The Iowa Circus, also known as the Iowa Caucus, proved to be unexpectedly chaotic. Before offering our thoughts on the big winners and losers, we take pride in the fact that we accurately predicted the outcome. On Sunday night, we released our predictions: Sanders, Buttigieg, Warren, Biden, Klobuchar, and Yang in that order. With 62% of the vote reported, we are pleased that we got the popular vote order correct, particularly the fourth place finish of Biden. We had argued for weeks that Biden’s support was much more shallow than the polls were indicating. After Iowa, that is painfully clear to all.
So here are the winners and losers that we see:
Winner #1 – Pete Buttigieg is likely to finish with the highest number of delegates and place second in the popular vote. He outperformed his polling numbers, particularly in the more rural counties. Buttigieg needed a #1 or #2 finish coming out of Iowa to give him momentum in New Hampshire and beyond and he got it. We think he made a tactical error by claiming victory before the vote count was released, which antagonized other candidates, but everything considered this was a best case outcome for Buttigieg.
Winner #2 – Although Bernie Sanders underperformed our projections, he still won the popular vote in both the first and second round votes. The chaotic nature of the caucus and strange allocation of delegates also energizes Sanders followers, playing into the narrative that the DNC is trying to rig the election against Sanders. This is like pouring oil on a fire and is likely to further embolden the Sanders faithful. We believe that Sanders heads into New Hampshire as the favorite. We also believe that Sanders has a better chance of winning pluralities so that a splintered Democratic race heading into Super Tuesday is to his advantage. A win in New Hampshire would give him a clear path to winning the nomination.
Winner #3 – Donald Trump had a great night . He won the Republican Caucus with 97% of the vote. Turnout on the Republican side was also strong with 32,000 people turning out for a meaningless event that surpassed Obama’s 2012 tally in Iowa. More importantly, the Democratic Caucus was a disaster. The contrast of Trump winning easily and the disarray of the Democrats is stark and plays to Trump’s advantage. With a string of recent wins (USMCA trade deal, China trade deal, strong economy, upcoming impeachment acquittal), Trump has a lot of momentum.
Winner #4 – Michael Bloomberg looks like a savant for sitting out the Iowa Caucuses. We had been doubtful of Bloomberg’s strategy of focusing on Super Tuesday and still believe that he is not likely to win. Still, the more chaotic the Democratic nominating process, the more likely that Bloomberg has a shot.
Loser #1 – Joe Biden had a very weak night. On Sunday, Nate Silver’s 538 had Biden potentially winning the Iowa Caucuses. Instead, he finished a distant fourth, barely edging Amy Klobuchar. With lackluster fundraising, small crowds and now a fourth place finish in the first contest, Biden is limping into New Hampshire. The chaos of the Iowa Caucus may have diverted attention away from Biden’s weak performance, but this is a campaign that is in desperate need of good news. We don’t think he will get it in New Hampshire.
Loser #2 – The Democratic Party suffered a huge setback. The disarray of the caucuses has fractured the party, leading to a surge in conspiracy theories and polarizing the candidates. On Twitter, #MayorCheat, #PetetheCheat and #DNCRigged are trending. The Sanders followers believe that the Buttigieg campaign in partnership with the DNC rigged the Iowa Caucus. Moreover, the fact that Sanders won the most popular votes, but did not receive the most delegates in Iowa, once again undermines the credibility of the process. Even more worrying, the turnout at the Caucus was less than expected. The turnout seems to be on track for approximately 160,000, consistent with the 2016 caucus and well below the 2008 caucus when over 240,000 people turned out for Barack Obama. We view this as a sign of weak enthusiasm on the Democratic side.
So what happens now? While President Trump is giving the State of Union speech, the Democratic candidates have all flown to New Hampshire where the next debate will take place on February 7th in Manchester. The race seems to be down to five (possibly six) candidates: Sanders, Biden, Warren, Buttigieg, Bloomberg and possibly Klobuchar. That said, we think Sanders is the clear favorite. We believe that he will win the New Hampshire primary (which he won in 2016) and the Nevada Caucuses where he and Biden have been leading the polls. Sanders is likely to head into Super Tuesday in front. He also has the largest national campaign, strongest fund raising network and most committed followers. This will help him on Super Tuesday and likely propel him to victory.
We think Sanders’s greatest competition will most likely come from Warren, who could consolidate the female vote and possibly unite with the establishment against Sanders. Buttigieg also has a path to victory, particularly if Biden and Klobuchar exit quickly and he can become the clear establishment candidate. That said, we have our doubts about Buttigieg’s ability to quickly assemble a strong national campaign. He would also have to overcome weak support among black and hispanic voters. In summary, following Iowa, here our odds for the ultimate nomination: Sanders (50%), Warren (20%), Buttigieg (15%), Biden (5%), Bloomberg (5%), Klobuchar (3%) and someone else (2%).
NewEnglandPolitics.com 