Handicapping the GOP race after Ames

August 12, 2007

An update about the Republican Nomination


The race is still dominated by Rudolph Giuliani, Fred Thompson and John McCain. However, the McCain campaign is now in dire trouble while Huckabee and Romney are becoming more credible.

Fred Thompson – After the hype, there seems to be something of a backlash. Much of this is down to his decision to delay his entry into the race and rather silly stories about his wife. However, his underwelming fundraising figures and his record as a lobbyist hint that he might not be the ‘next Regan’ while the fact he has not entered into the race, while sensible, does hint at something more fundamental. After all, American political history is littered with frontrunners, such as Hubert Humphrey (in 1976), Edward Kennedy (in 1972, 76 and 84), Mario Cumo (in 1992) and Dick Gephadt (also in 1992) leaving their parties ‘waiting at the church’. Estimated chance of winning the nomination are around 30%. Price on Intrade.com 26.0-26.5. SLIGHTLY UNDERPRICED

Rudy Giuliani – Giuliani is doing relatively well in the polls, with a confortable lead in the national polls and a lead in South Carolina followed by solid second place finishes in Iowa and New Hampshire (according to the average of the last 3 polls). He has also been clever enough to avoid the worst of the pandering on tax and immigration by standing on the sidelines while candidates such as McCain electrocute themselves on the third rail of Republican politics. However, a good prediction should always be about the future rather than the past and in that respect there are several storm clouds on the horizon. Firstly, the fact that his daughter now appears to support Barack Obama indicates the potential for an embarassing appearance by one of his disgrunteled progency. More importantly, the recent revelations about his handling of 9/11 and terrorism (essentially that he used the WTC command centre as a lovenest and that he blew the only terrorism case he prosecuted as a District Attorney) could be the fuse that destroys his campaign. Estimated chances of winning the nomination are around 25%.Giuliani Price on Intrade.com 37.3-37.9. OVERPRICED

John McCain – As previously noted, if electabillity were the sole criterion McCain would be miles ahead. However, if electability (or merit) were that important McCain would be either be annointing his sucessor as President or would probably be presiding over the Senate as part of a Lieberman administration. Indeed, the last fortnight has been especially disastrous with his U-Turn on immigration destroying one of key planks of his programme. Despite the fact an average of the last three polls puts him third (or second if you exclude Fred Thompson) nationally McCain is fourth in Iowa and New Hampshire and third in South Carolina. Ultimately, McCain can still pull this back by keeping the faith on Iraq and moving to the centre on economic issues but the window of opportunity is closing with every pander. We saw flashes of the old McCain at the last debate where he refused to pander to the realists and approving used JFKs ‘bear any burden’ quote – we need to see a lot more of this. Indeed, McCain might be best advised to drop out of the Republican party altogether and run as an independant so he can go back to the positions he has been defending for the last seven years. Estimated chances of winning the nomination are around 15%. Price on Intrade.com 6.0-6.1 UNDERPRICED

Mitt Romney – Although Romney is ahead in both New Hampshire and Iowa he is still in single figures nationally. At the same time his ‘victory’ in the Ames straw poll with less than a third of the vote was underwelming given than no other ‘first tier’ candidate took part. At the same time he is still a single term governor who has pandered to social conservatives in a way that has made him a laughingstock. Although the bigotry of many of his critics regarding his religion might backfire (and has no place in politics) I refuse to believe that someone who reads (and enjoys) L Ron Hubbard can be the Republican candidate. Estimated chances of winning the nomination are around 10%.Price on Intrade.com 21.2-22.7. OVERPRICED

5. Mike Huckabee – As a social conservative who is giving off economically centrist signals he could be a formidable candidate provided he distances himself from his idea of a national sales tax. His performances at Ames moves him to the top of the second tier. Estimated chances of winning the nomination are around 5%.Price on Intrade.com 1.8 2.6. UNDERPRICED

6. Chuck Hagel, John Warner and Haley Barbour – The race is now wide open enough to tempt another candidate to enter. These three are the most likely but others may enter. I could even imagine Colin Powell having a go. Estimated chance of any of them winning the nomination is about 15%.

7. Brownback Tancredo, Paul et al – After Ames we should expect to see Duncan Hunter and Tommy Thompson bow out in the next few days while Brownback and Huner are falling away from Hukabee. Ron Paul will stay in the race but the only thing he will achieve is the loss of his congressional seat next November. Estimated chance of any of them winning the nomination is next to nothing.



  1. Paul won’t lose, he has a war chest bigger than McCain and approaching Romney’s.


    The Iowa polls mean nothing.. He’s got 65% in NH.

  2. Huckabee is a very adroit public speaker. He communcates his message in life-like, cogent terms, with compelling examples like the story he told (at the Ames Straw Poll) of what his then-11-yo daughter entered into the “Comments” section of a Visitors Book after visiting the Yad Vashem holocaust museum: “Couldn’t somebody do something?”


    Huckabee puts listeners at ease, and reassures them through clear concepts and a natural, integrated manner of communication (no doubt something well-cultivated as a pastor). He’s not demanding, like a Ron Paul, nor is he as “well-scripted” as Romney, nor as mechanical-squinty like Brownback.

    Most importantly, Huckabee convinces many that he is ONE with the FairTax grassroots movement. While many – like Romney, and others, who are invested in the current income tax system – seek to demagog (1) the well-researched FairTax plan, its acceptance in the professional / academic community (2) continues to grow. Failure to enact the FairTax – choosing instead to try to “flatten” a NON-FLATTENABLE income tax system – will result in an irrevocable economic meltdown (3)!

    Just take a look at the WEAK response Romney followed Huckabee with on last weekend’s “This Week with Geo. Stephanopoulos (4)”

    Here is why the FairTax MUST replace the income tax. It’s:

    • SIMPLE, easy to understand
    • EFFICIENT, inexpensive to comply with and doesn’t cause less-than-optimal business decisions for tax minimization purposes
    • FAIR, loophole free and everyone pays their share
    • LOW TAX RATE, achieved by broad base with no exclusions
    • PREDICTABLE, doesn’t change, so financial planning is possible
    • UNINTRUSIVE, doesn’t intrude into our personal affairs or limit our liberty
    • VISIBLE, not hidden from the public in tax-inflated prices or otherwise
    • PRODUCTIVE, rewards, rather than penalizes, work and productivity

    Its benefits are as follows:

    • No more tax on income – make as much as you wish
    • You receive your full paycheck – no more deductions
    • You pay the tax when you buy “at retail” – not “used”
    • No more double taxation (e.g. like on current Capital Gains)
    • Reduction of “pre-FairTaxed” retail prices by 20%-30%
    • Adding back 29.9% FairTax maintains current price levels
    • FairTax would constitute 23% portion of new prices
    • Every household receives a monthly check, or “pre-bate”
    • “Prebate” is “advance payback” for monthly consumption to poverty level
    • FairTax’s “prebate” ensures progressivity, poverty protection
    • Finally, citizens are knowledgeable of what their tax IS
    • Elimination of “parasitic” Income Tax industry
    • Those possessing illicit forms of income will ALSO pay the FairTax
    • Households have more disposable income to purchase goods
    • Savings is bolstered with reduction of interest rates

    • Corporate income and payroll taxes revoked under FairTax
    • Business compensated for collecting tax at “cash register”
    • No more tax-related lawyers, lobbyists on company payrolls
    • No more embedded (hidden) income/payroll taxes in prices
    • Reduced costs. Competition – not tax policy – drives prices
    • Off-shore “tax haven” headquarters can now return to U.S
    • No more “favors” from politicians at expense of taxpayers
    • Resources go to R&D and study of competition – not taxes
    • Marketplace distortions eliminated for fair competition
    • US exports increase their share of foreign markets

    • 7% – 13% economic growth projected in the first year of the FairTax
    • Jobs return to the U.S.
    • Foreign corporations “set up shop” in the U.S.
    • Tax system trends are corrected to “enlarge the pie”
    • Larger economic “pie,” means thinner tax rate “slices”
    • Initial 23% portion of price is pressured downward as “pie”
    • No more “closed door” tax deals by politicians and business
    • FairTax sets new global standard. Other countries will follow

    Action Now FairTax advocacy at: http://snipr.com/scrapthecode

    (1) http://snipurl.com/taxpanelrebutted
    (2) http://snipurl.com/econsopenletter
    (3) http://snipurl.com/meltdowninprogress
    (4) http://www.youtube.com/watch?v=CW4fa6Z_4Po

  3. Paul isn’t going to win. Although the amount of traction that a nutter like him has got is surprising (and says a lot about the GOP) they are not going to elect an 9/11 conspiracy theorist who wants crack cocaine sold in every corner shop.

    (Of course you could make the snark that if he did win they’d have to nominate Alan Schlesinger as VP).

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