Bryan Caplan  

Democratic Defeat: Median Voter Model, Not Retrospective Voting

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Earl Long on Not Voting... Exit Polls...
Yesterday I presented two explanations for the Democrats' loss of the House:
1. Retrospective voting model.  They're being punished for two years of bad economic performance.

2. The median voter model.  They're being punished for being well to the left of public opinion.
The intrade data handily resolve the dispute in favor of #2.  In January of 2009, the Democrats still had an 80% chance to hold Congress.  By that point, it was already clear that the recession was deeper than expected - and that recovery would take years.  The Democrats' chances fell less than 15 percentage points over the next year; their odds of victory in January 2010 were 2:1. 

Only in January did the odds of winning the House begin their near-linear fall to zero.  During this period, the economy did about as well as expected.  The big surprise: The Democrats made the surprising choice to pass Obamacare despite public opinion.  Perhaps they expected status quo bias to save them, but as the year continued, it became clear that the public's preferences weren't quite that malleable.

In the end, I'm afraid, Obamacare will become as American as apple pie.  But it will take 5-10 years. The electoral backlash will fade out eventually but the legacy of Obamacare will never enhance the Democrats' overall popularity.  If the Democrats weren't utterly wrong about health policy, I'd praise their sacrifice for principle.  As matters stand, though, I hope Democratic politicians take away the bitter lesson that "No good deed goes unpunished."
 

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COMMENTS (7 to date)
Jacob Oost writes:

Rule of Acquisition #285.

And I'd say that poor economic performance created the *necessary condition* for a Democrat-out-kicking, even if it isn't a cause.

Now, according to you, what caused Republican losses in 1982, 2006, and 2008?

Hyena writes:

It does? What about the Intrade data gives you insight into the motivations of voters? How are you accessing their minds and discerning their reasons for voting?

How much hat will you eat when it turns out that the entire thing is predicted almost entirely by party affiliation?

David C writes:

The Intrade market was just reporting generic ballot trends; nothing else. The Intrade market had bigger swings because a few points up or down translates into huge changes in a candidate's chances of winning. Other than that, the two track almost exactly. That's not very useful. Thanks for the investment advice.

http://www.huffingtonpost.com/2009/02/13/10-us-house-genballot_n_726397.html

Blackadder writes:

Of course Democrats were punished for being to the left of public opinion. The question is whether public opinion is affected by economic conditions. Public opinion has moved right over the past two years not only on size of government/tax issues but on everything from abortion to global warming. If it hadn't done so, Democrats would have done a lot better last night.

[Link changed to permanent link.--Econlib Ed.]

Frank Howland writes:

This argument is unconvincing because it fails to clearly distinguish between news about the economy and news about the health care bill and to specify a plausible lag (if any) in forming of expectations. The expected state of November, 2010's economy probably got worse over the entire period; the health care bill's chances of passing were clearly above zero as soon as Obama was elected. If the market were very efficient and if Bryan's argument were correct we would see a very steep drop in the price of the Intrade Demo House contract (HOUSE.DEM.2010) as soon as the news that the bill would pass becomes convincing. However the price of the relevant contract on House control is higher on June 21, 2010 than it was on March 21, 2010 when the bill passed.

Thus, I doubt that Bryan's conjecture could be proved by a careful review of the evidence. At the same time, I don't think the evidence of Intrade is all that strong the other way.

John Thacker writes:

If it's the economy, why did the Democrats do relatively well in terrible-economy states like Nevada and California, but terrible in relatively low unemployment, good-economy states like North and South Dakota and Texas?

David C writes:

There are other differences between those states besides unemployment. Nevade and California traditionally lean Democratic while North and South Dakota and Texas traditionally lean Republican. They still lost votes in all five states. It is possible it was just that the swing was larger in the conservative states.

Another possibility is that it's because the outcome was primarily determined by people who were employed or retired and fairly unaffected by the recession. Such individuals are more likely to consider the unemployment situation from a national perspective which they may be more familiar with than from a local perspective which they may be less familiar with.

I also wonder if the high unemployment states were recovering faster than the low unemployment states.

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