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Ohio is the real test for Romney, Santorum and the GOP

Michigan may have been a "must win" state for Republican presidential hopeful Mitt Romney but Ohio will be his real test. The state’s demographics are tougher vis-à-vis challenger Rick Santorum, while its economic concerns more directly mirror what the Republican Party's nominee will face in the general election campaign.

Compared to Wolverines, Buckeyes are less affluent, less educated, more rural, and have more evangelical Christians in their ranks—all these favor Santorum’s Holy Spirit is on my shoulder campaign. 

In Michigan Romney’s economic message trumped all. Exit polls from Tuesday night's vote indicated that the economy was the number one concern among voters, and enough Christian conservatives abandoned Santorum to vote their pocketbook. This permitted the more moderate candidate on social issues and more substantive candidate on economic matters to win.

It was not just Romney’s native state advantage, but the combination of the former Massachusetts' governor's superior organization and lethal attack ads coupled with his economic platform that helped him squeeze out a win in Michigan.

The economic situation in Ohio much more closely resembles the national economy. It's a landscape that will likely define the fall campaign much more than the economic climate the candidates encountered this week in Michigan. And it is one that is more friendly to President Obama than the GOP expected it would be six months ago.

Economists and pundits now see the national economy as having more bounce this spring and summer than was forecasted at the beginning of the year. 

While first quarter GDP numbers will be nothing to brag about—those will likely be lower than the 3.0 percent registered in the fourth quarter—second and third quarter growth looks more promising. If so, unemployment nationally this summer will look at lot more like Ohio’s current 7.9 percent than Michigan’s 9.3 percent.

Ohio is also ahead of Michigan in its economic recovery because it is much less dependent on auto production. Its economy is more indicative of where the national economy is going and the issues that will define the fall campaign. 

Michigan witnessed a massive bailout for GM and Chrysler but lots of downsizing and layoffs came with that aid, and new hiring has not helped it recover in quite the same ways as much of the rest of America—and Ohio.

The Buckeye State looks remarkably like the American mean. Unlike liberal northeastern states more certain to go in the Obama column, it has a solid, business friendly tax and regulatory climate and a more diversified economy—and its circumstances and concerns are more squarely located where the rhetoric of the fall campaign will focus.

Both President Obama and his principal GOP challengers agree, nothing is more central to resurrecting U.S. growth and prosperity than reviving manufacturing, fixing the banks—this time, correctly—and reducing dependence on imported oil. The hard left including the people who serve in Obama’s cabinet, political moderates and even the hard right—pick a GOP contender—only disagree on the methods, not the goals.

Remarkably, manufacturing and finance each comprise 18.3 percent of Ohio’s economy, and it is a leader in bioscience and the green economy. Ohio is squarely in the cross-hairs of the new American economy—making and thinking about things that change the way we live and compete.

With an electorate friendly to Santorum’s social message in Ohio, Romney must convince voters, that the economy, though healing, is still the issue and he has better answers. That would be his challenge against Mr. Obama in the fall. If he fails to convince voters to abandon Santorum’s pious social messaging for the economy, he will likely be just as ineffective in persuading voters in November to abandon President Obama’s pontifications about fairness.

So far things have not looked good for Romney—Santorum has been leading in the Ohio polls. However, the most recent tallies show Romney closing—Quinnipiac’s latest poll has Santorum’s lead down to four points and shrinking.
If Romney can’t pull this one out, it is doubtful he can beat Mr. Obama in a campaign defined by a poor but improving economy.

Peter Morici is a professor at the Smith School of Business, University of Maryland School, and former chief economist at the U.S. International Trade Commission. Follow him on Twitter @pmorici1.

Peter Morici is an economist and professor at the Smith School of Business, University of Maryland, and widely published columnist. He is the five time winner of the MarketWatch best forecaster award. Follow him on Twitter @PMorici1.