Iowa Awaits Palin Decision as Farm Economy Beats U.S.

Former Alaska Governor Sarah Palin
Sarah Palin, former governor of Alaska and 2008 vice-presidential candidate. Photographer: Patrick Semansky/Bloomberg

The Iowa caucuses have long drawn criticism for taking place in a state too rural, old and white to winnow U.S. presidential aspirants.

The contest tentatively set a year from now -- Feb. 6, 2012 -- will present another anomaly for President Barack Obama’s would-be Republican rivals: less economic distress in Iowa than in the nation as a whole.

Buoyed by rising farm commodity and land prices, Iowa had an unemployment rate in December of 6.3 percent, well below the national rate of 9 percent in January. That will shape the candidates’ sales pitches, potentially putting more emphasis on the federal deficit than sluggish job growth that has dominated the national debate for two years.

“There is a great apprehension about the federal debt,” newly elected Governor Terry Branstad, 64, said in an interview at his capitol office in Des Moines, Iowa. “It was the premier issue in 2010. Will it be in 2012? I think so.”

Among the four states scheduled to start the Republican nominating season, only New Hampshire has a lower unemployment rate, at 5.5 percent. Republicans are likely to confront greater economic anxiety in South Carolina and Nevada, where the December rates were 10.7 percent and 14.5 percent.

Iowa’s relatively robust economy can be traced in part to corn and soybean prices at levels not seen in more than two years. Iowa is the biggest U.S. producer of the two commodities.

Farm Country Strong

“Agriculture is phenomenally strong,” Branstad said. “This can’t last, I’m sure, but agriculture is still a very important part of the Iowa economy.”

Climbing agriculture prices helped push farmland values in Iowa up 16 percent in 2010, an Iowa State University survey showed in December. The value of Iowa farmland is 93 percent higher than it was in 2004, according to the report.

Farmland is selling for as much as $8,500 an acre, said Neil Harl, an agricultural economist at Iowa State University in Ames.

“It’s just been an incredible run-up,” he said in a telephone interview.

This isn’t all that sets Iowa, traditionally an early judge of presidential candidates, apart from the nation. Iowa’s population is 90 percent non-Hispanic White, compared with 65 percent nationwide, according to 2009 U.S. Census Bureau estimates. Almost 15 percent of the state’s population is 65 or older, while nationally it’s 12.9 percent.

Slow Start

Campaigning for the caucuses is getting off to a slower start this election cycle, as candidates seek to save money and await a better indication of whether Sarah Palin will run.

Palin, 46, the 2008 Republican vice presidential nominee and a former Alaska governor, has hinted at a possible bid.

“You kind of get mixed signals,” Branstad said. “She kind of marches to her own drummer, so I don’t have a good read on it.”

Even if Palin enters the race, Branstad predicts a “wide-open” contest. He doesn’t plan to endorse any candidate early on, he said, although he is “reserving the right” to do so later in the process closer to the caucuses.

“I don’t think we have anybody I would necessarily consider a frontrunner,” he said. “I suppose you’d have to say Huckabee, but I’m not sure he’s going to run.”

Former Arkansas Governor Mike Huckabee won Iowa’s Republican caucuses in 2008, before dropping out of the nomination fight in March of that year. He has said he won’t make a decision on the 2012 race for several months and, like Palin, must also weigh whether he is willing to lose income from a Fox News Channel contract. Both Huckabee and Palin play starring roles on the cable television network.

No Formal Declarations

No candidates have formally declared for 2012. Four years ago, 17 Republican and Democratic candidates seeking the White House had signaled their candidacies or set up exploratory committees by the end of January 2007, including Obama and then-Senator Hillary Clinton of New York.

“There’s no question that things are starting at a slower pace than four years ago,” Matt Strawn, chairman of the state’s Republican Party, said in an interview.

Strawn attributes the slower pace to a variety of factors, including the “fluidity of the field” and the potential entry of candidates like Huckabee and former Massachusetts Governor Mitt Romney who don’t need to work as hard at introducing themselves because they campaigned in the state four years ago.

Another unanswered question is how big a role the Tea Party movement, which helped Republicans gain 63 seats in the U.S. House in November’s election, will play.

Unwritten Story

“I think that’s a story yet to be written,” Strawn said. “There is no question that there are newly engaged activists in the state.”

Strawn cautioned Palin against waiting too long to decide or campaigning in Iowa for only a few months.

“Iowa caucus-goers expect to see candidates here early and often, and they expect the chance to interact with them,” he said.

Palin was last in Iowa on Nov. 27 for a stop on her latest book tour. Before that, she visited in September, when she gave the keynote address at the Iowa Republican Party’s largest annual fundraiser.

Other potential candidates making regular visits to Iowa to gauge support include former Minnesota Governor Tim Pawlenty and former House Speaker Newt Gingrich of Georgia.

Additional Republicans who have given signals that they’re considering bids include Governor Mitch Daniels of Indiana, Mississippi Governor Haley Barbour, Senator John Thune of South Dakota and former Utah Governor Jon Huntsman, who has told the White House he plans to step down from his post as ambassador to China in the next few months.

Unemployment Biggest Concern

The federal deficit ranked second to unemployment as the most commonly picked issue of importance among six presented in a Bloomberg National Poll of likely voters conducted Oct. 7-10.

Pawlenty stressed the deficit in a Jan. 30 speech to a Waukee Area Chamber of Commerce banquet in suburban Des Moines attended by about 200 people.

“We can’t spend more than we take in,” he said, drawing laughter and applause as he paused between each word for emphasis. “It is not that hard.”

The lack of a clear Republican frontrunner has encouraged lesser-known politicians, including Tea Party favorite U.S. Representative Michele Bachmann of Minnesota, to position themselves for potential runs. Palin and Bachmann could hurt each other if they both enter the race, Branstad said.

“One or the other could do really well,” he said. “But if they’re both here, they kind of draw from the same well.”



Before it's here, it's on the Bloomberg Terminal. LEARN MORE