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Arnold has spent so little time defining his public persona (beyond being a movie star) -- ie, nobody really knows what he'd do as governor -- that, now that they have this new information it's rapidly filling up people's perceptions. It's hard not to look at him now and see a sleezy groper.
Up until this weekend, Arnold's persona mostly consisted of projecting the qualities of fictional characters he's played, and I think the voters generally know the difference between fiction and reality (although many might be confused). Nobody really knows what the private man is like (and I believe that voters are obsessed primarily with a politician's biography...I believe that voters use a politicians real life to predict 90% of what they think that person would do as a politician).
So now that we're learning that, in his private time -- not in the movies -- this guy defrauded insurance companies by knocking over chimnees so he could repair them, admired Hitler, gropes women, might have an illegitimate child, and meets with corporate insiders interested in lying about the causes of the energy crises, and making sure that they don't have to give back money they stole from the public. These perceptions are rapidly filling up those gaps in Arnold's identity which the campaign fastidiously avoided addressing.
Had Arnold done more debates, and opened himself up to the public, and not limited his early "appearances" to fundraisers before friendly, planted audiences, he probably could have innoculated himself from having these perceptions hurt him.
Think about the Bush drunk driving charges in the last days of the campaign. Even though Bush wasn't exactly open with the public, his biography/persona had been firmly established by the last week of the campaign. So people were willing to take all those other conclusions they'd previously drawn and use them to forgive Bush for the new revelation which seemed so in character in many ways (we all knew he had a drinking problem, and he was stopped for going too slow for god's sake, we know he's slow!).
I think, if Arnold loses, it'll be kind of funny. All that money and effort by the media, and, essentially, he'll lose because they didn't bother telling us who this guy was beyond his fictional identity, which most people were sufficiently sophisticated to recognize as fictional. I mean, they could have created a fake private persona, but they didn't even bother doing that.
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