GOP and Wealth: The Party of Main Street, Not Wall Street

Posting my latest City Focus piece published by the Daily Mail yesterday. It examines Mitt Romney’s private-equity past – did he destroy jobs or create them? And it looks at the attacks by his rivals, notably Newt Gingrich, on his time as head of Bain. It suggests also that his economy policy is vague in some key areas — e.g. how he would pay for income taxes.

Well, Repenting Works.

Newt Gingrich’s win in South Carolina is certainly one of the biggest comebacks seen in recent U.S. election history. And is especially impressive when you consider that he was outspent significantly by Mitt Romney. Exit polls provide some of the reasons for the victory. The former House Speaker  performed well in the two debates preceding the vote, and 88 percent of those surveyed said the debates played an important factor in how they cast their vote. Men favored Gingrich — and the woman vote seemed to be depressed.

What will, though, worry the Romney camp the most is that the exit polls also suggest that Gingrich was seen as a better candidate when it comes to the economy. That is a switch: up until now Romney has been the candidate seen as the better bet for the economy. And, of course, that has been the central message of his campaign: coming from the private sector, he is the man who can turn the U.S. economy around. Also significant is that the exit polling found that Gingrich was seen as the best equipped candidate to go head to head with Obama in the general election.

So, Florida next. South Carolina has never been favorable territory for Romney. But he now faces a serious rival who will enter the next primary on a bounce.

South Carolina Is Not France

What a predicament evangelical Protestant Christians in South Carolina will face this weekend! They will make up an overwhelming voting bloc in the GOP primary on Saturday — up to about 60 per cent of the Republican electorate, and how they vote will decide not only this primary but, I suspect, the eventual Republican nominee.

Now that Texas governor Rick Perry has ended what must rank as one of the most disastrous GOP primary campaigns in recent U.S. politics, those evangelicals are going to have to pick between a Yankee Mormon, a thrice-married Roman Catholic convert who apparently lobbied his second wife to accept an open marriage, and another Catholic from a northern state.

This isn’t the best state for former Massachusetts governor Mitt Romney. In 2008, he came in a poor fourth. Many evangelicals in the state consider Mormonism a non-Christian cult and his moderate Republicanism is also something to be held against him. Four years ago, he didn’t win a single county.

Unsurprisingly, former House Speaker Newt Gingrich has surged in recent polls in South Carolina. Various analysts say this will be a close race between the two. Gingrich campaign advisers I have talked to remain confident and are over the moon with the Perry endorsement.

And in the ads they are running in the state they are doing everything to play up all the “moderate” positions Romney has adopted in the past – from his onetime support of abortion rights to immigration reform. Privately, they say that Gingrich’s repentance for his infidelities will play well and they suggest that Romney’s Mormonism will continue to harm him – not that they will pay that card openly.

But times might have changed and it may be that Gingrich’s past is more of a liability than Romney’s Mormonism.

First, South Carolina’s evangelicals have had four years to mull over his Mormonism – the shock value has diminished this time.

Second, conservative radio host Glenn Beck has helped to neutralize the disapproval of Mormonism among the evangelicals in the state. He chose the Palmetto State in 2009 to kick off his nine-city book tour marketing “Arguing With Idiots: How to Stop Small Minds and Big Government,” and he now counts evangelical Protestants in that state among his most fervent loyalists.

Even an evangelical authority such as Gary Weier, executive vice-president of the Greenville-based Bob Jones University, believes Mormonism has become a non-issue. “He may have certain values but he is not seeking the office of the presidency to convert the nation to Mormonism,” he told the Financial Times.

And the polls suggest that Romney is doing much better among the evangelicals than he did in 2008. In fact, evangelicals are closely divided, with a Time/CNN/ORC South Carolina survey giving Rick Santorum 20 percent, Gingrich 23 percent and Romney himself a respectable 26 percent – a tremendous improvement on his showing four years ago when he garnered just 11 percent of the evangelical vote.

When it comes to the remaining 40 percent of likely primary voters in the Palmetto State, Romney is charging away, leading Gingrich 47 percent to 22 percent.

Gingrich’s supporters – and a media keen to keep the race from becoming dull in its inevitability – are playing up the Perry withdrawal and the Texas governor’s endorsement of Gingrich, arguing that Romney will not be able to benefit from his divide-the-conservative-vote and-conquer strategy of the past. But this is not a straight race between the former Massachusetts governor and the former House Speaker — Santorum is still in the race and even stronger than a week ago buoyed as he is by the announcement that he might after all have beaten Romney in Iowa.

Divide and conquer still stands.

Another factor seemingly working in Romney’s favor is that this year economics is trumping religion. Most primary voters in the state – as with voters everywhere – are looking for someone who can turn the economy around. Maybe Romney can, maybe he can’t, but most surveys show a majority of GOP primary voters believe he is the best candidate to do so.

Obviously, tonight’s debate could be crucial – neither Romney nor Gingrich can afford a major slip-up. But Gingrich has the bigger challenge. That’s because he goes into the debate with today’s background of attacks from his former wife, Marianne, who has claimed that he wanted an open marriage.

That disclosure will be aired immediately following the debate on ABC in which Marianne will say that Gingrich wanted to continue his six-year affair and proposed maintaining their marriage and keeping a congressional aide, who is now his third wife, as a mistress. While the allegation is not entirely new, the timing of it now is deeply damaging – especially on the eve of a primary vote in the Bible belt.

Gingrich supporters – including now Rick Perry – are emphasizing that their candidate may not be perfect and that he is a man who has learned from his past mistakes. But South Carolina is not France, and, I suspect, that Marianne’s revenge outweighs Romney’s Mormonism.

 

Iowa: Who Won? Don’t Know. Never Mind!

So apparently Iowa is now too close to call and maybe Rick Santorum won after all. And we trot around the globe encouraging others to follow our democratic processes!

Both the US and UK have excellent non-profit agencies funded by US AID and the Department of International Development counseling various electoral commissions in foreign countries, training poll-workers and advising on electoral process and we can’t get it right ourselves — the Florida debacle and now this in Iowa.

At the last UK general election there were several constituencies where thousands of voters were prevented from voting. But there were no re-runs — when there should have been. Now what does the Bible say, “And why beholdest thou the mote that is in thy brother’s eye, but considerest not the beam that is in thine own eye?”

NBC points out that the Iowa Caucus results are not binding, meaning the results do not dictate which candidate the delegates at the national conventions in the summer vote for. “So not having an actual ‘winner’  of the caucuses will not have as big of an impact as it would in other binding states,” the news report states.

Maybe so, but declaring Mitt Romney did have an impact on the race: it allowed the former Massachusetts governor to build up a sense of inevitability about his candidacy that likely influenced some voters in New Hampshire and almost certainly helped his campaign fundraising. In short, it had a distorting affect.

 

Not Very Much

“My income comes overwhelmingly from some investments made in the past, whether ordinary income or earned annually,” Romney, said after a rally in Florence, South Carolina as he admitted he paid “probably close” to 15 per cent of his income in tax. His fortune is thought to be around $250 million – money amassed mainly from his years as the head of Bain Capital.

And then this: “I get speaker’s fees from time to time, but not very much.”

Not by his standards, maybe.

According to the Telegraph a disclosure form he filed stated that in the year to February 2011 he was paid about $375,000 for nine speeches.

It reminds me of the moment during the 1992 election campaign when George Bush was caught asking a supermarket clerk how check-out worked.

 

 

 

Independents More Worried By Inequality than Over-Regulation

The Washington Post has a new poll out today that shows how evenly split America is between the parties and between Obama and Romney – no big surprise there. Obama’s job ratings are 48 percent approval and 48 percent disapproval.

But the most interesting thing in the poll is this: “One key theme of the campaign is breaking in Obama’s favor. By 55 percent to 38 percent, more Americans consider inequality the bigger economic issue than over-regulation of free enterprise. A majority of independents say inequality is the bigger issue.”

The GOP has invested a lot of rhetoric in claiming that free enterprise and America’s future economic growth is imperiled by “socialist” over-regulation from Washington – it is, of course, the Johnny-one-note theme of Fox News and has been a cudgel Republican lawmakers have been wielding to bash everything from Dodd-Frank on Wall Street reform to the Consumer Financial Protection Bureau.

But the poll would suggest that voters are not buying it. This could be significant for Obama. Judging by the poll –- and other recent surveys – Independents are not in the Obama camp – of course they are not in the GOP camp either. For instance, today’s poll throws up this: “A record-high 20 percent of independents say they trust neither side when it comes to the interests of the middle class.”

It is the issue of inequality versus regulation that gives Obama some clear distance from the GOP when it comes to Independents.. So we will hear much more, I suspect, in the coming weeks on the Buffet Rule and Romney’s tax rate of 15 percent.

One other boost for the President from today’s opinion poll comes with signs that Democrat enthusiasm for him is growing. That’s crucial for his re-election prospects. Obama won last time because of his supporters’ enthusiasm and his ability to use that to increase the Democrat base – to sign up more young people and ethnic minorities.

“Most Democrats, 53 percent, say the country is heading in the right direction, a 21-point increase since September. Two in three say they see a rejuvenated economy, up 19 points from November.”

 

 

 

Whistling in the Dark

Bloomberg has a headline this morning that about says it all when it comes to the Eurozone’s political leadership – “Euro Leaders Aim to Buy Time to Save Currency.” More time?

For the past 18 months there has been dithering and inconclusive summits and failure at every turn to get out ahead of the crisis. Solutions promised and offered have failed to convince the markets and investors that a bottom has been put in to save the currency from collapse and the Eurozone from fracture.

With a new year we are where we were before: no viable political solution.

According to Bloomberg, European leaders are “seeking to buy time for the Spanish and Italian governments to wrest control over their debt.” But that isn’t something that is going to happen overnight or even in a few weeks or months. And getting control of their debt is linked to how the markets feel about the Eurozone generally and the level of confidence investors have in it and not just in Italy and Spain.

Neither country has a solvency crisis – or rather they didn’t. Their initial challenge was over liquidity – and that has been allowed to turn into pending insolvency.

In her end-of-the-year comments, German Chancellor Angela Merkel said her government will do “everything” to bring the euro out of the slump. The only way that can happen is if the Germans agree financial transfers to their poorer neighbors. That has to be done quickly now and speed means Berlin accepting Euro-wide debt consolidation and the issuing of Eurobonds backed by all.

The details of closer financial integration with stricter rules on individual government’s public expenditure can come later.

In the next three months some 157 billion euros ($203 billion) in debt will mature in the 17-member Euro area. And something solid needs to emerge from the scheduled Jan. 9 meeting between Merkel and French President Nicolas Sarkozy or those three months could be even more torrid that what we witnessed last year.

A Sobering Tale

The BBC’s Malcolm Brabant has been an excellent commentator for nearly a decade from Greece.  He has been someone the BEEB could parachute virtually anywhere in North Africa, the Middle East or the Med region to get some solid reporting. He is also a fun man to have a beer with. The Daily Mail has a saddening first-person account by Malcolm of the psychotic consequences of a Yellow Fever jab that has gone very bad for him.

The Surprising Rise of Rick Santorum.

A late surge in Iowa by Rick Santorum has the chattering class…well, chattering.  The former Pennsylvanian Senator has worked Iowa hard and the state tends to reward those politicians willing to engage in close personal encounters – retail politics is all in the Hawkeye state.

But the big question is whether the sudden enthusiasm for Santorum is a reflection less of his innate skills or what he has to offer than the continuing lack of excitement for frontrunner Mitt Romney.

The GOP primary race from the get-go has been about a search by the Republican faithful for a conservative alternative to Romney. A good showing for Santorum – being in the final three – would presumably put paid to Michelle Bachmann: a poor showing for her in Iowa, a state she too has banked on, would imprison her in the low single digits from here on.

My prediction for Iowa: Romney pulls off a win because the anti-Romney vote gets hopelessly split with Ron Paul coming in second and possibly Santorum third. Curiously, Newt Gingrich just hasn’t taken fire in Iowa, despite his national surge. Maybe that’s because his field operation in the Hawkeye State was late in being formed.  Some good blog reporting by The Hill’s Niall Stanage here.