Friday, August 03, 2012

The coming Romney implosion, and the power of leverage in campaigns

Not long ago, Rachel Maddow had Harvey Weinstein on her show. Rachel asked him why wealthy Hollywood types were not giving more to Obama's campaign, as compared to the Koch brothers on the right. Weinstein stated he and others of his ilk didn't believe panic was warranted, that as long as Obama was ahead in the polls there was nothing to worry about. If Obama were to fall behind, Harvey said they would contribute more to his coffers. Simple as that.

At the time when I first heard this, it all sounded a bit too disturbingly cavalier and dangerous. However, I do get it. What Harvey was conveying was not just confidence in Obama, but more so confidence in the belief that Romney is a greatly flawed and inferior candidate. Weinstein said to Rachel, "you can spend all the money in the world, if you’ve got a bad product, it doesn’t matter.” And here we are weeks later and Romney is proving Harvey right as Mitt was incapable of successfully pulling off a simple overseas trip, instead making gaffe after gaffe and appearing to be in way over his head.

By no means is Harvey a naive man. I have a feeling he's on to something, that he knows and has known some things about Romney that up till now has escaped most of us. I'm sure Harvey is a quick-read when it comes to judging a person, being able to do so effectively based on how a person acts while knowing very little about the person. It's something he has needed to do in Hollywood for many years, to rapidly assess and evaluate actors. He knows "it" when he sees it or hears it, and when it comes to Romney he has seen and heard not much to fear. And again, I believe in the last few weeks we've started to see what Harvey was likely referring to when speaking with Rachel. The gradual and eventual Romney implosion has begun.

I would also like to expand on Harvey's comment about all the money in the world is not going to help when you have a "bad product." This is a key point when you consider that Romney will likely have a significant edge over Obama when it comes to campaign funds. Such a large edge would be of major concern if both candidates were of equal caliber but as Harvey states, Romney's faults are so numerous and gaping that it helps to level the playing field, and then some.

We can look at it as a hedge fund would use leverage. Just for illustrative purposes, let's suppose Romney has $2 billion to spend versus Obama's more meager $1 billion. When it comes to leverage, the advantage goes to Obama as he clearly has fewer faults to be exploited than does Romney (he can't cite his years as MA governor given Romneycare, can't cite his years at Bain given outsourcing and destroyed jobs, can't cite his time at Olympics given recent debacle in UK, he refuses to release many years of tax filings, he has repeatedly lied, he has flip-flopped on too many issues to count -- you get the point). So let's assume that Obama has three times (3x) the leverage over Romney when it comes to being able to effectively exploit more flaws, thereby landing more blows that actually have impact and deliver when it comes to changing voter opinions. When you do the math, Obama's $1 billion ends up doing damage equivalent to $3 billion thanks to Romney's flaws, ultimately surpassing Mitt's $2 billion figure.

I think that is what Harvey was driving at.... It's all about the leverage.

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