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Notes on the GOP Race

By John Ellis

1. All of the Republican candidates, with the exception of Romney, are broke. What money they have left they are deploying in South Carolina and Florida and hoping that the results there will enable them to raise more money to compete in the February 5th Super Tuesday contests. McCain is perhaps the least vulnerable to money woes, because he has the greatest name recognition nationally from his 2000 campaign. But if he loses in SC, he will be strapped financially in Florida. Huckabee has never had much money and knows how to live off the land, but his inability to mount a massive Michigan television advertising campaign consigned him to a weak third place finish there, as opposed to a 20-plus percentage point third place finish. The latter result would have helped him a lot in South Carolina.

Thompson's campaign is one big roll of the dice on South Carolina. You can't lose to Ron Paul in Michigan and Mike Huckabee in South Carolina and hope to be taken seriously. His whole fund-raising strategy is dependent on his finishing at least second in SC. Rudy Giuliani has somehow managed to spend all his money without having actually competed in any of the early primary states. He finished behind Ron Paul in Michigan. He has to win Florida or he's a goner.

2. In a weird way, the GOP presidential primary campaign now hinges on Mitt Romney. More specifically, it hinges on whether Romney will be willing to spend as much of his personal fortune as necessary to win the GOP nomination. That could amount to as much as $40 million, on top of the $17 million he has already contributed to the cause. If he does decide to fully fund his own campaign, then he will be able to outspend his rivals on television advertising by as much as 10-to-1 in state after state after state (think: February 5th). If someone asks you: "can Mitt Romney win the GOP nomination?" ask them: "is he willing to write the check?"

3. South Carolina is the last state where we will see campaign organizations. After South Carolina, the rest of the campaign will be on television and on the Internet. There is no way to "organize" 17 states that are having primaries on the same day. And with all of the campaigns so short on cash, every available dollar must necessarily go toward media advertising. So paid media and unpaid media (news media coverage) will determine, to a large degree, the outcome of the race.

4. How much longer can the news media afford to cover 8 campaigns? There are five Republican presidential campaigns and 3 presidential Democratic campaigns. This was not in the budget. The number has to be reduced, just on a cost basis. So adios John Edwards, for sure. And adios two of the five GOPers after South Carolina, for sure. They're simply too expensive to carry on the books for another month.

5. The story lines at this stage of the race are remarkably different. The Democratic race is basically the 2008 edition of Gary Hart against Walter Mondale, with race and gender issues upfront. The Republican race is impossible to characterize in one sentence or even on one page. It's like a jigsaw puzzle with pieces from four different landscapes.

6. McCain is much weaker in 2008 than he was in 2000. In 2000, McCain received over 600,000 votes in the Michigan primary. In 2008, he received just over 250,000 votes in the Michigan primary. That is substantial attrition no matter how you look at it. Republican primary voters who like President George W. Bush didn't vote for McCain in Michigan. There are a lot of Republican primary voters in the South who like George W. Bush. This is bad news for McCain going into South Carolina.

7. Who says that Edwards Hurts Obama? One constant refrain in news "analysis" of the Democratic presidential campaign is that the continuation of the Edwards campaign hurts Sen. Obama's campaign by "dividing" the "anti-Clinton" vote. Really? I would argue that Edwards helps Obama in South Carolina (and elsewhere) by draining white male votes away from Senator Clinton, thus making it all but impossible for her to win definitively in any state with significant African-American voting populations. I don't hear anyone in the Obama campaign calling for Senator Edwards to get out of the race. And for good reason.

John Ellis is a contributing columnist to RealClearPolitics. In his day job, he’s a partner at Kerr Creek Partners, a venture capital firm.

Copyright 2008, Real Clear Politics

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