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.

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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.

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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.

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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.

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