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It's the Economy, Maybe

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The biggest question in the race for the Republican presidential nomination so far has been whether Rudy Giuliani's national support can withstand the effect of expected victories by Mitt Romney in early primaries. Romney has spent considerable time and money trying to build support in Iowa, enjoys next-door-neighbor status in New Hampshire, and has personal ties to Michigan, where he was born and raised and where his father served as governor. In recent weeks, former Arkansas Gov. Mike Huckabee has crept up on Romney in Iowa, and an upset there is quite possible. However, given Romney's superior financial and organizational strength, I would still give him the edge.

Giuliani surged higher in the national polls than most analysts expected, and although his support has slipped in recent weeks, the rate of decline was lower than many of us thought it would be. His moderately liberal positions on cultural issues and his interesting personal life have been partly offset by the almost iconic stature Giuliani achieved responding to the 9/11 attacks when he was New York City mayor. Although no candidate in recent history has lost all of the early primary contests and managed to come back to win the nomination, Giuliani seems well positioned to test that thesis.

But now a new question arises for the Republican field. With the economy clearly weakening, many top economists fear a recession. Even if the economy doesn't reach that point, they predict a slowdown in the annual growth rate to perhaps 1 percent. Given this, will the focus on national security and terrorism give way to greater concern over the economy? And will that put the ball in Romney's court, where his managerial competence as Massachusetts' governor and in business could trump national security worries?

In recent months, Romney has taken the Sam Brownback path, using rhetoric considerably more ideological in nature than one would expect. His choosing this route is intriguing, especially considering Romney's advantage on the competence issue because of his gubernatorial tenure and impressive business background. Despite his strong resume and political pedigree, his overheated ideological rants have overshadowed his cool, analytic business acumen. Romney's campaign has sensed this in recent weeks and has begun shifting back to his core strengths, although the red-meat quotient still seems to be running higher than one might have expected.

It is interesting, therefore, that the candidate who has been gaining ground on Romney is Huckabee, whose soft touch has given him more favorable press than any Republican since John McCain in 2000. It should be noted that the press coverage of McCain has not been as favorable this time around, given his more aggressive stances on many issues.

A shift in focus to the economy would certainly give this contest a new twist. On October 9, Republicans held a debate in Michigan, ground zero in America's economic war zone, yet the candidates hardly addressed the anxiety over the economy that many voters had been expressing for months. The GOP contenders know that tax cuts have lost much of their saliency with voters, but they will have to tread carefully because any prescriptions for change could be interpreted as criticism of a president who remains popular with the Republican base. Still, many within the ranks of that base are consumed with the fact that federal budget deficits soared while their party controlled both ends of Pennsylvania Avenue.

This leaves the question of whether Giuliani could also make the turn toward emphasizing economic woes over security concerns. After all, he can point to his tenure as New York's mayor, where he managed a city, balanced a budget, and governed in a jurisdiction at least as challenging as Massachusetts, and probably more so. It would certainly be a change in focus for his campaign, but it is not implausible.

In short, the ground on which this GOP contest is being fought may be shifting, but the question is whether Giuliani will allow Romney to wrestle the economic high ground away from him. It remains to be seen if Giuliani can remain politically viable long enough for the race to move into his strong states, and away from where Romney has the clear advantages.

 
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