On Tuesday, after outspending his opponent by 2-1, Mitt Romney managed to win his home state by four points. That's a win. But it's a win that makes Romney look weak, not strong.
One way to answer that is through polls. The latest Politico/George Washington University poll, for instance, finds, "Romney is bloodied after nine contests, five of which he has lost. Only 33 percent of independents view him favorably, compared with 51 percent who see him in an unfavorable light. In a head-to-head match-up against Obama among independents, Romney now trails 49 percent to 37 percent." Losing ground among independents suggests a real weakness in the general election. But it might be meaningless. Those independents might simply be reacting to the primary, and they'll come around when Romney transitions to his general-election campaign.
But that might not happen anytime soon. Another way of presenting the outcome in Michigan is that Santorum challenged Romney in his home state, got outspent by 2-1, and still only lost by four points. If Romney won in a way that made him look weak, Santorum lost in a way that made him look strong. It's not the sort of a result that leads an overperforming longshot to drop out of the race.
At the same time, Romney was right in his victory speech. “We didn’t win by a lot, but we won by enough and that’s all that counts,” he said. His advisers might have preferred if he'd omitted that unusually honest look into the dynamics of the campaign. But Romney did win by enough. He remains the frontrunner. He remains strong enough to dissuade any new entrants. Which means the status quo continues. Romney vs. Santorum. The Republican Party will continue to have nowhere else to turn and independent voters will continue to see a side of Romney they don't much like. You can argue that Michigan produced three kinds of winners last night. Romney, who didn't lose. Santorum, who almost won. And the Obama campaign, which gets to sit back and watch this primary go on for that much longer.
1) Mitt Romney scored wins in Michigan and Arizona, reports Dan Balz: "February was supposed to be Mitt Romney’s month, a time when he could put distance between himself and his rivals for the Republican nomination with a series of contests on generally friendly terrain. Instead it turned into a grinding endurance test far more difficult than anything he or his campaign had imagined. But on Tuesday night, the former Massachusetts governor did what he had to do. He easily won the state of Arizona -- and all its delegates -- in a campaign that was not seriously contested by his rivals. And in the big prize of Michigan, he also won -- as he desperately had to do. If he did not overcome some of the doubts about his candidacy, he reestablished himself as the favorite to win the nomination...Tuesday’s results prevented what could have been a calamitous day for Romney. Instead the two primaries provided a tonic for a campaign and a candidate that have been the target of criticism for weeks."
2) His wins were driven by economic concerns, reports Peter Nicholas: "For all the attention paid to social issues in the run-up to two state primaries Tuesday night, voters in Michigan and Arizona identified the economy as their overriding concern--a preference that turned out to benefit Republican presidential candidate Mitt Romney, who won both contests. Surveys of voters as they left polling places in those two states ranked the economy as the most important issue in the race, far above abortion and immigration. Mr. Romney has staked his campaign on his business acumen and promise to revive the troubled economy. Some social conservative have been suspicious of him because of his previous support for abortion rights...Exit polls showed that 54% of Michigan voters judged the economy the most important issue in the race. Of those, 45% chose Mr. Romney, compared with 29% for Mr. Santorum. Far down the list of issues important to voters was abortion. Only 14% considered abortion to be the overriding issue."
@jamespoulos: COMEBACK KID? #mittisthegopclinton
Mitt Romney's full speech: http://wapo.st/x4UCb5
Rick Santorum's full speech: http://wapo.st/zcq1Es
Checking Romney's budget math: http://wapo.st/xsEazb
3) BAD NEWS -- Housing prices are at their lowest level since 2002, reports Michael Fletcher: "The nation’s home prices have fallen to their lowest level since 2002, according to a private report, casting a troubling shadow over what has otherwise been a brightening economic recovery. Although analysts have been nervously eyeing rising oil prices and Europe’s struggling economy, Tuesday’s S&P/Case-Shiller index of property values report offered a sobering reminder that the still-shaky housing market remains one of the most potent threats to a robust recovery...The continued trouble in the housing market has proved to be among the most vexing problems in the economic downturn. Even as the stock market has reached a four-year high, the unemployment rate has declined sharply and consumer confidence has perked up, housing remains problematic, putting a damper on economic growth."
@ryanavent: You know, if I had access to incredibly cheap funding, I'd start thinking about originating some prime mortgages.
4) GOOD NEWS -- Consumer confidence is climbing towards pre-recession levels, reports Timothy Homan: "Consumer-confidence measures are climbing out of the depths reached during the last recession as employers step up hiring and stocks rally, signaling Americans may be poised to increase spending. The Conference Board’s gauge in February increased to the highest level in a year, figures from the New York-based research group showed today. The Bloomberg Consumer Comfort Index rose to an almost four-year high in the week through Feb. 19, and the Thomson Reuters/University of Michigan measure of consumer sentiment increased to 75.3 in February, the sixth straight monthly gain and the longest advance since 1997. The last time the University of Michigan index stayed above 75 for more than two months was in the period through January 2008, a month after the end of the previous expansion."
5) NEWS THAT DOESN'T REALLY MATTER -- The Dow closed above 13,000 for the first time in over three years, reports E.S. Browning: "After bouncing up and down around the 13000 level for a week, the Dow Jones Industrial Average finally closed above that psychologically important mark for the first time since May 2008. As last summer's fears of a U.S. recession and a European debt collapse have gradually waned, the Dow has staged a 22% rebound since early October, and its 6.4% gain for 2012 marks the strongest beginning to a year since 1998. As last summer's fears of a U.S. recession and a European debt collapse have gradually waned, the Dow has staged a 22% rebound since early October, and its 6.4% gain for 2012 marks the strongest beginning to a year since 1998. With stocks up so far in such a short time, money managers find themselves torn between concerns the market is overdue for some kind of pullback and fears the market's strength could leave them regretting any decision to get out now."
@BCAppelbaum: The Dow finally closed above 13,000 and all I feel is... empty.
@ObsoleteDogma: One day people will tell their grandkids where they were when the DOW hit 13,000 again.
1) Romney won Michigan -- but not the middle class, writes Jonathan Cohn: "Did Mitt Romney win the Michigan primary? Or did he merely survive it? That really depends on your perspective. As recently as a few days ago, Romney was trailing in the polls. And as recently as Tuesday afternoon, Romney staffers were talking down expectations. But Romney won a clean victory on Tuesday night. He won handily in the Detroit metro area, his home turf, but he also ran strong in more contested counties, like Livingston and Jackson, to the west...Romney succeeded, but the exit polls suggested a familiar class divide. Romney won among voters with a college degree and those making more than $100,000 a year. But he lost (barely) among voters without a college degree and he lost (more substantially) among voters making between $30,000 and $100,000 a year."
2) The primary is hurting the GOP, writes David Weigel: "At a glance, the 2012 Republican primary looks a lot like the 2008 Democratic race. But that campaign pitted a well-liked candidate who would be the first African-American president against a well-like candidate who would have been the first female president. Neither ran a particularly negative campaign. Go and check out the most brutal ad that Obama aired against Hillary. He criticized her because the New York Times, 'her hometown paper,' said she was 'taking the low road.' That was it. With precious little ideological or policy space between them, the candidates waged war over whether the Democrats should nominates a figure of hope or a pragmatist. Now, look back at Romney-Santorum. When Santorum brags about his audacity, he’s copying every insurgent who’s ever put his name on the ballot. But Santorum actually means it. He no longer picks culture war fights, the way he did when he lost his Senate seat. He picks contrast fights, over everything."
3) Olympia Snowe is right about American politics, writes Ezra Klein: “'[W]hat I have had to consider is how productive an additional term would be,' Snowe said in a statement. 'Unfortunately, I do not realistically expect the partisanship of recent years in the Senate to change over the short term.' She’s right. The partisanship of recent years is not likely to change over the short term. In fact, it’s likely to get worse. Snowe will probably be replaced by a liberal Democrat. Nelson will probably hand his seat to a conservative Republican. The parties will become that much more unified, disciplined and polarized. And that’s okay. Or, at least, it would be okay if America’s political institutions were prepared for it."
4) The stimulus was the right choice, writes Eduardo Porter: "In the last three months of 2008 the economy had contracted at an annual rate of 8.9 percent, the sharpest decline in more than half a century. It shrank at a 6.9 percent rate the next quarter. By February 2009 the country had lost more than five million jobs. We know what President Obama did. In February, he pushed Congress to pass the American Recovery and Reinvestment Act, an $831 billion fiscal stimulus package aimed at creating demand for goods and services to reignite growth and stop the downward spiral...'These policies have made our economic woes worse,' the House speaker, John Boehner, wrote earlier this month on the third anniversary of the bill’s enactment. They 'left millions of Americans out of work and made the future of job-crushing debt even more daunting for our children and grandchildren.'...The Boehner attack suggests a question: Were there other plausible choices? And would they have fixed the economy sooner?""
5) Austerity won't work for Europe, writes Jean-Paul Fitoussi: "Tway the Greeks and their government have been treated tells us a great deal about the way Europe is structured and the dangers that beset it. The technocratic leaders of Greece have lost the confidence of the people, who are rioting because the conditions attached to help from the rest of Europe are so stringent that Greece would be better off in the future without such 'assistance.' Yet this is not the first time the world has seen such zeal in the name of financial rescue. During the 1997-98 financial crisis, bailouts from the International Monetary Fund left Asian countries with no choice but the strictest of austerity measures and free-market reforms...The governments of the euro zone are following the same path pursued by the Asian countries -- austerity and competitiveness -- but don’t have the same chances for success. One or even several small countries can build up reserves without exposing themselves to retaliatory measures from the rest of the world. But Europe cannot do so as a whole."
6) U.S. health care policy is regressive, writes Holman Jenkins, Jr.: "ObamaCare is a specific instance of a broader truth about America's health-care policy: It's grossly regressive. The giant tax subsidy for employer-provided health insurance is most rewarding to those in the highest brackets. Medicare is regressive: It transfers money from working people, with few assets, to the elderly, who own most of America's wealth. Even Medicaid, the program for the poor, is morphing into a program for helping the middle class shield its assets from long-term care bills. The cumulative impact of these interventions has given us the health-care system we have. Because it subsidizes third-party payership, it destroys any hope of price-value comparisons by consumers. Because it commits the cardinal economic impossibility of trying to subsidize everybody, the end result is not better health but higher costs in the form of rising prices and the provision of services of questionable value."
Folk interlude: Bowerbirds play "In Our Talons" live on WKNC.
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Still to come: The ECB gets back into the lending game; the Senate will soon face off on contraceptives; a crackdown on insider trading is coming; loan troubles doom an electric car company; and exceptional photos from the archives of the New York Times.
House Republicans unveiled a jobs package, report Ed O'Keefe and Paul Kane: "Eager to refocus attention on the economy and job creation, House Republicans on Tuesday reintroduced a series of proposals to help small businesses that had previously drawn broad bipartisan support. The JOBS Act is not new legislation but is instead a grab bag of items that have already passed at the committee level or on the House floor by wide bipartisan votes. The package, introduced by House Majority Leader Eric Cantor (R-Va.), would tweak or update various Securities and Exchange Commission regulations that in some cases haven’t been updated since the 1960s. Republicans believe the changes would make it easier for small businesses to launch initial public offerings and solicit new investors...For the past few months, Boehner has carried in his coat pocket a list of the several dozen bills that, he says, would create jobs but have died in the Senate after winning House approval."
Ireland will hold a referendum on Europe's fiscal treaty, report Jamie Smyth and Peter Spiegel: "Dublin will hold a referendum on the eurozone fiscal pact, plunging Europe into months of uncertainty and potentially placing a question mark over Ireland’s membership of the euro. Enda Kenny, Ireland’s prime minister, said Dublin’s head legal official had advised that 'on balance' the Irish constitution required the treaty to be put to a vote. It is likely to take at least three months to organise a referendum...News of the Irish referendum sparked a sharp sell-off in the euro, which fell to a daily low against the dollar before rebounding as investors absorbed the low probability that the move would derail Europe’s fiscal treaty. The single currency later came close to three-month highs as the European Central Bank embarked on a fresh round of lending to Europe’s banks."
Banks posted their biggest increase in lending in four years, reports Victoria McGrane: "U.S. banks posted their biggest quarterly increase in lending in four years, offering reason for optimism that the economic rebound is picking up steam. The lending expansion--detailed in the industry's latest report card from a top regulator--is good news for the U.S. economy at a time when the unemployment rate is 8.3% and investors remain anxious about the prospect of an economic downturn or market shock spurred by Europe's debt crisis. Increased credit availability stands to help U.S. businesses that have been looking to finance new growth. The lending pickup is a bright spot in a period of intense questioning about banks' earnings power. U.S. financial firms have been under pressure in the markets as weak economic growth, tighter regulation and a decline in trading and deal making crimp their earnings outlooks. "
Europe delayed talks on expanding its bailout fund, report Jack Ewing, Stephen Castle and Melissa Eddy: "Domestic politics in euro zone countries emerged again on Tuesday as a serious obstacle to resolving the European debt crisis, contributing to a decision by officials to postpone a crucial meeting they had planned for Friday. The setbacks illustrated again how hard it has been to reconcile impatient financial markets with democratic processes...At the meeting on Friday, European leaders planned to discuss building a stronger financial firewall to prevent debt problems in one country from spreading to others. The delay means a decision to increase the bailout fund is not likely to come until later in March. The meeting had been expected to take place after a summit meeting of all 27 European Union heads of government, which will still proceed."
The ECB is lending again, reports Howard Schneider: "Throughout his waning months in office, European Central Bank President Jean-Claude Trichet boasted that he had avoided the excesses of his counterparts at the U.S. Federal Reserve and kept the ECB’s response to his continent’s financial crisis relatively modest. It has taken his successor, Italian central banker Mario Draghi, less than three months to upend that approach, triggering a debate about whether the ECB has quietly solved the euro-zone debt crisis or simply postponed a reckoning by shuffling hundreds of billions of dollars among banks, governments and the central bank’s own coffers...The policy has stabilized European finances in recent weeks, contributing in a roundabout way to a decline in the exorbitant interest rates that some heavily indebted governments had to pay. After the first round of ECB loans, banks spent some of the money on government bonds, and Italy and Spain as a result saw a drop in the cost they had to pay to attract bond investors."
The 'Volcker Rule' is drawing flak from local governments, report Zachary Goldfarb and Howard Schneider: "A new federal rule aimed at limiting risky behavior by banks is prompting protests from local and foreign governments alike, which warn it could make it harder for them to borrow money for public projects and operations. State and local officials say the new regulation, known as the Volcker Rule, could make it more expensive for them to raise money from investors to pay, for instance, for environmental cleanup and housing assistance. In the Washington area, the rule could affect borrowing costs for agencies, such as the authorities that operate the Walter E. Washington Convention Center and Dulles International and Reagan National airports, according to the District’s chief financial officer...Municipalities and foreign governments alike are complaining that the rule would significantly curtail the purchase of their bonds by banks, increasing the interest rates that bond issuers may have to pay to attract investors."
The Obama administration is pushing efforts to aid disabled workers, reports Melanie Trottman: "Employers and business groups are trying to stop an Obama administration effort that calls for federal contractors to hire a minimum number of disabled workers and could penalize those who don't by revoking their contracts. The proposal could reshape hiring at roughly 200,000 companies that generate $700 billion a year in contracts with the federal government. They include defense contractor Lockheed Martin Corp., aircraft maker Boeing Co. and firms across the health-care, construction and information-technology industries. Under the Labor Department plan, most firms that contract or subcontract with the federal government would be asked to have disabled people make up 7% of their work force. While the department says it wouldn't be an explicit requirement, companies that don't hit the target could have their contracts canceled or could be barred from winning future contracts until they show they are trying to meet the target."
Time lapse interlude: Rio de Janeiro during Carnival.
The Senate is headed towards a clash over contraceptives, reports Robert Pear: "The Senate on Tuesday headed toward a showdown over President Obama’s policy requiring health insurance coverage of contraceptives for women, even as Republicans appeared to be divided over the wisdom of pressing for a vote any time soon. Senate Republican leaders sought an immediate vote on legislation to overturn the president’s policy and allow a broad exemption for certain insurers and employers that have religious or moral objections to such coverage...The proposal, offered by Senator Roy Blunt, Republican of Missouri, as an amendment to a highway bill, says that health insurance plans and employers may refuse to provide or pay for coverage of 'specific items or services' if the coverage would be 'contrary to the religious beliefs or moral convictions of the sponsor, issuer or other entity offering the plan.'"
Virginia passed its controversial ultrasound bill, report Erik Eckholm and Kim Severson: "Changing course after an unwelcome national uproar, the Virginia Senate adopted a revised bill on Tuesday that still requires doctors to perform an ultrasound on women before they have an abortion, but also says that women cannot be forced to have an invasive vaginal ultrasound. Gov. Bob McDonnell demanded the revisions last week, and their acceptance on Tuesday all but assured the state’s adoption of the ultrasound requirement. The original bill set off protests from women’s groups and others. Some critics called it 'state rape,' and the plan was mocked on television comedy shows...On Tuesday the bill narrowly passed, 21 to 19, with further amendments that will require it to go back to the House for final approval. The Senate vote came after a bitter debate in which Democrats pleaded with the body not to adopt a bill that they said remained -- even with the changes -- demeaning to women and insulting to doctors."
A big crackdown on insider trading is coming, reports David Hilzenrath: "The federal crackdown on insider trading could result in big new cases in the coming months, according to a senior regulator. The Securities and Exchange Commission has 'sprawling' investigations underway in several regional offices, and those are expected to lead to enforcement actions over the next six to nine months, Sanjay Wadhwa, a top official in the agency’s New York office, said at a recent conference for securities lawyers...The SEC, the FBI and federal prosecutors over the past few years have charged a long string of hedge fund traders, corporate lawyers, boardroom insiders and others with trading on or trafficking in confidential information. The cases, some of which involved webs of tipsters and investors, have put the sharpest and most sustained focus on insider trading since Ivan Boesky was sent to prison a generation ago."
Many college students are being misassigned to remedial classes, reports Tamar Lewin: "Two new studies from the Community College Research Center at Columbia University’s Teachers College have found that community colleges unnecessarily place tens of thousands of entering students in remedial classes -- and that their placement decisions would be just as good if they relied on high school grade-point averages instead of standardized placement tests...Over all, less than a quarter of those who start in remedial classes go on to earn two-year degrees or transfer to four-year colleges...Remedial education practices vary widely. At some colleges, even if remedial courses are recommended, students can choose to register for college-level courses; at others, the courses are mandatory for those below the cut-off scores. With the Obama administration pushing to improve the nation’s dismal community college graduation rates, many states and community college systems are rethinking their approaches to remedial education."
Tumblr interlude: Photographs from the New York Times' archives.
A prominent electric car startup is shutting down, reports Carol Leonnig: "An Indiana electric vehicle company that had planned to build energy-efficient fleet trucks announced Tuesday it will close down this week, and it blamed the Obama administration for stringing the company along for three years with promises of a federal loan. Bright Automotive executives complained in a letter to Energy Secretary Steven Chu Tuesday that the agency has since 2010 vowed repeatedly that the company’s application was 'close' and 'within weeks' of winning a $450 million federal loan to launch its manufacturing plant for hybrid plug-in fleet trucks...'The actions - or better said 'lack of action' -- by your team means hundreds of great manufacturing and technical jobs, union and non-union alike, and thousands of indirect jobs in Indiana and Michigan will not see the light of day,' Bright CEO Reuben Munger wrote to Chu."
@drgrist: Is saving humanity from global catastrophe cost-effective?
Wonkbook is compiled and produced with help from Karl Singer and Michelle Williams.