Aug. 29 (Bloomberg) -- Iowa started the 2012 presidential campaign with its caucuses in January, and the state may well be one that decides how it ends in November.
The quintessential farm state is regularly criticized as too rural, too old and too white to be a fair early winnowing ground. It may be equally out of step in the race’s final months, with unemployment at 5.3 percent in July, a third lower than nationally. Iowa is prospering from strong farm prices, though a drought threatens the size and profitability of the harvest.
The state’s six electoral votes are a tantalizing prize for both parties because it’s a politically flexible place. In 2008, Iowa gave Barack Obama a 10 percentage-point victory. Two years later, it put Republican Terry Branstad in the governor’s mansion.
“Iowa is represented by both Charles Grassley and Tom Harkin, icons for both ends of the ideological spectrum,” said J. Ann Selzer, president of the West Des Moines polling firm Selzer & Co., referring to the state’s U.S. senators. “What they have in common, however, is a commitment to practicality.”
The determining issues in November will be the ones that got Branstad elected in 2010, the state’s chief executive says.
“It was the debt issue and jobs,” Branstad said in an interview. His fellow Republican Mitt Romney emphasized budget cutting during his general-election campaign stops in Iowa.
Sue Dvorsky, the state Democratic Party chairman, said in an interview that “the job picture in Iowa is much better than the national picture.” That makes it tough for Branstad to nail the central Republican message, she said. “Mitt Romney wants him to talk about how the economy is in the tank, and it just isn’t here.”
Both presidential candidates have long been familiar to Iowans. Romney campaigned there in the 2008 and 2012 caucuses, almost winning this year. Four years ago, the Democratic caucuses gave Obama the first victory on his path to the White House.
Although independent voters outnumber Republicans and Democrats, there is a strong two-party system in Iowa. The early attention attracted by the caucuses helps the state parties raise money every four years.
Iowa’s generally greater prosperity doesn’t eliminate economic uncertainty and political unpredictability. The drought threatens to hurt Iowa farm income. That could have an effect on confidence and sway voters “at the margins,” favoring Romney, the governor said.
As further reason for Republican optimism, party officials say they scored a jump in voter registration since 2008. Unlike other battleground states such as Nevada, Colorado and Virginia, Iowa doesn’t have a high proportion of younger or Hispanic voters, who tend to favor Obama.
The Democrats counter that they are building a “remarkable field organization” that will prove superior to a “very splintered Republican effort,” according to Dvorsky, the state chairman. Romney is “struggling to find relevancy” in Iowa, she says.
Increasing demand from China, the second-largest buyer of U.S. farm goods, has bolstered commodity prices in recent years. Obama and Romney have both talked about toughening the U.S. trade posture with China, although Romney has offered more heated rhetoric. The Republican pledges to cite China as a currency manipulator on his first day in office, which could further complicate relations.
“Bashing China doesn’t play very well in Iowa at all because it is an export-oriented state,” said Steffen Schmidt, a professor of political science at Iowa State University. “Iowans are practical, and they know you can’t necessarily choose your trading partners.”
Romney’s rhetoric is “one thing that I want to caution him about,” Branstad said, though he said “both sides” have sometimes overly criticized China.
“Iowans do understand the importance of breaking down barriers and increasing international trade,” the governor said. “China purchases more of our soybeans than every other nation in the world combined, and they are now purchasing a significant amount of corn and pork as well.”
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