Tuesday, November 15, 2011

Newt Will Be Surprisingly Tough to Bring Down

Now that Newt has become a top contender, according to some of the most recent polls, the knives are out, both on the left and the right.  The common theme is that the Newt boomlet will pass, just as it did for Perry and Cain, as the candidate gets greater scrutiny due to his poll numbers.  These snarky pundits though are going to be in for a surprise when Newt proves far more resilient than they thought, for one reason, expectations.  My years in finance have taught me a few things, one of which is that expectations are often more important than the intrinsic quality of a company in determining future performance.  A crappy company that starts to consistently beat expectations will most likely outperform the great, brand name company, that has started to miss them. 

The reason that Perry flamed out was that people, without really knowing him, expected him to be a competent big-state conservative Governor with a great record and Reagan hair.  Instead, he turned out to be not as conservative as advertised with his competency coming into question with not just one but two major senior moments in the middle of nationally televised debates.  Cain, though an unknown with no political experience, was expected to be a competent administrator given his successful business career.  Instead, he has run an incompetent campaign, focusing more on his book tour than anything else and he seems to know less about foreign policy than a 3rd grader in Appalachia.  His recent Libya flub was really painful to watch.  Also, he completely mishandled the sexual harassment allegations against him (despite knowing the Politico story was coming 10 days in advance) giving at least 3 different responses in the course of 24 hours.  For someone who people expected to at least be a competent administrator, he seems to be anything but.  He is disorganized and uninformed.  It is no wonder his campaign has started to implode.

Newt, on the other hand, is a known quantity.  People already know of his imperfect conservative record and his sordid personal history, and they are supporting him in the polls despite all that.  To bring Newt down, you will actually have to surprise people with something you find.  However, given his record was combed over by Clinton and his minions, you kind of get the idea there probably isn't anything major that people missed before 1999.  And so far there really hasn't been anything major that people have found since then.  The $300,000 advisory fee from Freddie Mac in 2006 is not it.  I don't think anyone begrudges him from making a living after a lifetime of public service, especially one that is not obviously immoral.  Unless he actually cold-called subprime borrowers and tricked them into signing away their houses, this will not stick.  Neither will most of anything else that people dig up, unless they found out he is Sanduskie's best friend or was head of his local KKK.  It's just like with Romney and his flip flops.  The 25% of GOP voters who like him will not change their mind because of another flip flop.  They know and have accepted the fact that Romney bends like a reed in the wind, so another flip flop is just not a surprise to anyone.

Now I am not saying Newt is unstoppable, of course he is.  Because he lacked in funding for so long, he also lacked organization.  So it is unclear how effective he will be in getting out the vote for him in the caucuses and primaries and on capitalizing on any victories.  Lack of a large campaign infrastructure has a much greater chance of torpedoing his candidacy than anything dug up in opposition research.

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