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CEO Daily: Kasich plots a quiet comeback

Saturday Morning Post: The Weekly View from Washington

While the Mothra-vs-Godzilla deathmatch between Donald Trump and Ted Cruz ravages the landscape, more diminutive Republican candidacies are making quiet moves. Witness New Hampshire, where all of a sudden Ohio Gov. John Kasich is looking surprisingly vital. A handful of polls in the state show him edging into second or third place behind Trump and, maybe, Florida Sen. Marco Rubio. Kasich’s been an afterthought in the national sweepstakes, but the Granite State rewards the kind of committed retail campaign he’s waged there — and its voters tend to appreciate his gruff but moderate approach to governance. Validation of his breakthrough came this week, when Right to Rise, the super PAC backing former Florida Gov. Jeb Bush, deemed him sufficiently threatening to merit an attack ad.

Trump maintains an intimidating lead in New Hampshire. The question is, if Kasich finishes a strong second, what then? Historically, the GOP primary there has served as a corrective for the kickoff caucuses in Iowa, where social conservatives have disproportionate sway. In the last six contested Republican presidential primaries, dating back to 1980, the two states haven’t picked the same candidate a single time. Over that period, only two Iowa winners went on to secure the nomination, while four New Hampshire victors clinched. The peculiarities of this election make New Hampshire potentially more consequential than ever. Kasich, while nosing forward, nevertheless remains within a few points of the contest’s three other establishment favorites: Bush, Rubio, and New Jersey Gov. Chris Christie. The party’s business-minded old guard would vastly prefer any one of them to Trump or Cruz. But it’s doubtful more than two of that bunch will emerge from New Hampshire with enough momentum to continue. (Kasich has said he’ll drop out afterward if he doesn’t perform well.) And the top finisher among them could slingshot into the next contest, in South Carolina, as the establishment’s Last Great Hope. Yet the Ohio governor so far lacks the resources and the ground game there to capitalize the way Rubio or Bush could.

Kasich’s resurgence in New Hampshire should remind panicked establishment types now trying to reconcile themselves either to Trump or Cruz that the race doesn’t end before it begins. But overcoming those two frontrunners will require the rest of the field to consolidate quickly. A second-place finish by Kasich in New Hampshire is as likely to complicate that task as advance it.

Tory Newmyer
@torynewmyer
tory_newmyer@fortune.com

Top News

• Wall Street donors unperturbed by Cruz, Trump

Wall Street Republicans have no special love for Trump or Cruz, the two presidential candidates currently leading the GOP field. Both have marshaled an anti-industry message as part of a populist appeal to base voters, and industry barons have been among the most generous sponsors of rival candidates’ campaigns and super PACs. But right-leaning financiers aren’t exactly freaking out about the possibility of Trump or Cruz securing the Republican nomination, now a real possibility. That may be because both candidates have so many personal ties to the industry. Cruz’s wife, for example, stepped down from a job at Goldman Sachs once the senator announced his candidacy. And he’s done his share of fundraising on Wall Street. The conclusion by finance types appears to be that both at least know how the business works and once in office would be friendlier than they now purport to be.  Bloomberg

A surprisingly profitable year for K Street

The last two years of a president’s term typically spell famine for Washington’s lobbying corps, as the outgoing administration turns to foreign policy and legacy burnishing rather than active engagement with Capitol Hill. But for K Street firms, 2015 proved a happy outlier. Most of the biggest shops reported gains, thanks to industry-rattling debates over tax and health care policy, environmental regulations and a major push for a historic trade deal. Congress also passed a multi-year highway bill that lifted a decades-old ban on oil exports; a major omnibus spending package; and a piece of entitlement reform aimed at Medicare reimbursement rates.  All that activity translated into respectable profits for the hired hands who mind corporate interests in policymaking.  Washington Post

Bernie Sanders explains how he plans to win

Polls show the Vermont senator pulling even with Hillary Clinton in Iowa and extending his lead over her in New Hampshire. And yet the conventional wisdom regarding the Democratic contest remains that it’s only a matter of time, and, maybe, money, before Clinton eventually pulls out the win. Sanders, naturally, sees it differently. And he thinks his improbably run can take him all the way to the White House. As evidence, he points to head-to-head polling match-ups that show him beating Trump and other Republican candidates by wider margins that Clinton would (no matter that such surveys are notoriously meaningless this early in a race). To get there, he plans on doing exactly what’s taken him this far, a campaign he expects will continue to excite enough Democrats to lift him to the nomination and then victory in November.  Fortune

• Glenn Beck hits the trail with Ted Cruz today

Trump may have won a news cycle or two this past week by pulling down an endorsement from Sarah Palin. But Cruz, his nearest rival for the Republican presidential nomination, can call on his own share of bold-faced conservative backers. Radio host and former Fox News personality Glenn Beck is set to hit the trail in Iowa with Cruz today — including a pair of appearances at events hosted by a super PAC backing the Texas senator. Beck’s been on board for Cruz since he launched, urging his supporters at the time to “fast and pray like you have never fasted and prayed ever before” for the candidate.  Fortune

Around the Water Cooler

• Soros says Trump and Cruz are doing the work of ISIS

It should come as no surprise that uber-liberal billionaire George Soros is no fan of either of the Republican frontrunners. But it’s hard to express a greater antipathy than by arguing the pair are enabling our most dastardly enemies. That’s just what Soros did in an interview from Davos. His logic is that by fear-mongering about the terrorist group, the two are helping ISIS achieve its aim of short-circuiting rational consideration of the threat they pose. Make of that what you will.  Fortune

• How Sanders and Trump explain the market downturn

Soros wasn’t the only one at Davos trashing Trump. The candidate apparently came in for a fair share of abuse from other business leaders at the conference. As did Bernie Sanders, the Democratic socialist now giving Hillary Clinton a stiff challenge for that party’s nod. Anthony Scaramucci, the head of hedge fund firm SkyBridge Capital, for example, called Sanders a “black swan” for the market, the sort of unlikely event associated with market plunges. As he noted, the market started dropping when Sanders’s poll numbers started rising. The same connection could be drawn between Trump’s initial rise over the summer and poor market performance around that time. Since both stir uncertainty, and neither seems to be going anywhere anytime soon, the presidential race could help extend the market’s already bumpy year. Fortune

• Mapping the partisan divide by time rather than space

We tend to think of the partisan split as a geographic matter — urban versus rural, red state versus blue state. But it may be more instructive to think of it as a temporal one. The makeup of the Republican electorate most closely resembles an American society now decades past when considered by race, religious affiliation and marital status. And the Democratic coalition, by contrast, appears to preview where the U.S. is headed. Those starkly different demographics perhaps unsurprisingly hold very different views of the burden posed by immigrants and the values of Islam, two debates animating the presidential election. And with the parties apparently poised to drift ever further apart as time marches on, the difficulty for elected leaders on either side of reaching consensus on those and other issues will only intensify.  National Journal