twist of irony then how much of a fight there will be over who succeeds him. Equally, one is left to question the fragility of our republic that the death of one Judge can have such earth-shattering (partisans might say cataclysmic or bountiful) consequences.

 

If you like what you read, follow me on Twitter too!

New Hampshire Takeaways

On Tuesday, the people of New Hampshire delivered Donald Trump a seismic victory, winning 100,000 votes and more than doubling anyone else in the field with 35% of the vote. After his disappointment in Iowa, this was the type of victory Trump needed to indisputably maintain the title of “frontrunner.” After that, John Kasich, who staked his campaign on New Hampshire, showed hard work (and 100+ town halls) pays off with a solid 2nd at 16% (Full disclosure: I’ve donated to the Kasich campaign). Ted Cruz came in 3rd with 11.7%, Jeb Bush in 4th at 11%, and Marco Rubio a disappointing 5th with 10.6%. After their poor showings, Chris Christie and Carly Fiorina dropped out while Ben Carson will make a stand in South Carolina, if only to spite Cruz. Below are some takeaways from NH.

As an aside, my predictions were pretty mixed. While I was right 3rd-5th would be close, I did botch the order:

  1. This was a Trump mandate. He’s the frontrunner.

Trump won voters in every age group by double-digits, with every amount of education, winning even 33% of those with college degrees, every income bracket, and in every ideological bucket from very conservative to moderate. For all the talk of his limited appeal, Trump was the most acceptable candidate to every faction of the state. Yes, 35% is far short of 51%, but in a multi-candidate field like this, getting past 50% is a herculean if not downright impossible feat. Yes, the working and middle class are the backbone of Trump’s support, but clearly, Trumpism permeates beyond these precincts.

Plus, those people hoping Trump supporters wouldn’t vote look foolish. The caucus system undoubtedly hurt Trump disproportionately, but in a primary, he gets his people out. Trump likely has a double digit lead in South Carolina and poised for a “yuge” performance on March 1. The next two weeks will be brutal, and we will see if he can withstand an onslaught of attacks (as well as whether he will really loosen the purse strings to fight back on the airwaves). Trump has a built an impressive, broad coalition that leaves him with the best position in the race. If he can hold on in SC, he will be tough to beat. Some in the establishment will continue to downplay Trump; they are kidding themselves.

  1. Ted Cruz is also in an enviable position.

Cruz got a solid 3rd in NH by holding to his core of conservatives, and besting Bush and Rubio was a nice coup given how little time he spent in the Granite State. With its large number of evangelical voters, South Carolina should be hospitable to Cruz. March 1 is setting up to be a battle between Trump and Cruz, so winning SC will be a key test to build momentum into those contests. Cruz is behind today in SC, but with a strong debate performance on Saturday and massive volunteer network, he could consolidate the right pole of the party and make a real run at Trump. Expect the Cruz-Trump feud to be brutal, and Rubio will likely go after Cruz to try and gain some ground as well.

Cruz will also need to push down Carson whose voters would likely gravitate to Cruz as a second choice. Carson may play the role of Fred Thompson who in 2008 stayed in and peeled off enough voters to keep Mike Huckabee from surpassing John McCain. Cruz is this cycle’s Huckabee with Trump McCain. If Cruz can close the gap here, he is well positioned across the South on March 1, which he will need to propel himself into less hospitable Midwest and Northeast states. Apart from Trump, Cruz is in the best place.

  1. I’d still rather be Marco Rubio than Jeb Bush

Rubio was in a position to coalesce the center right with a 2nd place showing in NH; instead, that terrible debate sent him reeling down to 5th. That is a major setback, but this is not fatal for Rubio. Rubio is still flush with cash and is broadly acceptable to wide swaths of the party. Losing to Bush is a clear negative, but let’s keep perspective. Bush spent over $30 million and weeks in the state, both multiples of Rubio. For his efforts, he got 4th place and bested Rubio by about 0.5% or around 1,000 votes. This comes a week after Rubio beat Bush by nearly 20% in Iowa. The media got too excited after Rubio’s Iowa finish and is now too downbeat about New Hampshire. Bush, the former frontrunner with $100 million plus in donations, has managed 6th and 4th. That’s…not good.

Bush will make his stand in SC, hoping his brother’s presence on the trail can bail him out, but Bush fatigue is a real phenomenon, and Trump has totally emasculated the Florida Governor. Bush is also highly unlikely to do to Rubio at the debate what Christie did. Some Bush donors seemed ready to capitulate to Rubio a week ago, and now a few Rubio donors appear ready to capitulate to Bush. This is less the sign of a major realignment than a sign of how fickle and panicky members of the establishment and donor class are. Rubio and Bush is a battle of new and old both between them and the surrogates (Senator Scott vs. Graham). Rubio is more acceptable to more voters whereas Bush likely has a very real ceiling due to familial baggage. If Rubio delivers a great debate (and as Gingrich showed in 2012, debates matter in SC), the NH fiasco will be forgotten. 1,000 people in New Hampshire didn’t change a weeks-long dynamic. Rubio is far more likely to be the nominee than Bush; he’s just given Bush more cover to pursue this failed campaign for longer.

  1. John Kasich has a path, albeit a narrow one

With less money and a lower name ID, Kasich has a narrower path to the nomination. Despite his record of balancing budgets, his Medicaid decision has elicited skepticism among some on the right. Kasich will need to stick to his unique, optimistic message to set him apart in the race while pointing to his record at the Federal and State levels to improve numbers with conservatives. Either way, South Carolina and March 1 Southern states are unlikely to be a region of strength. He needs to find a way to stay relevant, raise money, and build an organization in Michigan, which votes on March 8 and should be more hospitable to him. A win there could catapult him to a huge night on March 15 when he should easily carry Ohio and its 66 delegates and hopefully do very well in Missouri and Illinois. Doing well could set him for a big April when Northeast and Midwest states continue to vote.

The challenge for Kasich is appearing viable on March 8, so that he can win or do extremely well in Michigan. That means winning somewhere before then, probably on March 1 when VT and MA vote in addition to the South. MN and VA could also be fertile territory. Some wins in these states, plus a surprising showing in a state like Alabama (where the governor has endorsed him) will make Kasich appear viable and give him a shot at running the table in the Midwest to make a late run for the nomination. Is this an easy path? No, it requires a lot going right on March 1, 8, and 15, but it isn’t impossible, especially if Rubio and Bush keep attacking each other, driving up their unfavorable while Kasich continues to stay above the fray.

  1. Contested convention odds have risen but remain remote

A contested convention is still unlikely in my opinion, but Trump is not going away and Rubio has failed to coalesce the center right. Add in all the proportional states, and no one could get to 1,236 delegates. This also positions someone like Kasich to be a potential kingmaker simply by having Ohio’s 66 delegates. Ultimately, I expect the field to narrow, most likely after the 15th to 2 or 3 viable candidates with one getting enough momentum to win. However, NH has prolonged the thinning of the field while giving Bush more reason to hang on. This leaves the potential for Trump to stay in the 30%’s, get a chunk of delegates, Cruz to win the core right, and Kasich/Rubio/Bush to split the rest. That would cause chaos, leave the party fractured, and the nominee weakened in the General. The odds are still well below 10% in my estimation but they are higher than 72 hours ago.

With that, here’s how I would peg the odds after New Hampshire. Trump a clear favorite with Rubio down but not out while Bush and Kasich are a ways behind. However, as NH showed, voters can do surprising thing. The fun has only just begun.

odds

If you like what you read, follow me on Twitter too!

 

New Hampshire Primary: Predictions and Thoughts

After a seeming eternity between Iowa and the first in the nation primary, the New Hampshire primary is upon us. Below is a quick set of predictions as well as a breakdown of what each candidate needs to achieve to stay viable as we move south to South Carolina and later the SEC Primary on March 1.

New Hampshire polling is notoriously unreliable, but given what we know, I would expect Donald Trump to win, though probably underperform his polling average. With a decent debate, Trump was able to stop the bleeding after Iowa and looks poised to win (thanks in no small part to Marco Rubio’s disastrous response to Chris Christie at the debate, which likely slowed whatever momentum he had). Slots 2-5 are incredibly volatile and could plausibly break any way; the rankings here are the most likely source of surprise and drama on election night. With a strong ground game and late momentum, John Kasich seems the favorite to come in second (Full disclosure: I have donated to the Kasich campaign), and I would look for Rubio to come in third, followed by Cruz then Bush. With independents making up ~40% of the electorate, and a similar number still open to switching candidates, each candidate could easily swing several percent, making this race for 2-5 very unstable. That is how I see it, but we could easily see different results. However with Kasich, Bush, Rubio, and Christie running solidly, it is hard to see anyone surpassing Trump, even if he comes in closer to 20% than 30%.

What each candidate needs:

Donald Trump: Trump needs a victory, simple as that. After the stinging loss in Iowa, the frontrunner can’t afford a second loss, especially when every poll shows him up 10% or more. Another loss would remove his aura of invincibility and leave him mortally wounded into South Carolina. Fortunately for Trump, it looks like he will get the victory he needs, giving him momentum as we head towards friendly territory down South. With an NH win in hand, Trump would continue to be the national frontrunner and would also be the favorite for the South Carolina primary the 20th (plenty of time for Cruz or Rubio to make a move).

John Kasich: To have a path forward, Kasich needs either a second place finish or very strong third given the 100+ town halls he has done in NH. Kasich has improved as a candidate but still has low national numbers and faces skepticism from the conservative wing. He needs a strong NH finish to raise money, build out his team, and get support in other states. If he can’t manage a strong third, these resources won’t be coming, and dropping out is a distinct possibility. Should he get the finish I expect, Kasich will have a path forward, though many states are not as clearly hospitable to him in the near term, and he needs to find a way to maintain momentum and amass delegates between now and Ohio on March 15 (when he should win the winner take all 66 delegates). That probably means getting to double digits in SC, and on March 1 doing very well in MA, VA, ME, and VT (which should be favorable to his message) while having solid showings in MS and AL where endorsements should help. Michigan on the 8th would also seem key to the Kasich strategy. It is a narrow, but doable path into OH, but it all starts with a strong finish in NH as a pre-condition.

Marco Rubio: Rubio really needs a second or strong third finish. After Iowa, second seemed within reach (if not a shot at first place), but the debate took some wind out of his sails. Second place would help monopolize establishment support, but a strong third still leaves Rubio with the best shot of unifying the establishment wing. Losing to Cruz or Bush as well as Kasich would jeopardize this and likely leave the establishment scattered for longer. Second is still possible, but anything below third would be a real disappointment for the Senator. With 3rd in hand, Rubio is in solid shape for South Carolina and Nevada (where he should win), though the Southern tilt on March 1 is not friendly. Rubio would benefit from both Cruz and Trump splitting the vote, opening the door to some Rubio upsets. With high favorables and broadly acceptable, he is a near-certain finalist for the nomination.

Ted Cruz: Cruz doesn’t need anything from NH; with only 22% of the electorate evangelical, it isn’t a good fit. As such, there is only upside. If he somehow finishes ahead of Rubio, that would do real damage to the Florida Senator’s campaign. Still, a showing north of 10% would be respectable for the Iowa winner and leave him in good shape for South Carolina. Cruz will be facing off against Trump for dominance in the South as each try to corner the anti-establishment lane. Cruz continues to be very well positioned for a prolonged delegate battle.

Jeb Bush: I remain incredibly bearish on Bush’s prospects, failing to see a path to the nomination for Jeb. His Bush name and low-energy demeanor are insurmountable hurdles this cycle in my estimation. Still, he has enough cash and the apparently the will to fight through South Carolina, and this race to stop Rubio seems increasingly personal for him. Given the time and resources the once-crowned frontrunner devoted to NH, Bush really needs to finish ahead of one of Kasich and Rubio to have a reasonable rationale forward, but a failure to achieve this is unlikely to deter Bush, though another poor showing there might mark the end of this underwhelming campaign.

Chris Christie: While Christie did damage to Rubio at the debate, it is unclear if he convinced voters to pull the lever for Christie on Election Day. Christie still seems mired in the single-digits despite spending almost all of his time in NH. To be remotely plausible, he really needs a top 4 finish, but 6th place seems more likely. If Rubio does poorly, he may try to carry on, but low on cash and with a weak result in a state he focused so much on, that effort would seem futile. Christie dropping out to endorse another Governor is a distinct possibility, and if Christie wants a Governor not a Senator to be the nominee (which seems to be the case), that is his best path forward.

Carly Fiorina: Apart from a brief bump in August after her debate performance, Fiorina has struggled to gain traction and is unlikely to make a move tonight. With cash running low and options lower, pulling out doesn’t seem out of the cards. If she carries on, she is unlikely to be a major factor. She has proven to be an adept debater and excellent at taking on Hillary Clinton, meaning she will be a useful surrogate in the General Election, and potentially a Cabinet appointee.

Ben Carson: NH is not favorable for Carson with its small share of evangelicals, and he did not campaign hard here. Having burnt through so much money and with questionable knowledge of foreign affairs, Carson has no plausible path to the nomination, and NH won’t change that. However, Carson has a devoted following, mainly among evangelicals. In Southern states, he could still pull towards 10%, mainly from Ted Cruz, making him a powerful spoiler. Carson seems intent on carrying on, if only to block Cruz after the Iowa controversy, and he can siphon off votes in South Carolina and on March 1.

 

So, that’s how I see NH. Given this perspective, here is how I see each candidate’s odds at getting the nomination before we see the NH results. Trump, Cruz, and Rubio are functionally co-frontrunners (I give Trump a slight edge given better national numbers and a likely win in NH, but a surprise loss would change this dramatically). Among the Governors, Kasich is top simply because he is most likely to have a big night in NH.

odds

If you like what you read, follow me on Twitter too!

Iowa Thoughts and Implications

Finally after months of polling and debates, voters actually entered the process with Senator Ted Cruz delivering a bit of a surprise by defeating Donald Trump while Senator Marco Rubio came in a solid 3rd. As you can see from my tweet below, I both underestimated Rubio’s strength (he finished at 23%) and mixed up Trump and Cruz. With these results in hand, I’ve also adjusted my nomination probabilities with Rubio taking a slight lead over Trump and Cruz. Pre-Iowa, Trump sat at 45%, which reflected a 50/50 chance he would win the caucus, meaning his win probability was bound to move sizably one way or the other. Given his finish, his probability had to move lower while Cruz now has a clear path through the March 1 SEC Primary and Rubio is well positioned to consolidate “establishment” support. Below are some retrospective and prospective takeaways from Iowa.

odds.png

The retrospectives:

  1. Fundamentals matter: Trump tried to ignore the basic tenets of an Iowa campaign, forgoing a sizable ground game or paid media until the closing weeks whereas Cruz amassed a volunteer army and ultimately did a superior job of translating his support to votes. Trump is a unique candidate for sure but is not immune to political realities.
  2. Trump should’ve done the debate: Trump lost late-deciders 2 to 1 to Rubio, and his failure to attend the FOX debate is likely culpable for this deficit. Sure, he could’ve bombed at the debate and done equally poor with late deciders, but since he lost when skipping the debate, he had nothing to lose by showing up. A mistake.
  3. Bush and Christie wasted their time. Both men spent some time, which is a limited resource for all candidates, and money in Iowa but had nothing to show for it, finishing at 3% and 2%, no better than Kasich who eschewed Iowa to focus on New Hampshire. These two should have just focused on New Hampshire as well. Half-hearted campaigning in Iowa never works.
  4. Peak at the right moment. Marco Rubio soared the final week, which helped him exceed expectations and generate a positive media narrative. Had the caucus been last Monday, he would not have fared as well. Life and politics is all about timing.
  5. There are many anti-Trump voters. Turnout surged to 185k, which I would’ve guessed carried Trump to victory. While Trump brought many supporters into the process, he also seemed to bring detractors into it with Rubio and Cruz getting more votes than any previous Iowa winner. The intensity of opinions, both for and against Trump, means high turnout does not necessarily help Trump.
  6. Trump’s ego and big bet cost him. Iowa was never a good fit for Trump given its caucus structure and evangelical core. He could’ve credibly downplayed Iowa and focused on New Hampshire, perhaps only paying attention the final week to secure a stronger 2nd place finish and get a positive media story (a la Rubio). Instead, Trump’s winner take all attitude took hold and he went all-out to win an unfriendly state while publicly raising expectations, which backfired, leaving him more wounded than had he downplayed its importance. Now had he won Iowa, he would be the overwhelming favorite with a real chance of functionally running the table, so Trump decided to place a big bet on Iowa. That is understandable, but it didn’t work out, wounding the national frontrunner.

Prospective views:

  1. New Hampshire is make or break for Trump. Losing Iowa is not fatal for Trump given a 20% lead in New Hampshire (though it will likely shrink), and both Hillary Clinton and John McCain bounced back here after weak 2008 Iowa showings. With the establishment lane likely to stay somewhat divided next Tuesday, Trump should be able to prevail here even if his support dips below the current 30-35% level in the polls. NH is basically must win for Trump though. To lose this state given his current lead would seriously damage his narrative and could cause his voters in South Carolina to consider Cruz. While Trump could fight beyond NH should he lose, he would likely be a mortally wounded candidate with declining support. Conversely if he holds on, Trump will have a win on the board and some momentum headed into South Carolina and the South on March 1, which seem hospitable to him. Candidates inevitably face adversity, and this is Trump’s key test. His concession speech last night was gracious and suggests he is ready for the test. If he can pass it, Trump could exit New Hampshire in strong position. At this point, I think Trump is the clear favorite in New Hampshire.
  2. Rubio vs. the Governors. Bush, Kasich, and Christie will be going hard against Rubio who has a chance to consolidate the establishment lane in NH and get a strong second showing. The four are a combined 40-45% in most polls, so if Rubio could push their combined support down to 20%, he has a path to 25%, which should be good for a strong second place showing. The governors won’t go down without a fight and will likely focus on Rubio’s lack of experience, policy shifts, and lack of time in NH campaigning. Saturday’s debate will also be fierce. Christie is already fading, and Rubio is positioned to take many Bush supporters. Kasich supporters have a more independent bend and could prove stickier. Of the three governors, Kasich seems best positioned to fight Rubio for top of the establishment lane in NH. At this point, it seems likely Christie will drop out after NH, Kasich will barring a 2nd place or strong 3rd place finish, and Bush seems determined to stick it out through South Carolina despite his unviability. (NB: I have donated to the Kasich campaign)
  3. Rubio may want a Trump victory. Let’s say Trump implodes, leaving Rubio and Cruz as the two main remaining contenders. That would probably translate to a romp on March 1 when the South votes with a good chance Cruz could nearly sweep, especially with his large cash balance and strong organization. Cruz is simply a better fit for the South than Rubio and could rattle off numerous 60-40% victories that night. While the delegates are proportional keeping Rubio close, Cruz could have a head of steam that gives him momentum when less hospitable states start voting March 15 and later, propelling him to upset victories. While Rubio could fight it out for a while, Cruz’s momentum could leave a Rubio charge coming up short. However if Trump wins NH, he would be viable on March 1, likely splitting the vote with Cruz. This could lead to numerous victors and help Rubio carry some states in the SEC. Suddenly, Cruz would not have the same momentum, and when March 15 rolls around, Rubio would be positioned for a bigger night, and buoyed by Florida’s 99 delegates, on a cleaner path to the majority. It is hard to argue that winning NH is bad for Rubio, but he could still be very well/better positioned should he finish 2nd to Trump. The presence of both Santorum and Gingrich helped Romney; the same could be said of Trump and Cruz for Rubio (though Trump and Cruz are more formidable and Rubio has wider appeal than Romney).
  4. Rubio is the frontrunner. The establishment hates Cruz, and Trump’s favorability numbers are not great. Meanwhile, Rubio is well positioned to consolidate the establishment (not that the term means much) lane with a strong NH finish. Rubio has the momentum to force Christie out after NH, and while Jeb is not viable, he will likely stick it out until South Carolina. Kasich voters could prove tougher to cannibalize this week, and Kasich could play well in the Upper Midwest if he shows well in NH, the one thorn in Rubio’s side. Otherwise, Rubio appears the most acceptable candidate to the broadest swath of the party. While Cruz and Trump may be dividing and conquering, Rubio has a path to sneak by them by March 15, by consolidating the establishment lanes and holding close on March 1. If he can do that, the map becomes quite favorable. It is still early and very uncertain, but I would prefer to be in Rubio’s position than anyone else’s.

If you like what you read, follow me on Twitter too!

National Review’s Useless, Misguided War on Trump

On Thursday night, National Review launched a broadside on Republican frontrunner Donald Trump, urging voters to shun him, and the editors solicited editorials from 22 prominent conservative personalities doing the same. The editorials range from well-reasoned critiques to unhinged attacks, culminating in this final take from the editors: “Donald Trump is a menace to American conservatism who would take the work of generations and trample it underfoot in behalf of a populism as heedless and crude as the Donald himself.” Sadly, these editorials are little more than a shout into the anti-Trump echo chamber rather than being a compelling argument to current Trump supporters that they should support someone else. All this does is allow members of a pundit class which too often criticizes rather than offer solutions (criticizing is far easier) to feel comfortable that at least they “warned the base” while staring aghast at the popular will of voters (at least according to current public polling).

For years, conservatives have rightly lambasted liberal media bias because straight news should be delivered without opinion and opinion pieces should be fair and rooted in reality (ie just because a piece is “opinion” does not make the use of misleading statistics to validate a point justified). However, we must apply the same scrutiny to biases we agree with as with bias we disagree with it. On this account, hypocrisy (on both sides) run rampant because it is easier to forgive the missteps of kindred souls. Sadly, personal dislike towards the subject can lower the quality of discourse, and on this count, it does feel like authors of this “National Review Symposium” are suffering a bit from Trump Derangement Syndrome, letting personal animus bleed into their writings, causing them to overstate their case and the danger Trump poses.

I am no Trump supporter and am extremely unlikely to vote for him in a primary (though at this stage, I would support him in a general election vs. Hillary Clinton), but I still feel like we should be fair to him. It is increasingly difficult to find such analysis; there is merely hate and love, few rational pieces. My main sticking point with Trump is his “Muslim ban,” which to me manages to be impractical, irrational, and immoral, but one can feel that way while agreeing with him that politicians are beholden to the donor class. changed his mind. Any voter is free to find these answers unsatisfactory and choose someone else; however, I question the sweeping argument that those “new” to conservatism are unfit to lead it. With the standard caveat that Trump is no Ronald Reagan, the fact is Reagan was an FDR-supporting, New Deal Democrat who left the party in 1962 and ran as a conservative for California Governor in 1966. Based on the arguments in the symposium, it seems the writers would have opposed Reagan in 1966, questioning his sincerity. In fact, I hope they would have; otherwise, they would be holding Trump to a different standard, which is unfair. As Reagan showed though, sometimes betting on a new face can work very well.

Voting for Trump is definitely a wager, given his flip-flops, but he is not alone on this account. Rubio and Cruz are first-term Senators (like Obama) with no major accomplishments in the Senate—voting for them is clearly a gamble. Jeb Bush hasn’t held office for a decade and is comically inept at making an argument. An effective user of the bully pulpit he would not be. Christie’s second term has left much to be desired. In my estimation, Kasich has the strongest record, though some will question his Medicaid expansion (full disclosure: I have donated to the Kasich campaign). Candidates are human beings; they will be flawed. Voters must decide what assets they seek and what flaws are acceptable. It is easy to oppose candidates by focusing on the flaws, which is what National Review did on Trump. Did the writers have the willingness to stand together and support someone else? Of course not. That’d be hard.

Much of the attack on Trump continues to center around his populism, which just boggles the mind. If a candidate isn’t focused on improving the lives of working people and middle class, why are they running? Rather than attack Trump personally, which will merely cause his supporters to tune out, we should embrace his populist focus but argue that different solutions will help Americans more. For instance, a bigger EITC and more progressive code would be a more effective tax plan than Trump’s. On this front, the symposium comes up woefully short. Trump plans are attacked but alternative are not offered. What’s the point of this? Even if Trump’s plans stink, what’s to say others have better plans? After all, Cruz’s European VAT plan is seemingly designed to hurt workers to the benefit of corporations and their owners (read: donors). All we hear from most candidates is a rehash of 1980 economic policy as though the problems have not changed since then. Trump is one of the few to be intellectually honest enough to suggest we try some different policies.

In particular, they signal out Trump’s trade rhetoric, and while not all of his China claims are backed by fact, toughness with China and the threat of some trade restrictions are not inherently anti-conservative. Chinese companies steal our intellectual property, often don’t pay what they owe American companies, get state sponsorship, and the government hacks into our companies to steal trade secrets. While we focus on the currency that is the least egregious thing China does. Should we ignore these actions, which have hurt American workers, in the name of free trade? That seems asinine. Ultimately, the President’s job is to better the country. Heck, even Reagan expanded farm subsidies for exports to the Soviet Union to help U.S. farmers. The rise of China has greatly lowered U.S. inflation, thereby increasing growth indirectly by boosting our purchasing power, but it has not driven much growth directly. Unless, the other country plays fair, free trade for the sake of it isn’t wise or good for the public. That does not mean a 45% tariff is the right policy response, just that mindlessly supporting free trade is neither conservative nor good policy.

Absolute rigidity is a sign of intellectual smallness not of adherence to principles. Opposing the bank bailouts of 2008 (which turned a profit, mind you) is not conservative; they saved this country from Depression. They are one of the few economic policies for which George Bush deserves praise. To criticize Trump for supporting them is laughable. Maybe letting the financial system implode is theoretically conservative, but how is ruining the lives of 100 million people the right thing to do? Again, it is easy to shout from the bleachers when you don’t have to solve the mess transpiring on the field.

Trump is the only leading candidate who consistently speaks to the needs of the middle and working class, demographics the GOP desperately needs to do better with, and there is a greater battle in conservativism here. While Trump is out of the orthodoxy on many issues, many “conservative” intellectuals and politicians have abandoned conservative’s populist roots over the past 15 years, focusing too much on top marginal tax rates, defending things like the carried interest loophole, and emphasizing the elimination of the estate tax. Fundamentally, conservatism is rooted in an optimism of the capacity of ordinary people, which is why we prefer to leave them with power rather than hoard the power among a band of so-called experts within government. In some circles, this optimism in the public has morphed into a simple disdain for government and emphasis on total adherence to principles.

There is a greater war within conservatism between the doctrinaire elites (think George Will) and the pragmatic populists (think Bill O’Reilly), and this National Review-Trump feud is just the latest battle. Trump is an imperfect vessel for his side but the sneering of NRO won’t sway anyone, just entrench both sides further. Being a doctrinaire is easy when on the sidelines critiquing those in the arena, but the fact remains that at the federal level, establishment conservatives and liberals have failed for 15 years to help the middle class. America does its best when pragmatic populists like Reagan lead it, and we should hope this side wins the war for conservatism.

At least Trump is emphasizing the needs of workers. That’s more than most candidates can say. Let’s embrace his focus, prove to those making under $50,000 that conservatives actually care about them (which we have failed to do), and offer different, compelling solutions. What the National Review did surely helped to stroke egos, but it didn’t boost the discourse. It’s high time we realize conservatism’s failures post-Reagan have created Trump. He’s a reminder we’ve lost our way. Directing our ire at him is a waste of time, direct it at the leaders (ie George W Bush), pundits (George Will), and rent-seeking donors whose intellectual rigidity and outdated policies have failed.

Median wages are lower than 15 years ago. Unlike Trump, that is actually something to be embarrassed about and have an emergency symposium on.

If you like what you read, follow me on Twitter too!

The GOP Establishment Has Itself and George Bush to Blame for Trump’s Rise

With each passing day, it appears to be increasingly likely Donald Trump captures the Republican nomination given his committed base, strong national numbers, a lead in New Hampshire that is insurmountable so long as “establishment” candidates like Marco Rubio, Jeb Bush, John Kasich, and Chris Christie split the vote, and a Teflon-like insulation from his own statements. From George Will declaring a Trump nomination could be the end of the Party to discussions of an anti-Trump PAC, the establishment is up in arms over Trump’s rise and seems to be blaming the base for his success: supporters are falling for a cult of personality, they’re unsophisticated, just looking for a loud candidate, and so on.

I too am a Republican who is no Trump supporter but am tiring of the establishment’s blame game. If they want someone to blame, they should try looking in the mirror lest we forget how Trump was treated in 2012. Rather than ignoring him as a fringe figure, Mitt Romney gladly visited the Trump International Hotel in Las Vegas to receive his endorsement in person. Plus, Romney originally planned to have Trump make an appearance at the Convention, only to be cancelled due to a Hurricane. Rather than ignore Trump, the Party decided to embrace and therefore legitimize Trump. If Trump is to be considered a monster, then Romney and the establishment are Dr. Frankenstein. They’ve lost control of their creation (as though they ever had control), and he’s turning out to be quite popular with the villagers.

The establishment’s blame goes beyond the actions in 2012 and is more fundamental. The Republican Party has a George W. Bush problem, and his economic record is partly responsible for Trump. The establishment has yet to come to grips with the economic failings of Bush’s Presidency, which left the working and middle class in worse shape.

The core of Trump’s support comes from working people. For instance, the latest national CNN poll showed Trump with 42% among those earnings under $50k and 46% among those who did not graduate college. The CNN poll is consistent with other national polling. Blue collar workers have clearly gravitated towards Trump.

Now, I am no defender of Barack Obama’s economic policies, and GDP growth during this recovery has been slower than under President Clinton or Reagan. Like many Americans, I blame subpar growth on Obama’s tax and regulatory policies, and the facts are that while job growth has been solid, real median incomes have fallen to $53,657 in 2014 from $55,313 in 2008, per the Census Department. Additionally, in December 2008, America had 12.9 million manufacturing jobs. As of November 2015, that number is 12.3 million, according to the Bureau of Labor Statistics.

For many Americans, the state of the economy is still fragile, and angst remains. Unease with Obama policies could explain why voters are seeking change, which would imply more support for Republicans, but it does not explain why so many voters are totally ignoring establishment choices in favor of someone as unorthodox as Trump. It is here where Bush comes in.

On the positive side, under President Bush, we enjoyed nearly 3 consecutive years of unemployment at 5% or less, roughly full employment. However, the Bush economy was not great for everyone. GDP growth averaged a meager 2.1% during his two terms, and the middle class did not enjoy much of this growth. Just as under Obama, real median incomes fell under Bush, from $57,724 in 2000 to $55,313 in 2008. Even more importantly to understand the Trump phenomenon is the decline in manufacturing employment, from 17.2 million in December 2000 to 12.9 million in December 2008. Of course, millions lost homes in a financial crisis for which Bush bears some responsibility. The political establishment of both parties have failed working and middle class Americans for at least fifteen years now.

Unsurprisingly, republican voters are willing to look outside the establishment, which has failed them economically for years. Moreover, the establishment, by focusing all of its ire on Obama, has not reached out to workers in a compelling fashion to explain how the GOP can make the economy work for them. While he may be selling a false bill of goods (what makes for good politics is not necessarily good or plausible policy), Trump has made a clear and simple case to workers, essentially: you’ve been screwed by incompetent politicians who work for donors not you, who negotiate terrible trade deals with China, and who have let illegal immigrants undercut wages whereas I will work for you and bring back your jobs. Let’s be honest, if you’re a white guy working in manufacturing, it has probably been a tough decade, and this pitch is compelling.

At the very least, Trump is making an overt effort to show he cares about the middle class, something other candidates and the establishment at large have been unable to do. Rather than recognizing the problems of today differ from 1980, we often reflexively revert to Reaganism (perhaps because Bush policies didn’t work so well). Some, like Carson, push flat taxes that would likely hurt the poor. Senator Cruz is pushing a Business VAT that would disincentivize employment (probably not a good sell to workers), and while Rubio has more interesting economic policies given his new child tax credit, he has not made a sustained pitch to the working class on economics, focusing on foreign policy instead, though that may be changing.

For Republicans to win national elections and possibly put Upper Midwest states in play, they need to do better with working and middle class Americans. To do so, the establishment must recognize its economic policies have failed in the 21st century (as have Democratic policies). In many ways, workers are worse off than 20 years ago, which is a stinging rebuke of our political establishment. Until the republican establishment admits failings and modernizes conservative principles to solve 21st century problems (for example, negative marginal tax rates), the GOP establishment will justifiably continue to lack any credibility with its working and middle class voters.

Trump’s proposals are ultimately simplistic and essentially are “blame the other guy (with other guy being China, Mexico, Vietnam, Donors etc.),” but he is the only major candidate arguing to workers he cares about their well-being. No wonder they are flocking to him. The base is not failing the establishment. The establishment has failed its base for 15 years with lousy, outdated, and unoriginal economic policy offerings, and until they recognize this, blue collar republicans will be receptive to outsiders like Trump.

Bush failed the middle class. Unless the GOP intellectual elites cede this and make necessary policy updates, Trump won’t be an aberration. He’ll be the first in a long string of populist outsiders while the power of the establishment continues to atrophy.