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Conclusion: Former Speaker of the House Newt Gingrich has gone from a candidate on the margin to now mounting a serious challenge to Republican frontrunner Mitt Romney.

“How dare you enter the Grinch's lair!? The insolence! The audacity! The unmitigated gall! ”

-          The Grinch

It’s not clear yet whether Newt Gingrich is going to totally ruin Mitt Romney’s Christmas, but certainly he will put a damper on it.  Over the span of the last month, Gingrich has gone from totally out of the race for the Republican nomination to becoming frontrunner Romney’s primary challenger.   In fact, according to InTrade Gingrich is now at a 38% probability of gaining the nomination and Romney has tumbled down to 48%.  This spread is the tightest any competitor has been to Romney.

The Gingrich That Stole Christmas - 1. dj

The next few weeks will be critical for Gingrich to mount a serious challenge at the nomination.  Both Herman Cain and Rick Perry have completely melted away due to a combination of scandal (Cain) and poor debate performance (Perry).   This gives Gingrich the opportunity to compete head-to-head with Romney and should also enable him to gain substantially more media exposure than he has in prior months.

For both Cain and Perry, being elevated as the number one challenger to Romney accelerated the level of scrutiny that both the media and voters applied to evaluating their candidacies and, in short order, both imploded.  Gingrich, on the other hand, is a known entity that has been on the national political stage for decades.  This is both good and bad.  On the positive, there is limited risk that Gingrich has a spectacular implosion like Cain and Perry.  On the negative, it will be quite easy for the Romney’s team to develop a negative dossier on Gingrich.

To the last point, the Romney attacks on Gingrich have already started.  Yesterday, former Representative Guy Molinari, who officially endorsed Romney in early October, said the following:

“The thought that this man could be president of the United States is appalling.   This guy is evil.  He’s an evil person.” 

Obviously, some very strong words for a Republican to say about a fellow Republican who has a legitimate shot at the Presidency, especially given that the two were long time colleagues in the House of Representatives.

Aside from proxy attacks, like Molinari’s, the Romney camp has started framing up Gingrich as a career politician.   Yesterday, Romney said the following:

“Speaker Gingrich is a good man, he and I have very different backgrounds. He spent his last 30 or 40 years in Washington. I spent my career in the private sector, and I think that’s what the country needs right now.”

Obviously, given that he was elected to the House of Representative for ten consecutive terms, it will be difficult for Gingrich to defend against this line of attack.  As well, purportedly the Romney camp is going to further emphasize Romney’s wife of 42 years and large family as a counterpoint to Gingrich’s three divorces.  Once again, this line of attack is tough for Gingrich to combat.

Over the coming weeks, Gingrich will have to play catch up in a big way to Romney’s fundraising and organizational advantage. That said, the key advantage Gingrich has going into the primaries is his conservative background.  In fact, Gingrich has a lifetime American Conservative Union rating of 90%.  These conservative credentials will be critical in the primaries and Gingrich compares very favorably against the much more moderate Romney, a former Governor of Massachusetts.

The other advantage Gingrich has, which my colleague Keith McCullough noted after watching a number of the debates, is that he is both incredibly smart and has a very strong handle on the issues.  For much of this race, Romney’s competitive advantage has been that he is just plain more intelligent than the other key challengers in the race.  This is not so with Gingrich.  Below, we’ve posted a small clip from a recent debate, which highlights Gingrich’s ability to quickly think on his feet:

http://www.youtube.com/watch?v=igxgegOSniY

Clearly, Gingrich has momentum as evidence by a number of recent polls.  In fact, according the Real Clear politics aggregate, and as outlined in the chart below, Gingrich now leads the Republican race at 26.6% with Romney a distant second at 20.4%.  This is on the back of a Rasmussen poll that showed Gingrich up on Romney by a massive +21 points.

The Gingrich That Stole Christmas - 2. dj

At the state level, Gingrich is showing similar momentum.  The first three primaries are Iowa on January 3rd, New Hampshire on January 10th, South Carolina on January 21st, and Florida on January 31st.  Based on the most recent polls, Gingrich leads in all three of those States.  If Gingrich wins those early contests, it could very easily get him the momentum to raise the money he will need to enter into a war of attrition with Romney.

So, it seems very possible that Newt could well be the Gingrich that steals Mitt Romney’s Christmas.

Daryl G. Jones

Director of Research