Tuesday, September 09, 2008

Canada Catches Election Bug

After months of polling sneezes and sniffles Canada has finally succumbed to a dose of elections. PM Harper, of fixed term elections, has ignored his own reforms and opted for an early election day - October 14. The positive for Harper is that the US campaign will easily distract and override the Canadian event.

With the bulk of the population hugging the border region at least electronic media will swamp the local campaign. Print media have already relegated their US coverage, but print is shrinking when it comes to market influence. Let’s hope we see some creative campaigning to break through the noise.

Predictions

I’m still playing with viable election prediction models. My favourite, the household economic model, has proved a good indicator. That is, if any two of employment, rates and inflation move into negative numbers over three quarters a government will be dumped at the following election. However it depends on unambiguous reporting of stats on issues like employment and inflation.

Governments have taken any real precision out of most of the key indicators, in the belief that if they misreport no one will notice the reality. Given most people wouldn’t know an economy it they fell over it this is a dumb approach. But it does require a leap in subjective observations rather than relying on objective data.

 

Just lately I’ve been seeing some potential refinements to the household economic model, centered on income and social inequalities. But even there we find ambiguities, particularly when the notionally wealthy are increasingly cash poor. Even a low wage two income family can often have a greater disposable income than a high earning family.

Still, there is an indication that support will swing between conservative and progressive based on perceptions of inequality. I’m suitably convinced that economic factors are generally the key to influencing vote outcomes. I’m not convinced that inequality metrics are the right indicator. In fact I’m starting to think it is an element of that inequality – the confidence metric.

So rather than predicting outcomes of any of the current outbreak of elections I intend to try and tease out some of these hypotheses. Sadly I’m not an economist, but I will keep digging. I am convinced there is a prediction model that will take all the fun out of elections.

2 comments:

lindsaylobe said...

I think we are in for a prolonged period of uneasiness as families start to experience more of the strain of economic slowdowns and the consequences of decades which over relied upon accelerated borrowings which fuelled unsustainable consumerism.

This is true for Canada as it is for Australia, excepting our government is left with the consequences of previous over spending and the housing bubble yet to collapse. At least we have a sizeable government surplus but the private sector borrowings are still way to high, similar to the position of Canada.

So the tell tale signs will emerge in Canada who are yet to stop borrowing.

No Government as yet seems to be able to recognize the problem and its likely effect on future which will be reduced demand and employment prospects. When that happens all governments will need to look at old fashioned Keynesian economic stimulus packages to regenerate their economies. I think maybe the minority parties will be more promnant?

Best wishes

Cart said...

It really is a concern that the political establishments can continue to focus on their own petty interests rather than wider community interests.