The Iowa Caucus…and Beyond

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With days remaining until the first actual vote of the 2016 season, the myriad of issues that remain undecided still are quite remarkable. Is Trump still leading? Is Cruz fading? Does Rubio have a chance? Is Bernie’s surge real? Will Hillary blow it once again??

So where do we stand?

1. Either Donald Trump or Ted Cruz will win the Iowa Caucus.

I think everyone feels comfortable with this prediction. Marco Rubio will very likely finish third.

The question is how they place, and what the spin the day after will look like.

For either Trump or Cruz, a loss would be devastating to their case. For Trump, he has argued for six months that he the is king of the hill, routinely pointing to poll after poll that shows him on top. In fact, when a rare poll showed Cruz leading, Trump literally whined to the voters of Iowa: “What are you doing to me?”.  A loss would undermine his case that he is the inevitable nominee.

For Cruz, a loss would in some ways damage him even more. There is no state in the country that is more perfectly built for Ted Cruz than the Iowa Caucus.  It is traditionally dominated by Evangelicals and social conservatives; and even more so, virtually all the major leading traditional religious leaders in the state have come out and endorsed Cruz. Cruz has spent more time and money in Iowa than anywhere. For him to fall to second to Trump would be a hard pill to swallow, and would make many once again question his entire electoral strategy.

Rubio is very likely to finish in third in Iowa. Trump has shown a small surge in the last month, and Cruz is actually dropping in the polls after a surge late in the year. Rubio has seen a slight uptick. There is no better reason to believe Rubio is having a slight surge than this: in the past few days, the Cruz campaign has shifted their ad dollars in Iowa from targeting Trump…to targeting Rubio. Their internal polling must be showing something significant.

A finish lower than third in Iowa for Rubio would be catastrophic. It is hard to seriously consider any conservative candidate that can’t finish in the top 3 in Iowa. The rest of the repercussions of Iowa is up in the air. A close third place finish is likely to catapult him into New Hampshire, because of the ‘expectations‘ game being so low for him to begin with. Rubio’s only goal is to get one of the three ‘tickets’ out of Iowa, so he can make this a three-way Rubio/Cruz/Trump race going forward, and slowly push Jeb Bush, Chris Christie, and the others out the door.

2. The GOP race is too close to call.

As said above, either Cruz or Trump will win…but which one?

There are a number of variables that will help decide who wins the slugfest between Trump and Cruz…and all are unknowable, largely for the same reason: Trump is a wholly unquantifiable factor.

First and foremost is voter turnout. Polling in the last week has been telling; most show Trump with an approximately 7 point lead this week over Cruz. But what is interesting is that lead dramatically changes based on how your turnout model is set. If you expect a record turnout of around 200k voters, Trump wins by greater than 10 points. If the turnout model is closer to the record-setting 2012 Caucus, where about 130k voters cast their vote, Cruz and Trump are tied.

Compound this with the turnout infrastructure of both campaigns. Cruz’s state infrastructure is second to none. He has his own campaign staff, along with the well structured Evangelical base in the state, to help drive up turnout among his voters. Trump has..virtually no apparatus. He is largely depending on the enthusiasm of his voters. It will be a great future case study on how each philosophy works in practice.

But again, look at the above numbers. Trump’s lead has now surged to 7 points.  Cruz would not only have to hope for less turnout overall, but asymmetric turnout of his supporters. If you are a betting man, you put your money on Trump slightly at this point.

3. The Democrat Race is close…and in many ways similar. 

In many ways, the Democrat race is a strange mirror image of the Republican race. Bernie Sanders is the outsider, running an unconventional campaign based on enthusiasm, while Hillary Clinton is the established candidate with an extensive, long built statewide infrastructure.

Additionally, the polling is also similar. The race is a virtual statistical dead heat. Unlike the GOP race though, it is Sanders with momentum, while Hillary is not only stagnant..she has been slowly been hemorrhaging support for months.  Her favorability ratings continue to drop among Democrats, and she has not found of any way to reverse that trend.

4. What happens next?

This is the most important question of all. Historically, the Iowa Caucus is a poor predictor on the Republican side over the past two cycles; Santorum and Huckabee won the last two, after all. On the Democrat side, as discussed above, if Hillary wins, she may shut the door on Sanders, even though he will persist in the campaign. If she loses, Sanders finally for the first time could see a viable path to the nomination; not a likely one, but at least a possible one.

The GOP side is cloudy, to say the least. Trump’s ideal strategy is to win Iowa and New Hampshire, claim that he is the inevitable nominee, and then convince the core of the party to unite under his banner. I question whether this is possible; will the majority of the party unite under Trump, unless absolutely forced to? Regardless of Trump’s lead, he has never been able to get above 40% of the GOP primary vote. Traditionally, a nominee needs to win over 50% consistently to get the nomination. He still has some work to do.

The paths for the others are even far less clear than Trump’s.

Cruz must win or at least do well enough in Iowa to claim some sort of victory. A bad finish in Iowa, regardless of placement, would stain Cruz’s argument that he is the viable conservative alternative to Trump. If Cruz does well in Iowa, he can proceed to New Hampshire and South Carolina as the ‘rational’ alternative, and hope that the Party’s innate hate of him will be overcome by the rational decision that Cruz is a far superior general election candidate.

As for Rubio, I’ve been saying for weeks that his strategy is all about threading the needle. He needs the media to turn his third place finish in Iowa into a ‘victory’ of sorts. Furthermore, his team prefers if Trump wins Iowa, in the hopes that the result will send Cruz spiraling.  He then can go on to New Hampshire, claim the flag of the Establishment, and hopefully finish second. That would, in turn, slowly push out the other mainstream candidates, at which time Rubio can consolidate that vote, rightfully claim he is the most viable General Election nominee, and head toward Super Tuesday.

Don’t ask me to say what is the most likely scenario of those; I simply have no idea at this point.

 

If I was forced to put money on who wins Iowa next week, I’d focus on a few key metrics: their current poll standing, momentum in the polls, and infrastructure to drive out voter turnout.

On the Democrat side, the candidates are tied, and momentum is on the side of Bernie Sanders. Can Hillary drive up turnout to counter that enthusiasm from the Progressive wing?  My gut tells me Hillary wins by a hair, but 8 years ago…I would have said the same thing, and she finished in third. If Hillary wins, this race is likely over before it starts, as Sanders simply doesn’t have the ability to fight Hillary in many of the later primary states, especially in states unfriendly to Progressives like the deep South.

On the Republican side, using the same three criteria,  you have to give Trump the edge. He leads in the polls, and has momentum. Cruz will narrow the margin some with his turnout machine, but I doubt it will be enough. Again, like many times before, the story of the night may be the loser; if Rubio can finish a close third to Cruz, that would damage Cruz even further. Cruz’s ideal scenario, if he doesn’t win outright, is to stay close to Trump, crush Rubio, and make this a two-man race. I think that is unlikely at this point.