Working out what the bounces mean. The American opinion polls really are bouncing around this election as the voters deal with the 72 year old man emerging with a new pretty face. In the last fortnight the daily tracking by Gallup has had the Democratic candidate Barack Obama going from a lead of 50% to 42% over John McCain to this morning to this morning being 43% to 48% behind. That is a volatility that we are not used to in Australian elections and reduces the help that the pollsters can give the pundits in trying to make sense of the mood of the nation. Yet through it all the prediction markets have remained relatively unmoved. Barack Obama was favoured as the winner before the Party Conventions that created the conditions for the dramatic ups and downs and he is still favoured now.

The University of Iowa, where they conduct markets on political events as part of their business school courses, actually allows us to compare directly what the pollsters say is happening now and what people think will happen when we get to November.

One of the Iowa Electronic Markets is based on the percentages of the popular vote received by the official Democratic and Republican nominees in the 2008 U.S. Presidential Election. The result is determined by the percentages of the total two-party popular vote received by each of the two parties in the 2008 U.S. Presidential Election with votes received by nominees from other parties not taken into account. The current prediction of this IEM is that Barack Obama on election day will receive a vote of 52% to John McCain’s 48%. Adjusting the average of the opinion polls on Real Clear Politics to take out the don’t knows and the minor candidates, the assessment of the current mood is Obama 49% to McCain 51%

Over the last three weeks the comparison of what the pollsters show and the market predicts is as follows:

Hope for New Zealand Labour and a Pointer for Australia? Maybe everything is not lost for the New Zealand Labour Party. The decision of the country’s Reserve Bank Governor Alan Bollard this morning to reduce the official cash rate by an aggressive 0.5 percentage points is bound to improve the standing of Helen Clark’s government which is soon to face the electorate. This is the second recent interest rate cute in NZ following an initial 0.25 of a point reduction. With inflationary conditions not dissimilar to those here in Australia perhaps this is a pointer of further relief to come here in the not too distant future.

Examples of deregulation? Politicians of all parties are fond these days of telling us about their desire to cut down on regulation and red tape which leaves me wondering where these three examples in stories appearing on our Crikey brekfast media wrap this morning fit in.
Dodgy pet shops face tough new penalties
Tougher cat laws on the way
New rules: Parent anger over lunchbox police

The rules have changed. There was a time when the minor atrocities committed by people at Parliament House parties around the country were treated by journalists in the same way as such minor atrocities at private parties anywhere else. Some journalists may have been upset by drunken debauchery while others were at its forefront but whatever the reaction none burst in to print about it. Nowadays things are different with political journalists increasingly taking unto themselves the role as arbiters of public morality. I just knew that things were changing when they shut the non members bar in Canberra! The latest politician to fall victim to his own improper behaviour is the new NSW Police Minister Matt Brown who reportedly engaged in simulated sex with a female parliamentary colleague. Given the new rules, Crikey readers might like to pass on to me all and any reports of journalists behaving badly. It is only fair that the ganders are treated the same as the geese. Send your tips to [email protected]

Peter Fray

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