Updating an election prediction formula

Friends call it persistent, the enemies call it boring; either way the idea of election prediction models fascinates me. Back in mid 2006 I wrote about my favourite model - (Prediction formula ).

So I have a thing about economics and I find the concept that a particular set of indices, i.e. unemployment rate, inflation and interest rates might be a certain indicator of how an incumbent government will fair.

I used this formula to correctly predict the overall outcome of the 2007 US Mid Term election, and again with the recent Australian General election. Okay, I was out by a few seats in each, but not in the overall result.

The model has it that if two or more of these rise over a full, three-year electoral cycle, the government will lose. The problem is that governments have made it increasingly difficulty to track the key statistics. They seem to feel that obfuscation will save their arses.

The fact is, when people are hurting out there in the real world statistics don’t mean a damn. As someone said during the recent election here;

“…when families report that they can no longer afford to go for a Sunday drive or treat the family to a take out meal there is a problem”.

I don’t have the recourses or skills to dig out these key figures, which were once readily available. The problem of finding hard household figures in the US, where the focus was on the ‘booming markets’ was frustrating.

But the anecdotal evidence of a major problem, particularly in the rust belt states, was plentiful. I’m still amazed that the well oiled Republican team didn’t recognize the problem until just a week or so out from the election.

A second, more visible signal was the Wal-Mart factor. On the face of it the high gas prices leading up to the Mid Terms were blamed for an obvious drop in Wal-Mart trading. The reality is that households at the economic edges were vulnerable to any trigger, and still are.

The Australian figures were more clear cut, after all we made history by having a rate hike during an election campaign. Rudd made his own history by winning hearts and minds by refusing to join in the vote buying spree Howard was intent on. Most voters were aware of the dangers of runaway spending.

What I find fascinating is that Bush, already on the nose during the Mid Terms, has made no effort to address household economic concerns. While ordinary families are doing it tougher all the time, analysts are stuck in their own double speak:

Monetary easing by the Fed will ease the pain of stretched U.S. household finances, but not turn around risk aversion unfolding among creditors.

And the administration contents itself with creating or driving scary diversions, long after the populace has worked out that the President is naked, bereft of any real answers for the people.

But we know Bush and the Repubs will lose the White House. The real focus should be to ensure a congress with the will and the ability govern the country and guide whoever breaks through to President.

It is time for the elected houses, the representatives of the people, to take a more effective role in the US. The presidency is taking on a role more akin to Hollywood than to good governance. The star factor is all very well, but it doesn’t put food on the table.

UPDATE:

I am intrigued (even a touch concerned) by Bush’s home loan bail out plan. Say what?

"There's no perfect solution and the homeowners deserve our help." George, the solution would have been to stay awake at the wheel and manage the economy.