Santorum sweeps back into the race

posted at 8:40 am on February 8, 2012 by Ed Morrissey

Last night when discussing the trends in the three non-binding Republican contests, I tweeted that Rick Santorum’s win in Missouri was only surprising in gaining a majority, but that a win in Minnesota would be surprising — and a win in Colorado would be shocking.  As it happens, National Journal agrees with that assessment. Santorum shocked the Republican race with a clean sweep of Tuesday’s caucuses and primary, and may have pushed himself into serious consideration as the long-sought conservative consolidation alternative to Mitt Romney:

Rick Santorum on Tuesday completed his sweep of states with a stunning upset of Mitt Romney in Colorado’s caucus, according to state Republican officials, shaking up a GOP presidential race that has seen more drama than Romney’s campaign envisioned even a week ago.

Santorum earlier won Minnesota’s caucus and a non-binding Missouri primary. Romney – who won Colorado handily in 2008 — had long remained the odds-on favorite to prevail in that state’s caucus, as polls had shown him with a double-digit lead.

A jubilant Santorum told supporters that he isn’t the conservative alternative to Mitt Romney:

“I don’t stand here to claim to be the conservative alternative to Mitt Romney,” he told supporters earlier in the evening. “I stand here to be the conservative alternative to Barack Obama.”

Missouri had looked for some time to be Santorum’s best shot.  Newt Gingrich chose not to get on the ballot, which made the state Santorum’s opportunity to fight Romney head-to-head.  What little polling existed showed Romney to be about ten to twelve points back, but Romney ended up losing by thirty points as Santorum claimed a 55% majority.  Santorum swept every county, including the presumed Romney stronghold of St. Louis, putting an exclamation point on Santorum’s ability to beat Romney.  He also beat Ron Paul in Minnesota by eighteen and Romney by 28, a state Romney carried easily in 2008, but with a low turnout in 2012 despite appearances from both candidates in the final few days.

However, while Santorum was expected to be competitive in Minnesota, Romney was widely expected to win Colorado.  Romney stayed in Denver for the caucus results, which differed sharply from his massive 42-point 2008 victory.  Instead, Romney ended up the night down five points in a race that also had a 10% dropoff in turnout from four years earlier.  Suddenly, Romney’s organization and his ability to simultaneously compete in multiple states looks a lot less formidable than it did a week ago, and this three-state loss — especially in Minnesota, where Romney finished third behind Ron Paul — makes Romney look a lot less inevitable.

It wasn’t all that good of a night for Paul, either, though.  He managed to get into second place in Minnesota thanks to Romney’s stumble, but Paul was supposed to own the caucus states through his superior organization and fundraising.  His strategy was to win smaller-state caucuses and build a delegate count that would force Republicans to bow to his movement at the convention in Tampa.  He’s getting higher percentages of the votes but not doing much better in a four-man race in position finishes than in 2008.  As in the previous contest, his support and influence is beginning to look overrated, and Paul has to hope for something better out of Maine’s caucus this Saturday.

The man who suffered the worst night was Newt Gingrich.  Gingrich’s absence from the Missouri ballot, which was a deliberate tactical move, looks like a big mistake in retrospect.  He allowed Santorum the opportunity to probe that it would be Santorum and not Gingrich who could rally conservatives against Romney.  Gingrich’s third-place finish in Colorado barely beat Paul to stay out of the cellar, and Gingrich did finish dead last in Minnesota.  There isn’t even a fig leaf of spin from these results to which Gingrich can cling; Gingrich was entirely irrelevant in all three contests, except to the extent that he got beat.

After Maine’s caucuses on Saturday, which I presume all four candidates will now hotly contest, the next big test will be to see if and how Santorum can build on his sweep in Arizona and Michigan.  Romney had big leads in both, with Santorum in third place behind Gingrich.  We’ll see whether these non-binding contests matter to voters on February 28th — and Super Tuesday on March 6th.  If nothing else, this is a very good time for a shoestring campaign to catch fire.

Update: Byron York reports that this sweep may have been ordained in Florida, thanks to the nasty, personal battle between Romney and Gingrich:

“I think this started in Florida, when Mitt Romney and Newt Gingrich went at each other with such personal attacks,” says Chuck Laudner, a longtime ally of Rick Santorum, calling late on election night from Minneapolis.  “They weren’t really on the issues.  It was investments and name calling, and I think it turned people off.  People here looked at that and said there’s got to be an alternative.”

Laudner, the Iowa conservative political operative who became nearly a household name as the owner and driver of the “Chuck truck” that carried Santorum across Iowa before that state’s caucuses, spent the last ten days in Minnesota, trying to persuade influential Republicans to support Santorum. “Ten days ago, I couldn’t get a single statehouse or senate member to go public with an endorsement,” he says.  Then, after the fighting in Florida and its continuation in Nevada, things changed.  “By the end of the week, we got a couple of endorsements, and they helped us get a couple more, and then we had a lot of names.”

The shift to Santorum was fast and overwhelming.  In the end, Santorum beat Romney by 27 points in a state Romney had won by 19 points back in 2008.  Santorum scored an even bigger victory in Missouri’s beauty-contest, nonbinding primary, beating Romney by 30 points.  And even in Colorado, where the race was closer, Santorum came out ahead.  For a candidate who hadn’t won since his narrow and belated victory in Iowa, it was three victories in one night. Santorum has now won four contests to Romney’s three and Gingrich’s one.

Speaking for myself, the Florida contest prompted my final assessment.

Update II: Santorum beat Paul in MN by 18, not Romney, whom he beat by 28.  I’ve corrected it above.

Update III: My friend Shaun Mullen wanted a little more insight into what may be going on in Minnesota  It’s important to remember that the activist conservative base drives the caucuses in Minnesota, which is why Romney won in 2008; he was seen at that time as the conservative alternative to the inevitable John McCain nomination.  Santorum has done a good job in articulating the conservative agenda while Romney and Gingrich spend their time attacking each other on Bain and Freddie Mac.  This is the consequence.


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The taunts, tears and tantrums of Mitt twits are very tasty today.

WhatNot on February 8, 2012 at 1:19 PM

Romney’s coronation is on hold, again.

Schadenfreude on February 8, 2012 at 1:19 PM

Tell that to China (pretty much most of Asia), and Mexico.

cozmo on February 8, 2012 at 1:18 PM

It’s one thing to move operations there.

It’s entirely different to move the entirety of your taxable entity, including your contracts, there.

JohnGalt23 on February 8, 2012 at 1:21 PM

Meechelle make me ill. What a disgrace for a first lady. Right in front of George Washington.

SparkPlug on February 8, 2012 at 1:22 PM

And the theoretical game at least proves my point…
JohnGalt23 on February 8, 2012 at 1:16 PM

And only in theory.

The stockholders would move their investments.
The cost, over time, would be entirely pushed to the end user over the entire industry. The firm that doesn’t, dies.

Theory may look good behind the ivory walls, but that still ain’t reality.

How in the heck did you ever come up with JohnGalt?

cozmo on February 8, 2012 at 1:22 PM

Santorum described the ability to regulate consensual homosexual acts as comparable to the states’ ability to regulate other consensual and non-consensual sexual behavior, such as adultery, polygamy, child molestation, incest, sodomy, and bestiality,

Homosexuality = child rape. The Gospel according to Frothy.

You want to sell that to the American people in this day and age? You’d best have those shoes shined to a high-mirror gloss, and have a firm handshake and a story to tell

JohnGalt23 on February 8, 2012 at 10:07 AM

By saying the states have the right to regulate behavior, Santorum has just equated all behavior to all other behavior?

If that reasoning is logical, then why stop there? Why not claim that Santorum equated adultery to child molestation, and polygamy to incest? By your claim, he just declared all of it to be exactly equivalent.

Because that is the meaning of equate, and Santorum did no such thing. Let go of the obsession. You can still argue against Santorum without relying on obviously false claims.

Can’t you?

tom on February 8, 2012 at 1:22 PM

Now, you are a firm that manufactures widgets. Each widget costs you $50 to produce, you have one competitor that also produces widgets at $50 a piece. You find that, at market conditions, you both maximize your sales and profits at a price of $100.

The government comes along and imposes a $15 tax on your widgets. You say, well, I’ll just pass the tax all onto my customers, and charge them $115 for widgets.

How does your business do?

JohnGalt23 on February 8, 2012 at 12:38 PM

I actually typed up a big long response until I realized that I fell into your straw man trap (at which point I laughed at myself for falling for it, and for you for believing it) and dusted myself off.

How many businesses have a 100% profit margin?

None that I know of… unless they are artificial monopolies. Let’s play with a scenario much more closer to reality.

Let’s say that you and your competitor both make widgets that cost $50 to make, with market conditions that allow you both to sell them for $60. (That’s a 20% profit margin.)

Government comes along and imposes a $15 tax (like you suggested).

I would raise my prices $15. Let’s say my competitor sees blood in the water and decides to absorb the entire amount in an effort to grab my marketshare. I counter by changing the marketing message to appeal to a demographic more concerned about quality than about price. My competitor tries to counter that image. But in the meantime… something interesting occurs.

My competitor is LOSING money at $5 per widget. In an attempt to control costs and level out, he tries some cost cutting by not replacing workers lost through attrition. Some of his employees start to get nervous and the better ones start looking for alternate job opportunities. Some of them even interview with me.

It has now become a self-fulfilling prophesy. My competitor is losing more and more money as more and more customers switch to him. If he raises his costs now, customers will balk. And with the loss in knowledge (since the smarter employees are now leaving), quality really is suffering.

When my competitor declares bankruptcy, I plan to swoop in and buy up his equipment at fire-sale prices, allowing me to cut the cost in production by $5 a widget, AND snatch up his better employees.

I now have an advantage over my other competitors since I can now produce the widget at $45 instead of $50… AND I’ve also snatched up some customers from my now defunct competitor, AND have higher perceived quality AND have higher actual quality. I also have a stable bottom line which looks good to those who want stable suppliers for long-term contracts.

Only an idiot would absorb all the costs without the revenue to cover it, for that way lies bankruptcy…

dominigan on February 8, 2012 at 1:23 PM

There is a case to be made for Santorum’s viability as a general election candidate, and for his ability to win the primary, but true conservatives are not going to like it. Santorum is a Reagan Democrat, conservative Catholic wing. Reagan Democrats are swing voters who helped elect Nixon when they were known as the silent majority, disgusted with their traditional party for its radical leftist tilt. They were essential to the Reagan coalition in 1980 and 1984. Their defection to people like Perot and Buchanan in 1992 and 1996 helped elect Clinton. Their disgust with prissy establishment elitists like John Kerry and Al Gore helped get Bush elected in 2000 and 2004; they deserted the Republicans in droves in 2008 and helped elect Barack Obama.

The Republicans need these people back in 2012 if they hope to win. They are really angry with Barack Obama right now, and are ripe for the taking. Neither Romney nor Gingrich nor Paul is a natural fit for them. Santorum is.

Unfortunately for the conservative base, Santorum will have to tack left to woo these voters. He has no problem with that; look what he did in 2006 during his failed senate bid. All these big government, pro-labor, minimum wage increasing, social security and medicare pandering positions that conservatives are willing to overlook as necessary compromises for a blue state senator will be back on the table by Super Tuesday. Santorum is going to have to go there to win. You comfortable with that, conservatives?

Mr. Arkadin on February 8, 2012 at 1:23 PM

Romney called him “Rick Soros” yesterday, no kidding.

Suppose it was on purpose?

Schadenfreude on February 8, 2012 at 12:56 PM

Did anybody bother telling Romney that Soros wants Mittens or Obama as POTUS?

Gladtobehere on February 8, 2012 at 1:26 PM

Why re-write if it still true the next day… Captain Ed & Boss Emirates Emeritus for the Win!!!

Y314K on February 8, 2012 at 12:53 PM

FYI, MM is not an Arab. :-)

TxAnn56 on February 8, 2012 at 1:29 PM

“Your mother sews socks that smell.”

SparkPlug on February 8, 2012 at 1:11 PM

SNL.. original cast,.. Richard Pyrer guested….

Do I gets a cookie?

mark81150 on February 8, 2012 at 1:13 PM

Sure. One cookie for you. Good call. (:

SparkPlug on February 8, 2012 at 1:15 PM

ooooouuuuuuuhh….

“Thank ye kindly”…

“Watch your top knot.”

mark81150 on February 8, 2012 at 1:30 PM

These supporters have basically helped to, at least temporarily, stall whatever momentum Romney was building.

Oh baloney. No one’s supporters have done anything of the sort. If anything, Romney’s supporters have relied too heavily on the electability argument, and allowed the ABR/purist cons to paint him as something other than a conservative. But if you are trying to float the notion that Romney supporters are somehow responsible for Santorum’s success last night, that is just ridiculous. Romney bears some responsibility and Santorum certainly deserves credit, thatis the reality.

Priscilla on February 8, 2012 at 1:31 PM

As for the guy who wrote something about ‘gelicals eschewing “popism”, wth is that? Even the OED doesn’t recognize that word.
In the inestimable words of trolls, “Got a link for that?”
(“popism”, i mean. some people need help)

~(Ä)~

Karl Magnus on February 8, 2012 at 10:23 AM

Try looking up popery and papism, both of which mean the same thing, and both of which are easily found in good dictionaries.

Both of those words mean a rejection of the Pope, and are both relevant in response to the claim that Baptists and Protestants got “their marching orders” from a Catholic.

tom on February 8, 2012 at 1:32 PM

Since conservatives must push Romney to the Right, I guess conservatives must push Santorum to smaller government.

Am I into something here?

ProudPalinFan on February 8, 2012 at 1:32 PM

The electability argument for Romney over santorum fails… big time now. SANTORUM wins on electability…
First, in today’s and yesterday’s numbers, Rasmussen has Santy up by 1 vs O, while Mitt is down by 3. Fact is that people like Santorum, believe he is honest, and he provides a clean contrast with O. People dislike Romney, believe he is dishonest, and he provides a muddled contrast with O.
Most important, if we stipulate that Santorum will excite the base, and Mitt won’t, Santorum wins double big time vs Mitt on electability. The reason is $$$. This election will come down to $$ vs O. The base will donate HUGE $ to Santorum. Romney may raise maybe $300 million, but that won’t be enough. Santorum will raise well over a $ billion dollars…. if he excites the base. Yes, WE will donate major $ to Santorum, and not to Romney. And, having as much or more $ than O is not optional. This is required to beat O.

anotherJoe on February 8, 2012 at 1:32 PM

And only in theory.

The stockholders would move their investments.
The cost, over time, would be entirely pushed to the end user over the entire industry. The firm that doesn’t, dies.

Theory may look good behind the ivory walls, but that still ain’t reality.

How in the heck did you ever come up with JohnGalt?

cozmo on February 8, 2012 at 1:22 PM

First of all, it’s a name of a character in an Ayn Rand novel, called Atlas Shrugged. Perhaps you’ve heard of it? 8)

Second, a firm doesn’t have to push the whole cost of the tax onto the consumer. Depending on the responsiveness of demand to price, they need only lower the price enough so that their increased sales makes up for the loss of post-tax profit per unit. If the demand is extremely responsive to price, their price need only be a little lower than the competition’s price, and they will steal a large chunk of the market, and leave their comretition high and dry.

Third, to some extent, you are right. When you impose a tax unevenly across an industry or an economy, over time, the markets would adjust. Impose the tax on the entire economy, capital will start looking for another economy to go to.

But if you do it by giving a special break to “manufacturers”, as opposed to “non-manufacturers”, it distorts the national economy. Productive capital in some sectors, say “tourism”, will move to a less productive use in “manufacturing”, simply because of the tax differential.

That is wasteful, pure and simple.

Fourth, you start giving that tax break only to “manufacturers”, there will be strong pressure put on people who write those laws and regulations to make sure certain firms are included as “manufacturers”, and that certain firms aren’t. Which, in addition to causing a further distortion

JohnGalt23 on February 8, 2012 at 1:33 PM

If that is overly sensitive, maybe because I like some others, have lived in a trailer park, I’d match up my IQ with anyones, but we didn’t all have the option of college, or parents making more than a hundred grand a year to give that boost up.. I felt comfortable in Reagan’s party, he wasn’t the kind to insult lower income conservatives. He welcomed us for our social values, and our commitment..

Romeny’s voters seem to be sending the message,.. bad, bad peasant, sit, siiiiiit… oh no, you stupid mutt… come mere.

I plan to get my kids to college, but don’t for one, think that base voters are all inbred morons, two, that because the con base disagrees with the choice of Romney, that proves the first point.

It “proves” Romney hasn’t campaigned in any way designed to get our support. He and his supporters are so often tin eared and tone deaf, they don’t even realize how badly they come off compared to someone like Santorum.

mark81150 on February 8, 2012 at 1:01 PM

I grew up in a trailer park, too, but have as an adult–largely because of my profession–encountered and have counted as friends several people comprising that evil 1%–those who grew up in privileged circumstances, went to the best schools, live in extraordinary nice homes, and never, ever need to worry about the electricity going off because they couldn’t make the bills. In my experience, the vast majority of people with money are grounded, smart, and carry around less personal baggage and character defects than most other people do of any economic class. Point is, very few are snobs. Most work hard for their money–60, 70-hour work weeks are not uncommon.

All I’ve read and heard about Mitt Romney personally, the man not the politician, has been positive. By all accounts, those who know him–even if they disagree with his politics–like him. He and his wife have given more to charity in any given year than I will make in a lifetime. His children are well-adjusted and successful. Romney doesn’t suffer fools very well but neither do I and so don’t hold that against him. He’s also filthy rich, but–unlike millionaire Newt Gingrich–I don’t hold that against him, either.

Romney’s big problem as a candidate comes down to his seeming inability to connect with voters on an emotional level. He’s a somewhat introverted, reserved guy–to which I can also relate–and this comes off as disdainful to voters accustomed to politicians like Clinton, who genuinely loved the meet-and-greet, kiss-the-baby aspects of the job.

So no, Romney’s not a snob or better-than-thou elitist. He’s just not good with people. If anything kills his candidacy, it’s that particular shortcoming, not RomneyCare.

troyriser_gopftw on February 8, 2012 at 1:35 PM

Decojonified Coultergeist

Schadenfreude on February 8, 2012 at 1:36 PM

So, all of you Mhit-For-Brains folks, how’s that “electability” thing working out for you???? RINO Romney has shown that ALL Willard (from the RAT movie of the same name) has, is Lies and Inuendo, Just like Axelrod and the J@ck@ss-In-Chief. No wonder the evil George Soros says there’s not a dimes worth of difference. And this is the candidate that the RepublicRAT establishment is promoting??? OBAMA-LITE??? If All Willard’s got is an attack machine, well, America already has one of those in the WH!?! America, YOU ARE BEING MISLED by the RepublicRAT establishment and the DoltocRAT MSM!?! RINO Romney is NOT the answer!?!

Colatteral Damage on February 8, 2012 at 1:36 PM

Reading some comments here. Here we go again.

I guess every Santorum thread is going to degenerate into a discussion on homosexuality because the gay agenda has it in for him.

The vast majority of conservatives agree with Santorum.

That does seem to be the pattern. I have to wonder how much of the opposition to Santorum is based on concern over gay issues, at least on Hot Air. The claim that it’s going to destroy Santorum seems way overblown to me.

Whether you like Santorum’s actual views or not, they are not extremist and they are mainstream. They are being taken out of context and twisted to look extreme, but he is NOT going to legislate religion or go into people’s bedrooms.

When voters get to hear him for themselves and get to know his REAL positions on these issues, they will find him reasonable and likable.

The opinions of those with an agenda will not matter in the general election.

Elisa on February 8, 2012 at 10:42 AM

All tue, and very much on point.

Calling a conservative an extremist is an old tactic, but usually a failed one. It fails because the person then speaks for himself, and people see that the “extremist” label is just hyperbole from an opponent. We kind of expect hyperbole from opponents in politics.

tom on February 8, 2012 at 1:37 PM

Meechelle make me ill. What a disgrace for a first lady. Right in front of George Washington.

SparkPlug on February 8, 2012 at 1:22 PM

Whaaaat? You can’t picture Mrs. Kennedy, Mrs. Johnson, Mrs. Nixon, Mrs. Ford, Mrs. Carter, Mrs. Reagan, the two Mrs. Bushs, even Mrs. Clinton, doing that?

I can. In a heartbeat.

////

Flora Duh on February 8, 2012 at 1:37 PM

and if you want to hear from his own mouth what he actually thinks about the Tea Party go watch this. There is no mistaking his antipathy for the Tea Party movement.

Terrye on February 8, 2012 at 12:37 PM

Thanks for that link, Terrye. As a result of watching the clip, I now support Rick more than ever. He’s absolutely right in saying that “libertarianism is not conservatism.” Ron Paul is a true naive libertarian, and he only gets a tiny fraction of the conservative vote as a result.

I also admired Rick’s good sense in explaining his view of earmarks. His criticism of McCain in this matter is right on target, since McCain is a big hypocrite who avoided talking about entitlements and went after earmarks instead so that he get all the glory without having to confront the hard realities. This is typical of the way McCain opportunistically exploited politics in general.

The only thing I don’t understand is why all these clips were put on a “Mitt for Prez” site. Why didn’t they put something actually damaging about Rick so that Mitt might look better in contrast?

(By the way, just to tell you, I consider myself a Tea Party fiscal hawk in the conservative-libertarian wing, and I can definitely assure you I prefer earmarks to mandated state-fascist health care any day of the week.)

Burke on February 8, 2012 at 1:39 PM

Romney’s big problem as a candidate comes down to his seeming inability to connect with voters on an emotional level. He’s a somewhat introverted, reserved guy–to which I can also relate–and this comes off as disdainful to voters accustomed to politicians like Clinton, who genuinely loved the meet-and-greet, kiss-the-baby aspects of the job.

So no, Romney’s not a snob or better-than-thou elitist. He’s just not good with people. If anything kills his candidacy, it’s that particular shortcoming, not RomneyCare.

You are correct, but Romney’s “coldness” won’t be a deal breaker for him. For one, he’ll be running against another cold fish, Barack Obama. The Democrats won’t have the Clintonian empathy advantage this cycle.

As far as personality goes, I’d rather drink a cider with Romney than a beer with Barack Obama. This election will be decided on issues.

Mr. Arkadin on February 8, 2012 at 1:41 PM

First of all, it’s a name of a character in an Ayn Rand novel, called Atlas Shrugged. Perhaps you’ve heard of it? 8)

JohnGalt23 on February 8, 2012 at 1:33 PM

Ya’ don’t say.

The book didn’t take very well with you then.

cozmo on February 8, 2012 at 1:41 PM

Romney’s opposition research is on full speed right now. It will be interesting what they come up with since so little is known
about the Santorum.

Amjean on February 8, 2012 at 9:01 AM

This is classic projection. What you really meant to say is that you’re a Romneybot. Romney’s ignored Santorum to verbally joust with Newt. He did so at his peril. This is just another good reason NOT to allow Mittens the nomination. He’s too easily distracted by verbal static. And as a result, Santorum is back in the race.

Reminiscent of the whack~job in the WH now.

DevilsPrinciple on February 8, 2012 at 1:43 PM

How in the heck did you ever come up with JohnGalt?

cozmo on February 8, 2012 at 1:22 PM

Well he wasn’t named Adam Smith for a reason…don’t engage him, simple basic business econ confuses him…

right2bright on February 8, 2012 at 1:45 PM

Clinton, who genuinely loved the meet-and-greetbed, kiss-the-babe aspects of the job.

troyriser_gopftw on February 8, 2012 at 1:35 PM

galtani on February 8, 2012 at 1:45 PM

DevilsPrinciple on February 8, 2012 at 1:43 PM

He forgot to put a stake through Santorum’s heart when he was weak.

cozmo on February 8, 2012 at 1:45 PM

Since conservatives must push Romney to the Right, I guess conservatives must push Santorum to smaller government.

Santorum was a small government warrior in the 90s and followed the Bush agenda in the 00s.

Romney ran as a liberal in the 90s, ran as a moderate in the 00s, and governed as a liberal.

I think it will be a good idea to keep pushing on President Santorum, but there is actually a good hope we’ll at least get a Santorum that lies between the “Radical Republican” of the 90s and the average Republican Senator of the 00s. Even the worst case, that he only tries to pull us back to the size and scope of 2007, is a major win.

And note the worst case with Santorum is probably better then the best case we could expect to get out of a President Romney.

18-1 on February 8, 2012 at 1:46 PM

Well he wasn’t named Adam Smith for a reason…don’t engage him, simple basic business econ confuses him…

right2bright on February 8, 2012 at 1:45 PM

It’s not for the esteemed Mr. Galt. Its for the lurkers who may actually be paying attention to his swill.

cozmo on February 8, 2012 at 1:47 PM

What an interesting primary season. We’ll have to see how Santorum does once he gets a few nastyballs lobbed at him from both Romney and the LSM.

Thank you, Mrs. Palin, for suggesting that we don’t have a coronation, vet these people a little bit and even vote for Newt, even though I disagreed with you saying to vote for anyone.

Now we’ve found out a little more on these candidates, some good, a lot bad and the people of Colorado, Minnesota and Missouri were able to make a statement.

Thank you, once again, for taking the shots that no one else seems willing or capable of taking.

kim roy on February 8, 2012 at 1:50 PM

dominigan on February 8, 2012 at 1:23 PM

How many businesses have a 100% profit margin?

I only chose it to keep the numbers simple. The principle applies regardless of margins or size of taxes. What is important is the responsiveness of the demand to price changes

I would raise my prices $15. Let’s say my competitor sees blood in the water and decides to absorb the entire amount in an effort to grab my marketshare. I counter by changing the marketing message to appeal to a demographic more concerned about quality than about price. My competitor tries to counter that image. But in the meantime… something interesting occurs.

Ah. So, you’re going to rely on superior marketing, to try to overcome massive price differential. It’s a strategy. Of course, it increases your cost per unit, thus further disadvantaging you on either profit, or if you are adamant about passing it on to the consumer, revenue.

And, what is to simply stop your competitor from following the exact same strategy to counter yours. You assume you are going to do it better than him, when there is no evidence for that. Poor economics.

My competitor is LOSING money at $5 per widget.

Fair enough. He can’t absorb it all, so he passes some of it onto the consumer. He passes on $10 to the consumer, and pays $5 out of his profits, settling at a price of $70, to your price of $75 dollars.

Now, why am I, as a rational consumer, going to go out and buy your widgets at $75, when I can walk across the street and buy them from your competitor, at a 6% discount?

Magic, perhaps?

The answer is, they are not. They are all going to your competition, which means that you have no revenues, and his revenues are booming.

Still planning on following a strategy of passing all the tax on to your customer? Because your shareholders are getting nervous about the drop in revenue… to zero. Which means…

In an attempt to control costs and level out, he tries some cost cutting by not replacing workers lost through attrition. Some of his employees start to get nervous and the better ones start looking for alternate job opportunities. Some of them even interview with me.

It has now become a self-fulfilling prophesy. My competitor is losing more and more money as more and more customers switch to him.

Really never happens.

You, too, should go back and demand a refund.

JohnGalt23 on February 8, 2012 at 1:50 PM

These supporters have basically helped to, at least temporarily, stall whatever momentum Romney was building.

Oh baloney. No one’s supporters have done anything of the sort. If anything, Romney’s supporters have relied too heavily on the electability argument, and allowed the ABR/purist cons to paint him as something other than a conservative. But if you are trying to float the notion that Romney supporters are somehow responsible for Santorum’s success last night, that is just ridiculous. Romney bears some responsibility and Santorum certainly deserves credit, thatis the reality.

Priscilla on February 8, 2012 at 1:31 PM

The truth hurts, doesn’t it? That’s what happens when you tell average Conservative Americans in the Heartland that they have to vote for a Northeastern Squish.

Kleenex, precious?

kingsjester on February 8, 2012 at 1:51 PM

This was a devastating loss for Romney.

I live in CO, and believe me, Romney spent a TON of cash and resources in this state. Almost all the ads I saw was for Romney. I got direct mail, phonecalls and even a house visit from a Romney campaign worker.

And yet, he got beaten to pulp by someone who spent next to nothing in this state. Imagine what the margin would have been if Santorum had money & organization.

Tells you how incredibly weak Romney really is. I don’t think he will become the nominee after this disaster. Romney is finished, there is absolutely ZERO heartfelt support for him aside from the astroturf.

Norwegian on February 8, 2012 at 1:54 PM

Well he wasn’t named Adam Smith for a reason…don’t engage him, simple basic business econ confuses him…

right2bright on February 8, 2012 at 1:45 PM

Still waiting for an answer to what happens when your competitor prices you out of business.

JohnGalt23 on February 8, 2012 at 1:54 PM

Still waiting for an answer to what happens when your competitor prices you out of business.

JohnGalt23 on February 8, 2012 at 1:54 PM

You ask Obama for a bailout!

Gladtobehere on February 8, 2012 at 1:57 PM

Still waiting for an answer to what happens when your competitor prices you out of business.

JohnGalt23 on February 8, 2012 at 1:54 PM

You ask Obama for a bailout!

Gladtobehere on February 8, 2012 at 1:57 PM

That is what Frothy’s tax break to “manufacturers” amounts to.

JohnGalt23 on February 8, 2012 at 1:58 PM

That is what Frothy’s tax break to “manufacturers” amounts to.

JohnGalt23 on February 8, 2012 at 1:58 PM

You sure worked hard to finally get to your destination…a Santorum attack…again.

cozmo on February 8, 2012 at 2:00 PM

Oooo, Rush played a clip of the Donald all blustery and pissed with his tightey whiteys all in a twist because of the Santorum blow out of his boy, Romney. This guy is a little too stuck on himself and how much influence he actually has on the little people. Yeah, granted we don’t have the millions to throw around like him and his ilk. Instead, we like to think for ourselves. So I guess if we don’t do as he says and nominate Romney he’ll play the spoiler a la Ross Perot. What a clown!

mozalf on February 8, 2012 at 2:01 PM

Ya’ don’t say.

The book didn’t take very well with you then.

cozmo on February 8, 2012 at 1:41 PM

Took with me OK. The novel demonstrated at least a basic understanding of economics.

Which you have not.

JohnGalt23 on February 8, 2012 at 2:02 PM

Mr. Arkadin on February 8, 2012 at 1:23 PM

It is arguable that PA is a blue state with a Republican governor and house. It doesn’t matter what you think Obama believes to the contrary.

DevilsPrinciple on February 8, 2012 at 2:02 PM

hey awesome! GOP primary voters were down in those 3 states, looks like we are super excited about Romney and Santorum!

conservador on February 8, 2012 at 2:02 PM

You sure worked hard to finally get to your destination…a Santorum attack…again.

cozmo on February 8, 2012 at 2:00 PM

Cry me a river.

Now, tell me how a firm pays none of a tax, and the consumer pays all of it? Because I just demonstrated that it simply is not the case.

JohnGalt23 on February 8, 2012 at 2:03 PM

We’re not gonna solve this debt/deficit/size of government mess if we nominate a guy who thinks the problem is not the big machine itself, it’s whoever’s running it.

It’s a pretty sad state of affairs when a candidate has spent much of his political career supporting deficit-ballooning, big-government, anti-right-to-work policies, but all he has to do is go “Yay God! Boo gays!” to win the conservative votes.

TMOverbeck on February 8, 2012 at 2:06 PM

JohnGalt23 on February 8, 2012 at 2:03 PM

Sure you did…bless your heart.

cozmo on February 8, 2012 at 2:08 PM

Really never happens.

You, too, should go back and demand a refund.

JohnGalt23 on February 8, 2012 at 1:50 PM

Then you will explain to us how the US continues to lose manufacturing jobs to overseas competitors using which line of reasoning ?

Aren’t taxes part of the cost of doing business ? And are those costs not passed onto the end user or even taxpayer ?

Which book on economics was this that you claimed explained it for you ? Mickey Mouse ?

You’re confusing economics and finance. Start with looking up their respective definitions. I see clarity in your future.

Maybe.

DevilsPrinciple on February 8, 2012 at 2:10 PM

It’s a pretty sad state of affairs when a candidate has spent much of his political career supporting deficit-ballooning, big-government, anti-right-to-work policies, but all he has to do is go “Yay God! Boo gays!” to win the conservative votes.

TMOverbeck on February 8, 2012 at 2:06 PM

This is more an anti-Obama and anti-Romney vote, not pro-Santorum. Santorum hasn’t done very well until the other “conservative” candidates sunk themselves, and he started attacking Romneycare and Obamacare more aggressively.

Gladtobehere on February 8, 2012 at 2:11 PM

Sure you did…bless your heart.

cozmo on February 8, 2012 at 2:08 PM

I’ll take that as: “You’re right. A tax is shared by both firm and customer in some proportion, and people who say otherwise are economic illiterates”.

And give you the benefit of the doubt.

JohnGalt23 on February 8, 2012 at 2:11 PM

The truth hurts, doesn’t it? That’s what happens when you tell average Conservative Americans in the Heartland that they have to vote for a Northeastern Squish.

Kleenex, precious?

kingsjester on February 8, 2012 at 1:51 PM

No thanks. After 20 years as a military wife, listening to the kind of juvenile crap that military people hear from the likes of you, I can handle a little condescending snark from a 4rd rate blogger.

Priscilla on February 8, 2012 at 2:12 PM

Mitt Romney is a guaranteed loser. Hopefully the GOP establishment will soon see the writing on the wall, bail on Romney, and try to bring in a different candidate with enough conservative street cred to rally the base (DeMint? Jindal? Ryan?). I like Rick Santorum, but his past controversial stances on social issues would be a dangerous distraction in the general election. Newt is his own worst enemy, and his inability to take down a liberal ex-governor of friggin’ Massachusetts in a GOP primary seriously calls into question his ability to pick winning fights with Obama in the general election. And Mitt Romney, well, he is a liberal who will simultaneously blow this election and make the public think Obamacare wasn’t all that radical after all.

I pray that we get a new candidate who can unite the party. But if not, Santorum is probably the best that we can do this cycle, and we’ll just have to hope he can keep his cool in the debates and keep this election focused on the economy.

Lawdawg86 on February 8, 2012 at 2:16 PM

I’ll take that as: “You’re right.

JohnGalt23 on February 8, 2012 at 2:11 PM

Go for it, in Obama world, each child, no matter how wrong, gets a trophy. Accept the trophy you gave yourself.

cozmo on February 8, 2012 at 2:18 PM

Priscilla on February 8, 2012 at 2:12 PM

A military wife? Thank your husband for his service.

By the way, if you will read the thread without your Romney shades on, you’ll see that I’m not the only one who called you on your disingenuousness.

kingsjester on February 8, 2012 at 2:18 PM

…but Romney’s “coldness” won’t be a deal breaker for him. For one, he’ll be running against another cold fish, Barack Obama. The Democrats won’t have the Clintonian empathy advantage this cycle.

As far as personality goes, I’d rather drink a cider with Romney than a beer with Barack Obama. This election will be decided on issues.

Mr. Arkadin on February 8, 2012 at 1:41 PM

Well done! My sentiments exactly.

Slainte on February 8, 2012 at 2:21 PM

DevilsPrinciple on February 8, 2012 at 2:10 PM

Then you will explain to us how the US continues to lose manufacturing jobs to overseas competitors using which line of reasoning ?

Real simple. The bulk of manufacturing costs in this country are labor costs per unit, and all the attendant costs that go with labor. Labor is cheaper overseas. Capital becomes a much larger portion of the cost variable in the profit equation (P=R-C), and thus is attracted to the lower labor costs.

Even if you impose a tax,in the form of a tariff on them, they will still only pay a portion of that tax. The rest of it they will pass on to the consumer, in the form of a price hike, large enough to protect their proft=its, but still small enough as to keep the price of their goods lower than the ones made here.

Aren’t taxes part of the cost of doing business ? And are those costs not passed onto the end user or even taxpayer ?

They are, and depending on the good, either a greater or lesser share of the tax is paid by the firm, in the form of lower profits than the firm would have absent the tax, and the remaining portion is paid by the consumer in higher prices, once again absent what they would have otherwise paid in a non-tax situation.

If a good is likely to see a steep drop in demand due to a rise in price, the firm is likely to pay nearly all the tax out of profits. Consumers will respond to a price hike by simply finding substitutes. Sugar is an example of this. Put a tax on sugar, and if the firm tries to pass the tax onto the consumer in the form of a price hike, the customer will substitute untaxed corn syrup.

Likewise, if a good is likely to see little response in demand to a price hike, most of the tax can be passed on to the consumer. The classic example of this is insulin. There really is no substitute for someone who needs insulin. You put a tax on it, and the producer can pass it all onto the consumer, and the consumer can’t say “boo”.

Which book on economics was this that you claimed explained it for you ?

That’s pretty much out of your Intro to Micro. Other factors eventually come in, but you can’ escape those basic truths about pricing and taxes.

JohnGalt23 on February 8, 2012 at 2:26 PM

By the way, if you will read the thread without your Romney shades on, you’ll see that I’m not the only one who called you on your disingenuousness.

I appreciate that.

Now, perhaps you can explain how I was disingenuous? I don’t recall ever telling you or your Heartland Conservative friends that you “had” to vote for anyone. In fact, it is my distinct impression is that it is you, with your wonderful Heartland values, that has told me that if I support Romney, then we are not on the same side.

I have always said that I will vote for the eventual Republican nominee, no matter who that is. I happen to hope that it is Romney ,and that he is the best candidate. I respect your different view, but not the way you express it. Sorry if you find that disingenuous- I don’t think that it is.

Priscilla on February 8, 2012 at 2:26 PM

…but Romney’s “coldness” won’t be a deal breaker for him. For one, he’ll be running against another cold fish, Barack Obama. The Democrats won’t have the Clintonian empathy advantage this cycle.

As far as personality goes, I’d rather drink a cider with Romney than a beer with Barack Obama. This election will be decided on issues.

Mr. Arkadin on February 8, 2012 at 1:41 PM

Well done! My sentiments exactly.

Slainte on February 8, 2012 at 2:21 PM

If it was just Obama vs. Romney, you guys might be right. Unfortunately, the media will fight to the death for Obama, and too many voters form their opinion based on what the media tells them.

Gladtobehere on February 8, 2012 at 2:27 PM

This election will be decided on issues.

If it is Santorum v Obama certainly.

Romney though? What issues will he disagree with Obama on? Healthcare mandates, AGW, judges, abortion?

Romney can’t draw much of a distinction from Obama on the issues.

18-1 on February 8, 2012 at 2:29 PM

That’s pretty much out of your Intro to Micro. Other factors eventually come in, but you can’ escape those basic truths about pricing and taxes.

JohnGalt23 on February 8, 2012 at 2:26 PM

can’t escape, rather.

JohnGalt23 on February 8, 2012 at 2:30 PM

Real simple. The bulk of manufacturing costs in this country are labor costs per unit, and all the attendant costs that go with labor. Labor is cheaper overseas. Capital becomes a much larger portion of the cost variable in the profit equation (P=R-C), and thus is attracted to the lower labor costs.

I suppose I should point out that in the above equation, C = (K+L), where K = capital’s share of the cost per unit, and labor’s share of the same cost, and that those two necessarily add up to 100% of C.

JohnGalt23 on February 8, 2012 at 2:33 PM

2JonhGalt23:
in one country market, it doesnt even matter, which company survives and how much tax is passed on to the consumer, net is unchanged. But in a global marketplace, if american companies cant compete, it is net loss for America.

anikol on February 8, 2012 at 2:36 PM

in one country market, it doesnt even matter, which company survives and how much tax is passed on to the consumer, net is unchanged. But in a global marketplace, if american companies cant compete, it is net loss for America.

anikol on February 8, 2012 at 2:36 PM

The same principle applies to international economics, although in very different terms. Part of the cost of a firm bolting the US and going overseas is the risk of nationalization, or the failure of the foreign country to honor contracts which (until recently… ahem… Chrysler… ahem) isn’t a problem in this country.

But if the US spreads a 35% tax across the entire economy in the form of corporate taxes, portions of that tax are born out of their corporate profits, and they will seek to go overseas, even absent the labor cost differential, and even given the risk of nationalization and contract reneging.

But keep in mind, just because America sees a loss because of lost demand for labor, we see a benefit in the lower cost of goods in this country, which allows us to either consume more, or (if we are wise) to save a portion of our national income.

JohnGalt23 on February 8, 2012 at 2:44 PM

this three-state loss … makes Romney look a lot less inevitable.

Statements like this are what I don’t get. At this stage of the game, how is Romney, or any other candidate, inevitable other than in the minds of the persons or groups thinking it, speculating it, fantasizing it or conceding it? It still amazes me how after a mere five states media concluded that it’s inevitable or it’s over and then, bam, one candidate takes three states in one night without netting a single convention delegate, and poof, it’s suddenly a race. Still got 42 states and 5 months of primaries/caucuses to go and, based on last night’s results, perhaps the media has no more of a clue than any of the rest of us how people will vote.

BTW, anybody consider that the vote for Santorum might be the conservative base’s response, not only to the Mitt, but to the Donald’s endorsement of the Mitt? Especially when today Trump is talking about a cabinet post in the mythical Romney admin and is quoted saying, “I don’t get Rick Santorum,” which to me is code for “WTF!” and I don’t mean “winning the future.”

stukinIL4now on February 8, 2012 at 2:44 PM

I am a “retired business man” from the world of investment banking. And by retired I mean I got sick of it, took the money and ran away to an undisclosed location in the mountains to ski and golf. :) So I too know a little something about valuation.

Everyone is so testy whenever r/e investing comes up these days. Sheesh.

angryed on February 8, 2012 at 12:36 PM

I’m not testy. Just felt like you were being patronizing. But I still like you, so trust me it’s no big deal.

When I say I retired what I mean is I too took the money and ran.

flyfisher on February 8, 2012 at 2:49 PM

That’s pretty much out of your Intro to Bullsh!t Micro. Other factors eventually come in, but you can’ escape those basic truths about pricing and taxes.

JohnGalt23 on February 8, 2012 at 2:26 PM

<

blockquote>Real simple. The bulk of manufacturing costs in this country are labor costs per unit, and all the attendant costs that go with labor. Labor is cheaper overseas. Capital becomes a much larger portion of the cost variable in the profit equation (P=R-C), and thus is attracted to the lower labor costs.

The per unit cost is also based on a method of reporting the value of the inventory for producing the good to the IRS. Thus the cost of the taxes is built into the final good value.

Even if you impose a tax,in the form of a tariff on them, they will still only pay a portion of that tax. The rest of it they will pass on to the consumer, in the form of a price hike, large enough to protect their proft=its, but still small enough as to keep the price of their goods lower than the ones made here.

JohnGalt23 on February 8, 2012 at 2:26 PM

<<strongThey will pay ALL of the value of the tax they report as inventory OR will be reported/charged by the entity that acts as their agent.

All taxes are charged to the end user. Manufacturers make or don't make their margins regardless of the taxes.This is basic accounting. Obviously, you do not understand the difference between accounting, finance and economics.

It is quite clear that you don’t have a clue about taxation and acconting methodology as it applies to production and inventory.

Customers don’t say “Please Mr Manufacturer, change the taxation level on my new Acme 1000 flying widget”,they negotiate the asking price.

Taxes ARE ALWAYS a business cost in the products end price.

DevilsPrinciple on February 8, 2012 at 2:51 PM

…but Romney’s “coldness” won’t be a deal breaker for him. For one, he’ll be running against another cold fish, Barack Obama. The Democrats won’t have the Clintonian empathy advantage this cycle.

As far as personality goes, I’d rather drink a cider with Romney than a beer with Barack Obama. This election will be decided on issues.

Mr. Arkadin on February 8, 2012 at 1:41 PM

You’re right. Unfortunately, the “issue” that will win this election is that during a time of financial crisis and economic chaos, Obama and his big-government liberal cohorts destroyed any prospect of economic recovery by pursuing a socialist, universal health care entitlement. Our nominee should be focused like a laser on the fact that Obamacare is to blame for the lack of recovery. Romney is unwilling and unable to engage that fight in a clear and concise attack. Our nominee needs to be able to simply argue that universal health insurance entitlements are job killers. Period. And Romney, because of his record in Massachusetts, cannot make that direct, concise attack on Obama.

Lawdawg86 on February 8, 2012 at 2:51 PM

Umm no, tht is not how the constitution works. If we had an absolute right to privacy then we wouldn’t need the fourth amendment. Get it?

And no saying there is no right to privacy does not give the government carte blanche to look at anything, anytime-the FOURTH AMENDMENT stops that.

melle1228 on February 8, 2012 at 11:02 AM

It’s even worse than that. Since the supposed “right to privacy” is defined nowhere, it means absolutely whatever the judges at the time want it to mean. It was manufactured to prevent regulation of abortion, and now it’s been extended to regulation of any kind of sexual activity, even adultery.

Adultery violates at least one marriage, so it’s hardly a case of “affects nobody but the people doing it,” since it also affects at least one spouse who presumably did not consent.

But in the wide-open it-means-whatever-the-hell-I-say-it-means sense of a “Constitutional Right to Privacy,” child molestation could just as easily fall under such a right to privacy based on no more than the current opinion of the judges.

If their opinion ever changes….

tom on February 8, 2012 at 2:54 PM

The ironic thing in all these people shilling for Santorum these days is that they are the same ones who crucified Rick Perry a few months ago for sins against conservatism far less egregious than Sanotorum opposing right to work legislation, helping to push through Medicare part D, his support for earmarks, and a bevy of other big government votes in the Senate.

DRayRaven on February 8, 2012 at 11:38 AM

Since all that basically amounts to saying he was a loyal Republican in the Bush administration, I don’t think it’s going to be taken as seriously as you suggest.

tom on February 8, 2012 at 2:55 PM

What a wild primary this has been!!

To recap:

Romney rolled along at the top of the polls, being labeled “inevitable”.

Gingrich seemed to implode in May when half his campaign staff bolted while he took a cruise in Europe and trashed Paul Ryan’s budget.

Pawlenty took a shot at Romney with his “ObamneyCare” line on a Sunday talk show, then retreated from it at a debate the very next night. Pawlenty never recovered.

Michelle Bachmann (my original first choice) won the Ames Straw Poll; Pawlenty bowed out.

Perry entered the fray and immediately shot to the first tier. Only to flame out after his debate skills were found extremely lacking. Nonetheless, Bachmann started falling after Perry got in and then hurt herself with her overreach on Perry’s Gardicil mandate by claiming that Gardicil causes cancer (or something).

Herman Cain won the Florida Straw Poll and, suddenly, found himself im the first tier. Just as suddenly, he was undone when he couldn’t put together a compentent response to all the women who claimed he as a cad. Cain then dropped out.

Newt used his debate performances to begin climbing the ladder to the first tier. Then dropped like a rock once Romney flooded Iowa with negative ads of him.

Santorum, who had spent virtually all of 2011 polling in single digits, suddenly exploded around Christmas/New Year’s — just in time for the Iowa caucases. Santorum edged Romney by a literal hair (though it took a couple of weeks for Iowa GOP to decide this). After Iowa, Bachmann got out.

Romney won New Hampshire as expected. Perry and Huntsman (nearly forgot about him) dropped out.

Newt blazed another comback during the debates ahead of the South Carolina primary, then trounced Romney in that primary. He then promptly followed this up with 2 weak debate performances ahead of Florida.

Romney unleashes an ad blitz on Newt in Florida and wins big (though not as big as one would think given his huge spending binge in Florida). Romney follows up by winning Nevada, thus trying to re-claim his inevitability mantle.

Only Santorum sweeps him in 3 states on one night, with a huge upset in Colorado.

—————————–

All of this leads to 2 conclusions:

1. ANYTHING could still happen.
2. No one is inevitable.

Bitter Clinger on February 8, 2012 at 3:01 PM

Unfortunately for the conservative base, Santorum will have to tack left to woo these voters. He has no problem with that; look what he did in 2006 during his failed senate bid. All these big government, pro-labor, minimum wage increasing, social security and medicare pandering positions that conservatives are willing to overlook as necessary compromises for a blue state senator will be back on the table by Super Tuesday. Santorum is going to have to go there to win. You comfortable with that, conservatives?

Mr. Arkadin on February 8, 2012 at 1:23 PM

I disagree. As I stated on another thread, 48% of white, blue collar workers did not even want Obama to be the nominee for 2012. Obama has written this group off, and plans to focus on professional. I come from PA and I lived here through the closing of the steel mills, etc. These are not people who are willing to lose their livlihood so that Obama can accomplish his environmental whacko dreams. They are starting to see that their unions are not looking out for them. Think about the upcoming war between the pipeline workers and the whacko environmentalists. The workers will vote for whoever can get that pipeline approved. They may not say so, but I am willing to bet when they go in the voting booth, they will be voting to get rid of the guy who stands in the way. When it comes to having a job or getting extra benefits, most would choose the job.

Night Owl on February 8, 2012 at 3:03 PM

Bitter Clinger on February 8, 2012 at 3:01 PM

Wow, a fair assessment. What’s wrong with you?

cozmo on February 8, 2012 at 3:03 PM

But keep in mind, just because America sees a loss because of lost demand for labor, we see a benefit in the lower cost of goods in this country, which allows us to either consume more, or (if we are wise) to save a portion of our national income.

JohnGalt23 on February 8, 2012 at 2:44 PM

You are clueless.

We, as a country MUST PRODUCE MORE than we CONSUME and SAVE the DIFFERENCE. <<<<< That is the formula for growing an economy, among other things. Without savings, there is NO investment.

We see NO benefits in the loss of jobs as the result of lower costs from lower cost producers outside the US.

The formula is: C + G – T = 0 (zero). C here is the Domestic Private Sector Financial Balance, G is the Government Fiscal Balance, and T is the Current Account Balance, which means a country’s Trade Deficit or Trade Surplus. You can play with all three elements, C, G or T, increasing one or decreasing the other, but the formula demands that they always sum to zero. If they don’t then you have entered an extremely unstable position where one or more of the terms are about to adjust dramatically to restore the balance.

If C is rising, because consumers are saving and deleveraging, and G is rising, because government is implementing austerity measures and cutting spending (decreasing spending improves the fiscal balance), then T has to be showing a corresponding positive balance that is increasing as fast as the other two. In plain English, the only way on this lovely green planet that the private sector (consumers and business) and government can both shrink their respective inputs into this equation is if the particular country to which we apply the formula is being enormously successful at winning export share away from countries who are already dominating the global export market. And that is a tough trick to pull off, since the big trade surplus countries have wage arbitrage and demographics on their side.

CAPISCI ?

Schools out for the day.

DevilsPrinciple on February 8, 2012 at 3:07 PM

DRayRaven on February 8, 2012 at 11:38 AM

I was a Perry supporter until he dropped out. I’m not thrilled to consider myself an erstwhile Santorum supporter; I liked Perry for his strong stance on the 10th Amendment, and Santorum does not share those same values… at all. That being said, the race is what it is right now, and there are four reasons I prefer Santorum over the rest:

1.) He is more conservative than Newt or Mitt.
2.) He is a man of far greater personal integrity than Newt or Mitt.
3.) His attack on Romneycare in the last Florida debate was the most effective and substantive conservative criticism of any candidate that I’ve seen in the entire campaign.
4.) He didn’t support the bailouts.

Lawdawg86 on February 8, 2012 at 3:07 PM

Wow, a fair assessment. What’s wrong with you?

cozmo on February 8, 2012 at 3:03 PM

I’ve just never seen a primary even remotely like this one. Perfect storm of a wretched, power-mad Democrat President combined with a weak, moderate Northeast GOP-establishment backed “front-runner” causing conservatives to constantly evaluate/re-evaluate the remaining field. The swings have been dizzying, but fun to watch.

Bitter Clinger on February 8, 2012 at 3:12 PM

That being said, the race is what it is right now, and there are four reasons I prefer Santorum over the rest:

1.) He is more conservative than Newt or Mitt.
2.) He is a man of far greater personal integrity than Newt or Mitt.
3.) His attack on Romneycare in the last Florida debate was the most effective and substantive conservative criticism of any candidate that I’ve seen in the entire campaign.
4.) He didn’t support the bailouts.

Lawdawg86 on February 8, 2012 at 3:07 PM

Well said.

Bitter Clinger on February 8, 2012 at 3:14 PM

I live in CO, and believe me, Romney spent a TON of cash and resources in this state. Almost all the ads I saw was for Romney. I got direct mail, phonecalls and even a house visit from a Romney campaign worker…

Norwegian on February 8, 2012 at 1:54 PM

So were these ads 99.9% positive or 99.9% negative?

de rigueur on February 8, 2012 at 3:14 PM

Dr. Evil. I’ve actually tried to avoid exchanging in your comments lately because you seem rather animated and I really only like the knock down, drag outs with the trolls. I would hope it never comes to that between us. But since you responded to my comment let me just repeat my point because it’s true. Santorum hasn’t really had much money from the beginning and he’s been impressively strong, albeit in surges, the entire time. People can call him Neanderthals, impugn his record and even attack his family. But it won’t change the fact that what he’s been able to accomplish has been on a shoestring and going from county to county on the ground. That’s impressive grassroots in anyone’s book except for the politically jaded.

I’ve always enjoyed your comments. I’m hoping after the primaries I will again.

hawkdriver on February 8, 2012 at 11:48 AM

If you go to the Google election page linked last night and look at all the states, Santorum has been a strong competitor to Romney in every single state, with the exception of two: Florida and New Hampshire.

Even in South Carolina where Gingrich won big, Santorum was within 10 points of Romney.

tom on February 8, 2012 at 3:15 PM

Lawdawg86 on February 8, 2012 at 3:07 PM

Dang, my natural inclination as a business guy is to lean towards Romney. That, and as a governor Romney ought to be more friendly towards the tenth amendment, even with Santorum’s defense of RTW as a state’s issue.

But, your reasoning is very compelling.

cozmo on February 8, 2012 at 3:16 PM

You’re right. Unfortunately, the “issue” that will win this election is that during a time of financial crisis and economic chaos, Obama and his big-government liberal cohorts destroyed any prospect of economic recovery by pursuing a socialist, universal health care entitlement.

lawdawg86, I think you are right for the most part, but I think the focus on Obamacare as the fundamental issue of the campaign is a bit off the mark. Obama has been wrong on so many issues, and has stalled the recovery in so many ways, that he offers the Republican candidate any number of avenues of attack that have a good chance of being lethal.

Granted Obamacare is a huge part of the problem. Doesn’t this make Romney, who has fought these battles before; who probably understands the minutae of health care better than any of the other candidates, including Obama; and who has been emphatic in his estimation that Obamacare is a disaster for the country, that much more suited to take Obama on over the issue? It took a Nixon to go to China. A reformed drunk is the best person to talk an alcoholic out of taking a drink. Maybe it takes a former mandate supporter to take down Obamacare.

I don’t think this issue is off the table with Romney at all. To beat Obama on this issue, the right is going to have to offer real alternatives to Obamacare. Health care reform is still an issue in this country; repealing Obamacare doesn’t make that go away. I don’t see Santorum, Gingrich, or Paul offering up anything worth paying attention to. Romney hasn’t really either, but he is in a better position to than those guys.

Mr. Arkadin on February 8, 2012 at 3:17 PM

Bitter Clinger on February 8, 2012 at 3:12 PM

1980…youngster

cozmo on February 8, 2012 at 3:17 PM

So again … “Mr. INEvitable” … Mr. Mittens RomneyCare gets his ass handed to him by someone that was polling single digits a month ago.

Santorum beats him in Iowa, Missouri, Minnesota, and Colorado. Newt wipes the floor with his face in South Carolina – and all Romney can do is pull out New Hampshire and Florida?

This guy can’t beat second rate opposition – but somehow we’re to believe he’s the only one who can beat Obama?

Don’t think so.

And now – give it five seconds and you’ll see the first in a barrage of negative ads against Rick Santorum coming from Romney and his supporters – and next week, they’ll be blaming Santorum for the low-state of civility in the campaign! LOL.

Mitt Romney couldn’t suck any harder if he had a Hoover vacuum cleaner plugged into his derriere!

HondaV65 on February 8, 2012 at 3:18 PM

…who probably understands the minutae of health care better than any of the other candidates, including Obama…

Mr. Arkadin on February 8, 2012 at 3:17 PM

As a practicing doctor, I think Paul would have the edge over Romney on that.

cozmo on February 8, 2012 at 3:20 PM

If it was just Obama vs. Romney, you guys might be right. Unfortunately, the media will fight to the death for Obama, and too many voters form their opinion based on what the media tells them.

Gladtobehere on February 8, 2012 at 2:27 PM

The media will be vicious to whomever the nominee is. It will make 2008 look like a game of powder puff. Assuming it’s Mitt they will make a big deal over his time at Bain and scary ghost stories about Mormonism. If it’s Santorum their spin will be that he is an extremist on social issues and pound that angle into the dirt. Because they don’t want to talk about 0webamas record or the economy. 3 years in and their still covering for him. But it will be brutal. One advantage of Mitt or Santy is that niether seem to have a ton of personal baggage like Noot. But the MFM will be in full froth mode by the summer.

Minnfidel on February 8, 2012 at 3:21 PM

So again … “Mr. INEvitable” … Mr. Mittens RomneyCare gets his ass handed to him by someone that was polling single digits a month ago.

Santorum beats him in Iowa, Missouri, Minnesota, and Colorado. Newt wipes the floor with his face in South Carolina – and all Romney can do is pull out New Hampshire and Florida?

This guy can’t beat second rate opposition – but somehow we’re to believe he’s the only one who can beat Obama?

Don’t think so.

And now – give it five seconds and you’ll see the first in a barrage of negative ads against Rick Santorum coming from Romney and his supporters – and next week, they’ll be blaming Santorum for the low-state of civility in the campaign! LOL.

Mitt Romney couldn’t suck any harder if he had a Hoover vacuum cleaner plugged into his derriere!

HondaV65 on February 8, 2012 at 3:18 PM

Great post, “HondaV65″! I like the cut of your gib! :)

jfs756 on February 8, 2012 at 3:22 PM

As a practicing doctor, I think Paul would have the edge over Romney on that.

cozmo on February 8, 2012 at 3:20 PM

I just had this image of sitting in an exam room waiting for the doctor. There’s a knock on the door and in enters Ron Paul. Scary. Maybe he’s a great physician I don’t know. But anyone who has uttered so much batshiat crazy stuff would make me run from the exam room.

Minnfidel on February 8, 2012 at 3:25 PM

Yep, still libertarian, and unlike you, I live in the real world.

cozmo on February 8, 2012 at 9:58 AM

How’s that “real world” working out for you? Dolt.

noeastern on February 8, 2012 at 3:25 PM

How’s that “real world” working out for you? Dolt.

noeastern on February 8, 2012 at 3:25 PM

Being in Texas, not too bad, thanks.

cozmo on February 8, 2012 at 3:27 PM

Minnfidel on February 8, 2012 at 3:25 PM

Remembering the last time I wanted to run out of an exam room, I would look at his hands first. But I know what you mean.

cozmo on February 8, 2012 at 3:29 PM

Still waiting for an answer to what happens when your competitor prices you out of business.

JohnGalt23 on February 8, 2012 at 1:54 PM

Sonny, I not only answered your questions, but gave you a lesson on economics that you badly needed…now go back and re-read what I wrote, and you will not only understand (a big assumption on my part) but be embarrassed by your question.

You have a lot more to learn, but at least I gave you a start…but my free lessons to you are over, no more free ride, however if you want to learn more, I will give you an address and give you a good price on tutoring you on business econ.

And here is a hint…before venturing into an argument on business practices, do a little reading on your own, do a little research on your own, and don’t try to bluff your way through an argument with an adult that has probable about 45 years of running a business to your two years of flipping burgers.

right2bright on February 8, 2012 at 3:34 PM

I disagree. As I stated on another thread, 48% of white, blue collar workers did not even want Obama to be the nominee for 2012. Obama has written this group off, and plans to focus on professional. I come from PA and I lived here through the closing of the steel mills, etc. These are not people who are willing to lose their livlihood so that Obama can accomplish his environmental whacko dreams. They are starting to see that their unions are not looking out for them. Think about the upcoming war between the pipeline workers and the whacko environmentalists. The workers will vote for whoever can get that pipeline approved. They may not say so, but I am willing to bet when they go in the voting booth, they will be voting to get rid of the guy who stands in the way. When it comes to having a job or getting extra benefits, most would choose the job.

Night Owl on February 8, 2012 at 3:03 PM

Excellent comment. But I don’t see how this analysis benefits any specific Republican candidate. Any one of our guys, including Paul, would approve that pipeline in a second. Does that mean Paul can win PA in the general?

My point is not that Santorum will have to turn into Obama to win the rust belt swing states. But he, like any candidate, will have to tack to the center. With Santorum, who is being touted as the truest conservative in the race (when he is actually to the left of where Huckabee was in 2008), this move will come naturally. In his heart he is already there. He’s tacking right now to rope in the base, and the base just isn’t getting it.

The fact that Obama is running to his base now shows weakness, not strength. It’s all he’s got left. You can piss your base off a bit if you have the center. Obama’s abandoned it. It’s an opportunity for us, if we know how to use it.

Mr. Arkadin on February 8, 2012 at 3:37 PM

HondaV65 on February 8, 2012 at 3:18 PM

Of course you are right…however, I don’t think he will attack Rick as savagely as he did Newt…Rick has the likeability factor that Newt didn’t.
Newt’s like the ugly possum, you can kick him around an no one would care, Rick is the puppy dog, you don’t kick a puppy.
Not to say he won’t go after Rick, but he will quickly learn that Mitt was more likeable than Newt, but not as likeable as Rick…and their will be a reaction to his ads.
He will have to resort to his “leaks” and using foils to get the message out about Rick, at least the message he will create and invent.
But Rick is smarter, I bet he stays mostly on cue, and aims at Obama, and makes Mitt twist in the wind with his personal blasts…anyway that’s how I see it unfolding.

right2bright on February 8, 2012 at 3:39 PM

Why do you think a brokered convention will produce something better than Romney? We’d end up with Christie or Pawlenty. We swap one liberal RINO governor for another. Given the idiocy of the RNC, maybe even Jeb Bush.

angryed on February 8, 2012 at 10:58 AM

Excellent point!

noeastern on February 8, 2012 at 3:39 PM

LOL….

Obama’s Carney just back slap Romney’s complaint at Obama’s Catholic health ruling by saying that Obama’s position is the exact position that Gov. Romney let happen in MA… LOL It’s the first vivid real life response that mimics the Newt Pac cartoon of Romney debating Obama… Can’t wait for the video… Now we suppose to shut up and vote for Romney…lol

Y314K on February 8, 2012 at 3:40 PM

I just had this image of sitting in an exam room waiting for the doctor. There’s a knock on the door and in enters Ron Paul. Scary. Maybe he’s a great physician I don’t know. But anyone who has uttered so much batshiat crazy stuff would make me run from the exam room.

Minnfidel on February 8, 2012 at 3:25 PM

What doctors do you know that knock on the door before entering ?

Are you sure you’re not imaging you’re somewhere else like an insane asylum ?

And what is is about what Paul has said, that drives you so crazy ?

balanced budgets ?

reduced government spending ?

I can’t define batshiat crazy, but I know one when I see one.
Minnfidel on February 8, 2012 at 3:25 PM

Figures.

DevilsPrinciple on February 8, 2012 at 3:40 PM

As a practicing doctor, I think Paul would have the edge over Romney on that.

cozmo on February 8, 2012 at 3:20 PM

Not sure about that, any more than I would say my mail man knows the best way to privatize the U.S. mail service, although I would give his opinion more credence than I would others. I would say that Paul’s experience as an Ob/Gyn gives him excellent insight into the abortion question, as when he stated that, in actuality, one rarely encounters a situation where an abortion is necessary to save the life of the mother. That is one of the big lies of the left.

Mr. Arkadin on February 8, 2012 at 3:43 PM

DevilsPrinciple on February 8, 2012 at 3:07 PM

Good luck, even the simplest of basic biz econ throws him for a loop, your post probably brought him to tears…

right2bright on February 8, 2012 at 3:44 PM

One thing about Rick, no one will ever say he is the smartest guy in the room

https://twitter.com/#!/hunterw/status/167132567122870272/photo/1

Last year he sends out a Hannukah Card with a version from a christian bible… Smart!!

georgealbert on February 8, 2012 at 3:44 PM

Conservatives still HATE Romney. Got it?

Citizen-003528 on February 8, 2012 at 11:01 AM

Halleluiah, can I get an amen!

noeastern on February 8, 2012 at 3:44 PM

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