Romney: Right Where He Wants To Be

The presidential campaign will enter its final, decisive phase at about 6:30 p.m. Eastern time today, when delegates to the Republican National Convention finish casting the ballots that will make Mitt Romney their party’s nominee.

The outcome of Romney’s race against President Barack Obama is very much in doubt, but this much is certain: Romney has got to be happier than Obama with where things stand today. Though they have comparable tactical positions on the political battlefield, Romney holds most of the strategic advantages.

National polls that show the two men running neck-and-neck are irrelevant. We don’t pick presidents based on a national popular vote. It is not that difficult for a candidate to win the White House while drawing fewer votes than his opponent, as George W. Bush illustrated a dozen years ago.

Presidential re-election campaigns are referenda on the incumbent’s performance and popularity. Presidents who win re-election typically hold consistent and substantial leads over their opponents. Walter Mondale (1984) and Bob Dole (1996) never came within hailing distance of Presidents Ronald Reagan and Bill Clinton, respectively. John Kerry (2004) did a little better against Bush 43, but not much.

Despite overwhelming support from young voters, Hispanics and African-Americans – three groups with notably sub-par track records in actually turning out to vote – Obama has had to tread water to keep his overall favorability ratings near 50 percent. Romney’s core supporters are older white men, most of whom would cheerfully line up today to vote for him over Obama. The president, who benefited from a big “enthusiasm gap” in 2008, is likely to be on the wrong side of that metric this time.

The two crucial strategic elements in this campaign, however, are money and geography. Romney has clear advantages in both.

Let’s consider money first. Romney and the Republican National Committee entered August with a 50 percent lead over Obama and the Democrats in cash on hand, as the Republicans held around $180 million to the opposition’s $120 million. Moreover, the Romney campaign husbanded its cash (partly because of rules that limited spending prior to tonight’s nominating vote), while recently Obama and his party have spent more money than they have raised. Romney also out-raised Obama in May, June and July, a trend that probably continued in August.

The news is not entirely bad for the president. He amassed a huge bankroll in 2011 and early 2012, and he did not need to spend any of it in a primary campaign. So while much of the Romney campaign money is held by his party, Obama’s campaign managers actually controlled a bigger cash balance this month than Romney’s team did. Money held in each campaign’s treasury can be deployed at a moment’s notice to launch an attack or respond to one, or to bolster a get-out-the-vote effort.

But Obama may not get the chance to use this advantage, because he is going to be the target of a remarkable barrage of negative advertising from the GOP and its sympathetic super PACs. If the Republican side plays its cards right, Obama is likely to spend most of the rest of the campaign on defense.

This is where Electoral College geography becomes important.

The forthcoming deluge of negative advertising will not be aimed at convincing Obama backers to support Romney. Its real goal will be to reduce the already flagging enthusiasm on the Democratic side, so that more voters simply fail to show up at the polls. Both sides will rely on this tactic, but as we go into the campaign’s final weeks, Romney’s camp has a lot more financial ammunition. It may be decisive.

First, Romney has to win Florida. He has no realistic chance without the Sunshine State’s 29 electoral votes. It is not a sure thing, but despite Florida’s status as a battleground, Romney is likely to carry the state, which has a small but clear Republican tilt. Obama’s best hope in Florida is to rally the Hispanic vote, generate big African-American turnout and at least fight Romney to a draw with the elderly and Jewish blocs. But Hispanic and African-American voters do not typically vote at high rates, and Obama’s problems with pro-Israel Jewish voters may negate any traction he might gain by making Medicare an issue for the elderly.

Assuming Romney wins Florida, Ohio becomes the make-or-break state. Here, the two candidates were about even this week. Obama’s strength with labor and auto industry workers will give him an advantage – if Democratic voters reliably go to the polls. But the negative advertising barrage will focus on minimizing that pro-Obama turnout, while Romney can use his ample campaign cash to counter some of Obama’s offsetting attacks.

If Obama could simply concentrate on Ohio, he probably would win the election. But he can’t. He is in a dogfight with Romney in Michigan, a state that Democrats usually keep in their back pocket. Recent elections have demonstrated that Democrats were already in trouble in Wisconsin, and that was before Romney selected that state’s Rep. Paul Ryan as his running mate.

Potentially even worse for the president is the fact his lead in Pennsylvania is not secure. This is a state Democrats have not lost since 1988. Though recent polls give Obama roughly an 8-percentage-point margin over Romney in Pennsylvania, the share of voters favoring the president is still below 50 percent. If Republicans focus some of their anti-Obama firepower on Pennsylvania, the president’s side will have no choice but to respond. This will drain resources that the president would much rather spend in closer states, like Ohio, Florida and Virginia. His improved prospects in Wisconsin mean Virginia is not longer a must-win for Romney, but his path to the White House will be much smoother if he carries Virginia.

A strong Republican drive in Pennsylvania would also spill over to New Jersey, the southern half of which lies within the Philadelphia media market. New Jersey is a state the Democrats are almost, but not quite, sure to win. Don’t be surprised to see Republicans run quite a few anti-Obama ads on New York broadcast outlets. Those ads will not be directed at New York voters; instead, they will target New Jerseyans in the northern half of the state, across the Hudson River from Manhattan. The objective will be to force Obama and his allies to spend time and money defending parts of their Electoral College base, drawing resources away from the battleground states.

It is worth noting that all of these states – Wisconsin, Ohio, Michigan, Pennsylvania, New Jersey, Florida and Virginia – have Republican governors. This is proof enough that a GOP candidate can win statewide in these places, and it is why the Obama team will have no choice but to respond to attacks from the better-financed Republican side. With his greater financial resources, Romney can expand the political battlefield and force Obama’s team to spread itself thin.

Obama’s main strategy has been to define Romney, and more recently Ryan, as extremist and unacceptable as alternatives to himself. This approach has blunted some of Romney’s appeal but has not boosted Obama’s own numbers this summer. Now, with the GOP spending guns unleashed against him, Obama will likely see the effects of his own negative advertising reversed.

Having failed to pre-define Romney out of contention, the president’s remaining options are to defend his own track record, to lay out a compelling vision for a second term, to cobble various targeted appeals to youths, minorities and the elderly into a winning coalition, or to just continue trying to define the Romney ticket as unacceptable.

We probably will see some combination of all these approaches. If Romney runs a bad campaign, the president might squeak through. But right now, it appears that the challenger has withstood the incumbent’s initial volley and has seized the political high ground.

It is not easy to unseat an incumbent president, yet an opponent who can see a clear path to victory on the day of his nomination has put himself in a very good position to win. So while Romney enjoys the climate-controlled chill of his party’s Florida convention, it is the president who is probably sweating.

• Become A Funded Futures Trader