Romney campaign a victim of the “sunk cost effect”—also: how Gov. Huckabee’s sudden ascendancy is an artifact of the Romney campaign’s misguided activities

December 11, 2007 in 2008, analysis, campaign finance, campaign management, election 2008, GOP, Iowa, media, mitt romney, polls, republicans, rhetoric, romney, strategy, stupidity, the dark soul of Mitt Romney, triumph of unreason
Tags: abject failure, angst, boneheads, dan balz, ennui, failure, idiots, Madden Doctrine, morons, planning to fail, ROI, sunk cost effect, team romney, wapo, Washington Post

“Mitt Romney’s pursuit of the Republican presidential nomination has followed a time-tested route with an unorthodox twist,” writes Dan Balz in a WaPo release titled Fighting Head Winds

His path reprises that of others who began their campaigns overshadowed by better-known opponents. The strategy is built on the belief that winning begets winning and that early victories produce inevitable, even unstoppable, momentum.This would be true if e.g. Romney had been a governor of Texas or California. The sad truth is that Romney’s path is without precedent.

What is unusual about Romney’s White House quest is that he is neither true dark horse nor formidable front-runner. He is neither the candidate poised to spring a surprise in Iowa or New Hampshire, nor the candidate judged by his fellow Republicans nationally as the top choice for the nomination — or even the second or third.

He has become burdened by a front-runner’s expectations without many of the traditional assets. Losses in any of the early states could significantly set back his hopes of winning — and that is what he faces in Iowa from a surging Mike Huckabee, a former governor of Arkansas …

… Some Republican strategists consider Romney’s campaign to be the most effective and skilled of any of the candidates. The man who built a fortune as a management consultant and venture capitalist and who turned around the scandal-ridden 2002 Winter Olympics has applied those skills to put himself into the thick of a race against better-known opponents such as Sen. John McCain of Arizona and former New York mayor Rudolph Giuliani.

Romney’s wake-up call to the rest of the party began Jan. 8, when he staged a national fundraising telethon in Boston that collected more than $6 million in pledges — a stunning accomplishment for someone who had served but one term as governor and had ended the previous year with a 5 percent approval rating in national polls.

He led the GOP field in fundraising in the first quarter of the year — and has shown since then both a capacity to continue raising money and a willingness to dig deep into his personal fortune. He stood out in the early debates — handsome and photogenic on stage and nimble enough to impress party activists who otherwise knew little about him.

And his team took an early gamble, putting Romney ads on television in Iowa and New Hampshire last spring — earlier than any candidate in history — and keeping them running through the year. The costly investment paid off: By summer, he topped polls in those states and forced his better-known opponents onto the defensive.

Yuh-huh. Only here’s the thing: the costly investment never paid off. If the costly investment had paid off Romney would not be in peril right now. And Romney has organized and funded the most spectacularly unsuccessful campaign in the history of the Republican primaries.

(1) Here is one problem with the claim that Romney’s “costly investment paid off”: competitive activity requires a competitor, and Romney was advertising all by himself for months and months. When you compete without a competitor you have no way to register performance, whether good or bad or whatever—i.e. your learning opportunities are null bordering on void. Regard: If you run alone you can run against your best time and try to surpass it. But if you have only ever run alone then “best time” has objective ground only as an index of your own development as a runner, nor do you have any objective ground against which to rate your “development.” Yet the Romney campaign—with no objective grounds whatsoever—incredibly, unbelievably, interpreted their rising numbers as progress, even as their marginal rate of return crashed and kept crashing! (This means that they were paying more and more for less and less.)

(2) Because (1) the Romney campaign—and Dan Balz—incorrectly interpreted their rising numbers in the early primary states as success, Team Romney optimized to exploit their non-success, i.e. they narrowed their focus to what activities seemed to return a yield at the expense of other activities or functions. In business research literature this is called the Icarus Effect (Miller 1993, if memory serves). Since what returned success for Team Romney reduced to spending lots and lots of money, Team Romney continued to do so, only harder, faster, and more recklessly. Elsewhere we referred to this as The Madden Doctrine, what some would call the “sunk cost effect … manifested in a greater tendency to continue an endeavor once an investment in money, effort, or time has been made.”

(3) Also: Losers learn—why everyone forgets this primary lesson of any goal-oriented, competitive activity is a mystery to us. The other campaigns observed Romney’s imprudent, borderline irrational antics and developed strategies and lines of argument to compensate—e.g. Mayor Giuliani, in a move worthy of Hannibal or Sun Tzu, simply wrote off Iowa completely to deny Romney the opportunity of an unequivocal victory, a low-cost but low-gain decision that earned Hizzoner lots of ridicule and abuse. But in the paradoxical logic of strategy, the worst possible route from ‘a’ to ‘b’ can be the most effective route. Hizzoner gained nothing, but he didn’t lose a lot either, and he denied Romney a decisive victory despite all the many millions that Romney squandered. Only now is it becoming clear to others the wisdom of Hizzoner’s tactical withdrawal.

(4) Distinct competencies deprecate with every passing moment—every mail room clerk with a BA in business or out-of-work freak with an online MBA knows this—it is a wonder to us that Team Romney doesn’t. Romney’s only distinct competency is his vast personal fortune which he can call upon at any time—otherwise Romney’s has considered it his task to render himself non-distinct by reversing himself on every policy position he has ever had and adopting a crude, caricatured, and unreconstructed conservative line, and by trying to pretend to be an Evangelical (Christ, apparently, is Romney’s personal savior, a formula unfamiliar to the Mormon confession). To negate Romney’s only distinct competency would only require that a high ROI campaign like Gov. Huckabee’s or Mayor Giuliani make an issue of Romney’s self-funding and exceedingly low ROI (as Gov. Huckabee delights in doing).

Note to Balz et al: To combine (1) through (4) returns defeat, disaster, and complete humiliation, not success. Try, Mr. Balz, to look beyond the motorcades, the sparkly-glossy campaign media products, the candidate’s insipid powerpoints, the entourage of hirelings, the sniveling court eunuchs in handsome suits who hover about the imperious person of Romney himself etc. What is Romney’s RETURN ON INVESTMENT (ROI) should be the decisive question.

Back to Balz:

Despite those successes, Romney’s candidacy has fought head winds from the start. Beyond the issue of his Mormon faith, he has been dogged by the charge that he is a flip-flopper who ran as a pro-choice moderate when he tried to unseat Sen. Edward M. Kennedy (D-Mass.) in 1994 and then became an ardent abortion opponent in his presidential campaign.

Well, duh. What idiot told Romney that this would be a winning strategy?

Back to Balz:

The challenge from Huckabee in Iowa has become an unexpected obstacle to Romney’s strategy. He could face equally vigorous opposition from Giuliani and McCain in New Hampshire. And when the Republican field moves South to states with a high numbers of evangelical Christians, the issue of his religion will face its ultimate test.

Yes. We predicted this outcome. Because Romney telegraphed his punches in the early primary states, and because Romney made a great noise about his strategy and “inevitability,” and because of the popular perception that Romney has failed to respect the rules of the game, Romney now faces a divided field united only in their bitter opposition to Romney.

Romney bravely—or unwittingly—faces the gathering storm, er, we mean swarm

Also: we would argue that Gov. Huckabee’s rise is an artifact of Romney’s frantic spending. Here is our argument.

(1) Consider the concept of the breakout population—say that whale stocks crash and orcas begin consuming sea otters—this is an actual example—what is the result?—kelp forests disappear as sea urchin populations, a prey species of the sea otter, explode—this is an example of a breakout population. Moral: to disturb a critical node—in this case, a keystone predator—can cause breakouts elsewhere in the network.

(2) Romney by virtue of his vast personal fortune has suppressed the activities of the top tier candidates, the keystone predators who regulate the system. So Gov. Huckabee despite—or almost because of—his second tier status and lack of funds or organization suddenly, and powerfully, breaks out, which is the best possible outcome for Mayor Giuliani and Sen. McCain, both of whom can now sit quietly by and allow Romney to destroy himself as he tries to dislodge Gov. Huckabee.

(3) Elsewhere we discussed how Romney’s activities have distorted perceptions of the primary race in the same sense that subsidies or bailouts undermine the efficiency of a market to return prices that are an index of value:

how Romney’s spending has distorted perceptions in Iowa and New Hampshire

Back to Balz:

Having bet on doing well in the early states, he will now live or die by the results … etc., etc.

Yes, we too used to agree that Romney would live or die according to the tests of Iowa and New Hampshire. But now we would argue otherwise. We predict that Romney will fight right up to, and on the floor of, a bitterly contested GOP convention. Romney has simply spent too much money—recall the “sunk cost effect“—besides: anything less than the GOP nomination would be too great a humiliation for him to bear. Besides: Romney honestly believes that he deserves the nomination and he is willing to defend his claim.

yours &c.
dr. g.d.

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Balz: “it is difficult to sum up exactly what [Romney’s] candidacy is based upon and exactly who [Romney] is”

October 23, 2007 in 2008, analysis, argument, campaign communications, campaign management, conservatism, election 2008, GOP, incompetence, media, mitt romney, republicans, rhetoric, romney, strategy, stupidity, the dark soul of Mitt Romney, triumph of unreason
Tags: big empty space, cipher, dan balz, formless void, ideological cross-dresser, shape-shifter, the trail, Washington Post

“I received a message this week from a conservative who has been following the Republican presidential race closely,” writes Dan Balz for Wapo’s The Trail in a post titled Romney Must Prove He’s the Genuine Article.

He offered a telling observation, which in paraphrase went as follows: the more he sees of Mitt Romney, the less he likes him.

Funny. We feel the same way.

I was particularly struck by that comment in part because of something Romney’s politically savvy media adviser, Alex Castellanos, said to me several months ago, the essence of which was: when you putt Mitt Romney on television, good things happen.

Both may be right in their observations — the first is obviously a statement of personal taste and not reflective of the population at large, while the second may be grounded in evidence that the former Massachusetts governor is able to change attitudes with a barrage of television ads. But it’s also possible that my correspondent may be on to something, in which case Romney could have a problem on his hands …

… since Labor Day, [Romney’s] debate performances have been uneven — neither dominating nor disastrous. Rather than standing out from the crowd, he has been just one of many voices on a crowded stage. In none of the past three debates has he been judged as well as he was when he was making his debut as a national candidate.

There is a point beyond which being polished looks merely slick, where preparation begins to sound canned and corny. Romney has had moments recently that seem to have crossed that invisible line.

Here’s just one. Last weekend, he spoke at the Family Research Council’s Values Voters summit. This was an audience of religious and social conservatives — many of whom may be hesitant to support Romney because he is a Mormon. One can argue whether anyone’s religion should be in any way disqualifying in a presidential campaign, but the Romney team knows this is an issue of some concern.

Rather than addressing the issue directly, Romney tried to use humor. “I imagine that one or two of you have heard I’m a Mormon,” he said. “I understand that some people think they couldn’t support someone of my faith. But I think that’s just because they’ve listened to Harry Reid.”

He was referring to the Senate Democratic leader, of course, who also is a Mormon. And while he drew some laughs from the audience, it was an inelegant attempt to raise and then dodge an issue that continues to dog his presidential aspirations.

That may be a small issue. What should concern the Romney team more is that, after millions of dollars of television and months and months of campaigning, the candidate has not been able to shake off the flip-flop label. It remains a staple of coverage of his campaign — unfairly according to his advisers — as well as part of the standard attack line now coming from his opponents.

Romney freely admits he has changed some of his views, particularly those on abortion. Many politicians have done the same. Still, there are doubts about his core convictions that his rivals are poised to exploit heading into Iowa and New Hampshire early next year.

In part Romney’s challenge is to articulate a bigger message than sweeps some of these issues to the side. He has had many messages throughout the year — competence, freshness, conservatism, a three-legged stool. Lately, because of the jumbled nature of the Republican race, he has been focused on persuading Republicans he is the true conservative.

But it is difficult to sum up exactly what his candidacy is based upon and exactly who he is. That’s not the case for Giuliani … etc., etc.

The emphases are ours, all ours.

A consensus is emerging, dear readers: no one knows who Romney really is. Here is but a small sample of the emerging WHO ON EARTH IS ROMNEY, AND WHY DOES THIS SHAPE-SHIFTING NON-ENTITY WANT TO BE OUR PRESIDENT literature:

• Boyd on Romney: “I have no idea how we are supposed to figure out what [Romney truly believes] based on the available information about [Romney]”—how Romney’s ideological cross-dressing, and his flat refusal to address it, baffles voters and analysts alike
• Liza: Romney is a passionate advocate of each new stance he takes
• Ruffini: “Romney has done to himself what the Bush campaign did to John Kerry”

Of course, we’ve been harping on this string for months, because it’s a question we’ve been asking for months. Hence the name of our web log: Who is Willard Milton Romney?—are we any closer to an answer? Well, sadly, no.

We can hardly wait for Ms. Ann Marie Curling to rebut Balz the way she did Ruffini!—see:

Curling’s “rebuttle” to Ruffini’s “Where’s Romney’s Bio” further details and demonstrates the problems of the ailing Romney campaign

yours &c.
dr. g.d.