One on One with Tom Gallagher, Political Economist at ISI
Thursday, January 03, 2008
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SUSIE GHARIB: Those vying for President Bush`s job will soon get an official account of how they`re doing. Tonight, voters in Iowa begin the process of choosing the next U.S. president with their precinct caucuses. New polls show Mike Huckabee and Mitt Romney tied at the top on the Republican side. For the Democrats, it`s a three-way race among Hillary Clinton, Barack Obama and John Edwards.
Joining us now to talk more about the Iowa caucuses and give us his analysis, Tom Gallagher, political economist at ISI, a Wall Street research firm. Hi Tom. You know as everyone knows, the Iowa caucuses are determined by a limited number of voters. So how important are these Iowa, you know, caucuses in the presidential race overall?
TOM GALLAGHER, POLITICAL ECONOMIST, ISI GROUP: Actually, I think they have a pretty good predictive record as to who gets the nomination. One problem, when you look at the history of the Iowa caucuses is that local favorites often distort the outcome. If you had a politician from Iowa running for president or if you had someone from a nearby state which has happened a few times, they tend to be favorites so that discourages other candidates from campaigning there and the media then tend to devalue the victories. Once you take out the local favorites, you actually have to go back to 1980 to find an Iowa caucus winner who didn`t get the nomination, so it`s pretty important. It`s not perfect, but it`s a pretty good predictor.
GHARIB: As the voters cast their votes tonight, to what extent will economic issues play a roll in their decision making, especially with all the attention now on $100 oil, home prices coming down, what the Fed is going to do. To what extent do economic issues play a role in the political decisions that are going to be made in Iowa tonight?
GALLAGHER: It`s probably fair to say that the economic issues have taken on greater importance over the last few months and the war in Iraq has probably taken on somewhat less importance. But I don`t think that voters really tend to categorize, over compartmentalize their concerns like that. I think they`re drawn to a candidate for his or her style. So Edwards has been a strong populist and he`s been a fighter and so people are drawn to that style. Senator Clinton has been more of campaigning on her experience, so people are drawn to that. So I think economics is part of a more complex set of considerations for most voters rather than something separate that determines their votes.
GHARIB: When you do look, though, at the economic issues and I guess the style issues that go along with that, which candidates do you think speak most to these economic topics?
GALLAGHER: Well, I think that they all really are addressing them. I think what`s notable about the Iowa campaign so far is that populism seems to be a pretty winning message in both parties. It`s not surprising on the Democratic side, the three leading Democrats have all embraced economic populism to one extent or another, former Senator Edwards being the most aggressive on that front. But on the Republican side, it`s unusual to have a front runner, namely former Arkansas Governor Huckabee also using some of the populist rhetoric when it comes to outsourcing or CEO pay or immigration. And so I think that will be an important message that we`ll learn from the Iowa caucuses is what kind of economic messages are selling and that therefore likely to sell later in the campaign. And right now, I think that`s what most people are looking to see how well the candidates who espouse populism the most fair.
GHARIB: We`re going to have the results in just a few more hours. What do you think is going to happen then after that? Which candidates will be in and which candidates will be out?
GALLAGHER: Well, I think different candidates can withstand different degrees of defeat here. Probably Senator Clinton has the best chance of surviving a loss here. I think it would be hard for either Edwards or Obama to survive a loss in Iowa. On the Republican side it`s really just a two way race and so I think both Huckabee and Romney will carry on their campaigns after this. I think that the stacking, the front loading of the primaries probably makes Iowa and New Hampshire together really more important even than they have been in the past. So I think you`ll get a better assessment of who survives after the five-day lag between Iowa and New Hampshire. I think there will be a big winnowing out after the New Hampshire primary which is next Tuesday.
GHARIB: OK, we`ll know very soon. Thank you very much Tom for your insights, thank you.
GALLAGHER: Thank you.
GHARIB: My guest tonight Tom Gallagher, political economist at ISI, a Wall Street research firm.
