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In Hedging Iowa Bets, Is Romney Going for Silver?

On Thursday, amid the media frenzy surrounding Anthony Weiner and Newt Gingrich, Mitt Romney’s campaign announced that their candidate would not compete in the Ames, Iowa straw poll — despite the fact that Mr. Romney won the straw poll in 2007 and that he currently leads in surveys of the Iowa caucuses.

The decision is not entirely without precedent — John McCain and Rudolph Giuliani skipped the poll in 2007. But it does speak to the dilemma that every presidential candidate faces in Iowa: they want to do as well in the state as possible, but also keep expectations as low as possible. (Historically, the ‘bounce’ that candidates receive out of Iowa results from a combination of actual performance and performance relative to expectations.)

It is, of course, very hard to accomplish both those objectives at once. Instead, each candidate must attempt to determine the optimal trade-off.

In some cases, this nevertheless produces an unambiguous strategy: Tim Pawlenty and Michelle Bachmann, with their evangelical credentials and their Midwestern roots, are going “all-in” on the state, expectations be damned. Jon Huntsman, conversely, may not so much as set foot in Iowa, conceding a very poor finish.

Mr. Romney, however, seems inclined to hedge his bets. Let’s therefore examine the various possible scenarios in Iowa from his point of view — and consider how the momentum that Mr. Romney carries out of the state might be affected by the expectations he’s established beforehand.

In contemplating these scenarios, I’ve divided Mr. Romney’s opponents into two basic groups:

Establishment candidates are those with traditional credentials which Republican elites are likely to view as acceptable and “electable” choices. The most important member of this group, in addition to Mr. Romney, is Tim Pawlenty. But it would also include Rick Perry, who some reports suggest is increasingly likely to run for the nomination, and other potential late entrants like Paul Ryan, Jeb Bush and Chris Christie. (Mr. Huntsman is also in this group, but he won’t be a factor in Iowa.)

Insurgent candidates, meanwhile, are outsiders who instead will rely on support from the grassroots and the Tea Party — and who might have a more difficult time against President Obama. The list includes — in rough order of their likelihood of performing well in Iowa — Michele Bachmann, Sarah Palin, Herman Cain, Rick Santorum, and Ron Paul.

By treating the candidates within each group as roughly equivalent to one another, we can reduce the many possible permutations in Iowa to seven basic scenarios:

Scenario #1. Mr. Romney wins Iowa. In this case, it won’t really matter what expectations will have been: Mr. Romney will be in an extremely strong position to win the Republican nomination. He would very likely follow up his win in Iowa with one in New Hampshire, and although there’s a chance that a more conservative candidate could try to rally in South Carolina, odds are that the party would coalesce around Mr. Romney and we’ll have a relatively short campaign.

This scenario is such a home run for Mr. Romney, in fact, that it raises questions about whether it is in fact wise for his campaign to devote fewer resources to Iowa. Sure, doubling down on Iowa is a high-risk, high-reward strategy. But the nomination is a winner-take-all process — there’s no reward for finishing in second place and taking home what Mr. Romney refers to as “silver medals” — meaning that go-for-broke strategies are often merited.

Scenario #2. Mr. Romney finishes second behind an insurgent candidate. This scenario is still a pretty good one for Mr. Romney. Most notably, he’ll have beaten Mr. Pawlenty, who will have finished no better than third place in a state that had seemed pretty strong for him. None of the insurgent candidates, even after winning Iowa, are liable to be terribly competitive among the moderate voters of New Hampshire, so Mr. Romney will still be on track for a win there.

That’s not to say that there would be no benefit at all to Mr. Romney from having managed expectations effectively. Mr. Huntsman, for instance, will try to exploit this scenario — and his argument to New Hampshire voters (and Republican elites) will be more credible if Mr. Romney’s performance is thought of as having been disappointing rather than a “strong second”. But more likely, this sets up a “playoff” between Mr. Romney and the insurgent winner of Iowa in the next several states — one which Mr. Romney is likely (although not certain) to win.

Scenario #3. Mr. Romney finishes second behind an establishment candidate. This scenario is the one in which having lowered expectations might provide the clearest benefit to Mr. Romney. In particular, if Mr. Romney finished second behind Mr. Pawlenty, keeping expectations low could limit the size of Mr. Pawlenty’s bounce in the polls heading into New Hampshire. If Mr. Romney in fact prevailed in New Hampshire, the two candidates might be on a roughly even footing heading into the remaining states, with the other candidates having little chance.

The same largely holds if Mr. Romney finished second behind Mr. Perry, who is probably too conservative to be a favorite in New Hampshire even if he wins Iowa. If Mr. Romney’s second-place finish were perceived as credible rather than disappointing, that could make it more difficult for a candidate like Mr. Huntsman (or even Mr. Giuliani) to emerge as the moderate alternative to Mr. Perry with a strong showing in New Hampshire.

Scenario #4. Romney finishes third behind an establishment and an insurgent candidate. This situation could get messy, particularly if it’s the insurgent candidate winning the state, with a candidate like Mr. Pawlenty finishing in second. At that point, Mr. Pawlenty, Mr. Romney and Mr. Huntsman could all make credible arguments that they deserved the establishment’s support in New Hampshire.

The danger to the G.O.P., of course, is that if the establishment vote were irreconcilably split between two or three candidates, that could allow the insurgent candidate to build enough momentum to actually win the nomination. But Mr. Romney’s side of the argument would become relatively more persuasive if the headlines coming out of Iowa were “Pawlenty falls to Tea Party candidate” rather than “Romney flops and finishes in third”.

If instead it’s Mr. Pawlenty winning the state and a candidate like Ms. Bachmann finishing in second, then Mr. Romney’s task will be more difficult and Mr. Pawlenty becomes the favorite to win the nomination.

Scenario #5. Mr. Romney finishes third behind two insurgent candidates. This is a relatively unlikely scenario — but another one in which pre-election expectations may matter. Mr. Romney’s argument will in essence be that Iowa is not representative of the Republican electorate as a whole — and that he did about as well as could be expected by having finished ahead of Mr. Pawlenty, Mr. Perry, and so forth. The larger threat to Mr. Romney at this point become Mr. Huntsman, who will argue that Mr. Romney had failed to keep the insurgent candidates at bay — and that he instead deserves to emerge as the alternative to them.

Scenario #6. Mr. Romney finishes third behind two establishment candidates. In this scenario, conversely, a lot of the oxygen will be sucked out of Mr. Romney’s campaign — it will be hard for him to persuade voters that Iowa hadn’t mattered when two credible alternatives had finished ahead of him.

Scenario #7. Mr. Romney finishes fourth or worse behind a combination of establishment and insurgent candidates. In 2008, John McCain won the nomination after finishing fourth in Iowa. The three candidates who finished ahead of Mr. McCain included two establishment candidates (Mr. Romney and Fred Thompson) whose performance was widely viewed as disappointing, and an insurgent candidate (Mike Huckabee) whose strengths did not transfer well to New Hampshire:

1. Mike Huckabee (insurgent), 34.4%
2. Mitt Romney (establishment), 25.2%
3. Fred Thompson (establishment), 13.4%
4. John McCain, 13.0%

So what if next year’s Iowa caucus results looked something like this?

1. Michelle Bachmann (insurgent), 34.4%
2. Tim Pawlenty (establishment), 25.2%
3. Rick Perry (establishment), 13.4%
4. Mitt Romney, 13.0%

Could Mr. Romney recover from a finish like this one?

Never say never, but it is unlikely for several reasons.

First, Mr. McCain never polled terribly well in Iowa, unlike Mr. Romney, who currently leads the Iowa polls and finished second there in 2008. So his efforts to contain expectations were more credible.

Second, Mr. McCain benefited from an external contingency — the collapse of Mr. Giuliani’s campaign. He began to surge in the New Hampshire polls in November and December 2007, with much of his support coming from voters who were previously inclined toward Mr. Giuliani. That is how he carried momentum into New Hampshire despite his mediocre finish in Iowa. But Mr. Romney has a large lead in the New Hampshire polls right now and the only way for him to go is down. Instead, the candidate whose position more closely resembles Mr. McCain’s is not Mr. Romney but Mr. Huntsman, who will probably be coming from behind in New Hampshire.

Third, Mr. McCain is the exception rather than the rule. He’s the only candidate to have won his party’s nomination despite finishing fourth or worse in a competitive caucus in Iowa.

Finally, not all fourth-place finishes are equal. If Mr. McCain had finished in fourth but Mr. Romney rather than Mr. Huckabee had won Iowa, Mr. McCain would probably have lost New Hampshire to him. If Mr. Thompson had finished a strong third rather than a weak third, he would have gotten more favorable media coverage out of Iowa and might have made more of an impact on the race, such as by winning South Carolina. In short, while a comeback might not be completely out of the question in an eventuality like this one, Mr. Romney would need quite a bank shot to secure the nomination.


Perhaps all this detail is unnecessary. The basic calculation is that lowering expectations may produce some benefit to Mr. Romney if his finish in Iowa is good but not great (like in Scenarios #3, #4 and #5). If he does manifestly well (like in Scenarios #1 and #2), then he’ll be on track to win the nomination and having lowered expectations will be superfluous. If he does manifestly poorly (like in Scenarios #6 and #7), then all the spin in the world may not help him. The question is whether, in undertaking actions that both lower expectations in Iowa and which may harm his actual finish in the state, the trade-off is acceptable.

I’m sure that Mr. Romney’s campaign has run through this calculation many times over. I don’t know the question has a clear enough answer to label their strategy as being either obviously correct or obviously mistaken.

But my inclination is to think that the greater mistake is to devote too few resources to Iowa rather than too many. As I mentioned, the objective is not to maximize the number of delegates or to prolong the campaign. Instead, it’s to maximize your chances of winning, full stop. That requires taking some gambles, particularly in a race in which there is no real frontunner.

More importantly, Mr. Romney should consider where the Iowa voters he might sacrifice will wind up instead. It won’t be with insurgent candidates like Ms. Bachmann and Mr. Cain. Instead, Mr. Romney’s would-be voters are more likely to support other establishment candidates, especially Mr. Pawlenty — exactly those candidates who would be most dangerous to Mr. Romney if they performed well in the state.

Nate Silver is the founder and editor in chief of FiveThirtyEight.