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.




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.

Obama Can Buck The Trend

Journalists can be as slavish to precedent as judges. Most media round-ups of the U.S. presidential election stakes begin or devote much space to the fact that unemployment is running high and that no incumbent since FDR has secured re-election with it higher than 7.2 percent.

Binyamin Applebaum provides the perfect example of conventional wisdom with his piece for the New York Times on June 1, in which he asserts: “Seventeen months before the next election, it is increasingly clear that President Obama must defy that trend to keep his job.”

Precedents are there to be broken, though, and elections are littered with examples of campaigns that have bucked trends. Obviously, persistently high unemployment is something that’s likely to hurt Obama – I’m sure he’d prefer it below the magic 7.2 percent number – but it may well be that it isn’t the defining factor this time.

With incumbency and no primary challenger, Obama is already enjoying a couple of distinct advantages.

And he has another major advantage going into the election season that will, I suspect, assist him to buck the trend – namely, the weakness of the opposition. The GOP’s current candidates are about as inspiring as Bob Dole was in 1996, an election that saw Bill Clinton coast to victory on much lower approval ratings than Obama now enjoys.

Clearly, Obama is vulnerable because of the agonizingly sluggish recovery and high unemployment. Twice as many Americans think the country is on the wrong track as the right one and anger is high in key battleground states such as Michigan, Ohio and Florida. Obama will focus no doubt on continuing to try to persuade voters that without the stimulus and the takeover of GM and Chrysler, the economy and unemployment rate would be much worse.

I happen to think he’s right but that, though, is a tough sell and comes down to defending a record rather than pitching forward and presenting new ideas. President Herbert Walker Bush was caught in that trap when he sought reelection in 1992 – in fact the economy was pulling out of recession then but people were not feeling the benefits of recovery and he got blamed for the economic pain.

Obama has another major weakness: he has failed to present a credible plan to cope with the budget deficit, currently running at almost 10 percent of GDP. His suggestion is that higher taxes on the wealthy will sort that out. It won’t.

But where is the Republican that can take Obama’s weaknesses and turn them into GOP strengths? Do they have credible plans for reducing the budget deficit while at the same time coaxing quicker growth and providing the circumstances for more Americans to get jobs?

The governors in the race – Jon Huntsman, Tim Pawlenty and Mitt Romney – have to be considered the serious candidates. (Sarah Palin, if she runs, and Michele Bachmann are the circus acts.)  But all they do is trot out the line that pleases the Tea Party consisting of slashing public spending and cutting taxes.

Pawlenty has gone off into never-never land in terms of the scale of public spending and tax cuts he wants to see – his plan has prompted groans of disbelief from the Economist magazine, hardly a publication that is in favor of Big Government or high taxes. Aside from ideologues, few respected economists see much to recommend in the bleak solutions being thrown up by the GOP candidates.

They sound like Bush the Younger when it comes to the magic of tax cuts. He claimed that “tax relief will create new jobs. Tax relief will generate new wealth. And tax relief will open new opportunities.” And how did job growth fare? Well, between pre-recessionary 2001 and 2007 America enjoyed the slowest job growth since World War II. Very impressive. And now we have the Republican candidates coming out with the same old, same old unsophisticated supply-side solutions.

Of course, taxes can be too high and in certain economic circumstances and at some points in business cycles tax cuts can be essential. The IMF is recommending them for the UK currently – and that on top of the spending reductions being planned by the coalition government in London. But for America now tax cuts would be unhelpful for economic or job growth.

Bruce Bartlett, a senior policy analyst in the Reagan White House; and deputy assistant secretary for economic policy at the Treasury Department during the George H.W. Bush administration, has been trying to explain to his erstwhile colleagues on the right about why that is the case. His latest column in The Fiscal Times scorns Republicans for tending to talk as if there is only one factor that affects growth – namely, tax rates.

As Bartlett points out corporate investment is key when it comes to economic growth. It is worth quoting him in full:  “There’s no evidence that the 2003 tax cut did anything to stimulate corporate investment. Indeed, according to the Federal Reserve, nonfinancial corporations have increased their holdings of liquid assets to $1.8 trillion from $1.2 trillion since 2003. Thus it’s implausible that a further reduction in the corporate rate, as Pawlenty and other Republicans favor, would do much to raise investment.

“The bottom line is that neither taxes nor spending by themselves are the most important government contribution to the investment climate; it’s the budget deficit. Consequently, a reduction in tax revenue which raises the deficit is unlikely to stimulate domestic investment because more money will have to be borrowed from abroad. Conversely, a tax increase dedicated to deficit reduction could well be stimulative, as was the case with the 1982 and 1993 tax increases. Contrary to Republican dogma, rapid growth followed on both occasions.”

Ordinary voters may not think in such terms. Polls suggest that the budget deficit scares the blazes out of them — as it should. But are they going to be convinced that drastically cutting public spending pell-mell is the answer or that making America’s wealthiest people even wealthier is the way forward?

One thing, I suspect, Republicans still don’t get is that they scare the majority of voters far more with their talk of radically changing Medicare, Medicaid and Social Security. And their lack of a plan to overcome the clear and present danger of structural unemployment save a shrug of the shoulders and claiming tax cuts will solve everything by magically promoting economic growth just isn’t going to cut it on the stump either.

An approach that talks about public investment in infrastructure, science, technology and education, structural reforms to boost jobs and growth, the importance of savings, cutting public spending over time and not so rapidly that it will derail recovery, retraining, government in partnership with the private sector is much more likely to resonate with voters.

As the Economist has pointed out recently, the Republican “failure on the deficit” is serious. “The deficit is simply too large to close through spending cuts alone. The overall tax take – at its lowest, as a share of GDP, in decades – must eventually rise.”

Realism is something that Americans are likely to appreciate this time round more than ever. They understand that a crossroads has been reached. So far there isn’t a candidate on the GOP side who is offering honesty to counter Obama’s half-honesty.