Media post by-election analysis

There has been a fair amount of analysis of the by-elections in the media. Most of it, in TC's view, not worth much.

The media likes the Greens (partly because of their newness), but simply doesn't understand how weak the Greens really are. TC wrote about this before, demonstrating that the Greens have a very inefficient vote. The Greens are more harmed by the first-past-the-post system than other parties.

On the other hand the NDP has a highly efficient vote, and is good at focusing its resources to get results. While the NDP did not do well in this week's by-elections, the last time the NDP made a major effort, in Outremont last September, they achieved a breakthrough. TC suggests ignoring much of the analysis that has been written this week about the party's woes.

The best the Greens could do in the by-elections was to increase their vote share by a factor of 2.6 (in Vancouver Quadra). As a hypothetical exercise TC took the results of the 2006 election and multiplied the Green vote share by 2.6 in each province (adjusting the other parties appropriately). The result gives the Greens a national vote share of about 12%. However, when applied to TC's forecast model, even this large increase would still not deliver any seats to the party.

Such an increase is not likely to happen as it seems likely to TC that Elizabeth May will in some way endorse Dion in the next election. However, the risks of their collaboration were made evident in the Quadra by-election where the unexpectedly weak Liberal showing meant the Green vote almost handed the seat to the Conservatives. This may have some as yet undefined longer term impact.

TC's view is that more and more Green and NDP inclined voters are thinking about and actually voting strategically in order to prevent Conservatives from winning. One place to look for it in the next election would be in Vancouver Quadra where expectations will be changed by the results of the by-election this week. The increase in the Green vote owed much no doubt to the widespread perception that Quadra was a 'safe' Liberal constituency. Quadra indeed turned out to be a safe Liberal seat. A good definition of 'safe seat' for a party would be a constituency where, even if the party's candidate is weak and loses significant vote share to third parties, and faces a vigorous challenge from the party's major opponent, the party still wins.

By-elections: Contrasting Results

TC's observations:

1. The Liberals did exceptionally well in Toronto, poorly out west. Can one generalize about Dion on the numbers? Doesn't look like it. TC's guess is local factors were important. The candidate controversy in Saskatchewan hurt the Liberal. Turnout differential within the riding may well have helped the Conservative. The Liberal candidate in BC seemed to be weak.

2. Bad night generally for the NDP. Their vote held up better in the Saskatchewan and BC than Ontario. Their effort appeared to be minimal.

3. Good night for the Greens. It lends credibility to polls showing them doing well. They look like a continuing problem for both the Liberals and the NDP. However, the close outcome in Quadra will likely lead to strategic voting in the general election that boosts Liberal numbers next time. The Greens continue to have the least efficient vote. In most of TC's forecasts in the past few years they don't win a single seat. Their leader's claims (that they can win 6 to 12 seats) should be discounted.

4. Mixed night for Harper but winning even one seat is a boost. Loss in Quadra, which could have gone the other way, is a blow. His inept Finance Minister probably cost them votes in Ontario.

5. TC has a method to project province-wide numbers from the individual riding results. Here is a table that displays them and calculates province-wide seat numbers from the projection (need to be taken with a grain of salt).

	Liberal	C.P.C.	NDP	Green
Ontario	47.0	32.0	10.3	10.0
Seats	83	23	0	0
Saskatchewan	16.0	53.6	25.9	4.5
Seats	1	13
BC	19.0	43.1	24.0	13.1
Seats	4	25	7

Enough said.

UPDATE: Well, not enough. The by-election numbers are essentially consistent with this latest Harris-Decima survey.

Bear Sterns and Politics

TC sees the emerging financial and economic crisis as an event whose economic significance will be matched a few months from now by its political significance.

In U.S. politics that means the chatter about Obama's preacher, or the Hillary Clinton campaign's feud with Daily Kos, will be long forgotten in the midst of a debate about the U.S. economy. TC's view (for what its worth) is that Obama, barring a Spitzer-like episode, is going to be the Democratic nominee. Much of what Clinton is now doing looks like what you would expect from a candidate whose campaign is slowly unwinding.

In the meantime there are a number posts on the web about the economic crisis worth reading including:

1. Paul Krugman's column today and his blog (I especially liked this).
2. Harold Chorney's post on the Bear Sterns takeover.
3. This column by Nouriel Roubini, now a few weeks old.
4. And finally this post by Marc Lee [with the wonderful title Monetary policy in the time of (financial) cholera] who gets the final word:

To the extent that this financial crisis spreads to the real economy, we (Canada) will need to limber up our fiscal policy. If that happens, the first place to start is by running a deficit – a deficit will happen “naturally” due to weakening macro forces given the razor thin surpluses in Ottawa looking forward. The trick is not to start cutting spending for the sake of a balanced budget under any circumstances.

By-elections latest

The electionprediction.org site predicts three Liberal wins in the cities plus the Conservatives in the Saskatchewan seat. It should be understood these are predictions by the person who runs the site. His record is good but far from perfect.

Meanwhile, the Green Party has released the results of polls in three of the four ridings, predicting a Conservative win in Saskatchewan plus Liberal wins in Willowdale and Quadra. While the Greens trail, the results are not surprisingly flattering to them, ranging from 12 to 19% (higher if the undecided are excluded). TC thinks they look much too high. Curiously however, no poll in Toronto Centre.

The four federal by-elections: what should we expect?

There will be four by-elections on Monday March 17 in ridings won by the Liberals in the last election. Three of the four are in urban constituencies won by wide margins by well known incumbents, all of whom were members of Paul Martin's cabinet. In the 2006 election in Toronto Centre Bill Graham won with 52.2% of the vote; in the Toronto riding of Willowdale Jim Peterson had 55.2% while in Vancouver Quadra Stephen Owen won 49.1% of the vote. The fourth, in the northern Saskatchewan riding of Desnethé--Missinippi--Churchill River, elected Liberal Gary Merasty in 2006 by a mere 67 votes out of 24,636 cast as he won just 41.4% of the vote.

They are seen as a test of Stéphane Dion's leadership because there does appear to be a real lack of confidence in his leadership within the Liberal party, not just by the usual suspects in the media. TC isn't sure, however, that the by-elections provide much of a test.

In the case of Toronto Centre Liberal candidate Bob Rae is better known than his predecessor and could thus top Graham's 2006 performance. By comparison Martha Hall Findlay is not nearly as well known in her Willowdale riding (she ran previously in Newmarket--Aurora in 2004 where she lost narrowly to Belinda Stronach), but should win easily although her vote percentage could well fall short of the Liberal share in 2006.

The Conservatives could easily win the Saskatchewan riding (which they did win in 2004) but it may not be of any significance. The NDP is a factor here too (Rick Laliberté won this riding in 1997 and then was re-elected as a Liberal in 2000). Their candidate is Brian Morin. The Liberal candidate is Joan Beatty a former NDP cabinet minister in the Calvert government who defected to the Liberals just after the last provincial election. She might confront resentment at the opportunism of her move. TC certainly has not been able to find any hard information to suggest which way the political winds may be blowing in northern Saskatchewan, but purely local factors could well predominate.

In Vancouver Quadra the Liberal candidate is former BC cabinet minister Joyce Murray, who previously represented a riding quite distant from Quadra. Her situation looks much like that of Martha Hall Findlay at the riding level.

The public opinion evidence can best be described as unclear. The last Angus Reid Online Poll found the Conservatives well ahead in BC outperforming their support in 2006, but trailing the Liberals in Ontario by roughly the same margin as in 2006. By contrast the most recent Harris-Decima found the two parties approximately tied in both BC and Ontario in terms of their three week averages, meaning better Liberal support in BC than 2006 but a weaker performance in Ontario.

The impact on a possible federal election is relatively simple to assess: a Liberal sweep by higher percentages than in 2006 would put us on the road to an early election. A perceived setback for the Liberals would likely postpone a federal election at least until the autumn.

The debate about Dion's leadership seems almost pointless to TC. He will lead the Liberals in the next election regardless, and he could even win. Typically governments lose elections; opposition parties don't win them. While an upset by Dion doesn't seem at all likely, don't forget that the inept Joe Clark defeated Pierre Trudeau in 1979. Five years of unemployment and growing inflation are what made the difference then. The economy in Canada is strong today, but the deterioration now happening south of the border will get here eventually, so the outcome of the next election cannot be predicted this month with any certainty, and the by-elections, whatever the outcome, won't mean a thing in six months.

The impending downturn and the political fallout

In an earlier post I compared the political impact of recessions to the military consequences of using nuclear weapons.

Today Paul Krugman wrote the following:

Four years ago, an academic economist named Ben Bernanke co-authored a technical paper that could have been titled “Things the Federal Reserve Might Try if It’s Desperate” — although that may not have been obvious from its actual title, “Monetary Policy Alternatives at the Zero Bound: An Empirical Investigation.”

Today, the Fed is indeed desperate, and Mr. Bernanke, as its chairman, is putting some of the paper’s suggestions into effect. Unfortunately, however, the Bernanke Fed’s actions — even though they’re unprecedented in their scope — probably won’t be enough to halt the economy’s downward spiral.

After that column had been written, along came the news that a leading U.S. Investment Banker - Bear Stearns - had to be bailed out by J.P. Morgan Chase and the Federal Reserve Bank of New York, and the Dow dropped just under 200 points.

So we seem headed for a recession. However, the Federal Reserve recognizes the fact and is moving quickly to do something about it There is also some budgetary stimulus. That means even a 1929 type crash would not likely be followed by a steady descent into depression, but a rough ride of some kind seems assured at least in the short run. It is going to take some time to reach Canada and the global commodity boom will cushion in the impact for the immediate future but a widespread downturn would affect us too.

The political fallout in the United States should be visible soon.

UPDATE: Bush has admitted the economy is in trouble while Republican Senator Norm Coleman calls it a recession.

The Shape of Things to Come?

The Democrats won a safe Republican Congressional district in a special election yesterday.

Consider this:

The Chicago Tribune calls it "a stunning upset Saturday that could be a sign of trouble for Republicans this fall." In The Chicago Sun-Times, the conclusion is that it's a "major blow to the Republican Party."

Or this from the New York Times:

The election here was expensive, bitter and, with its rash of television commercials, impossible to ignore. The national political parties clearly saw it as a critical one.

By last week, the National Republican Congressional Committee had poured $1.2 million into this race; the Democratic Congressional Committee had given more than $620,000.

Or this:

Bill Foster ran strong on Iraq the whole campaign, with several ads focused on withdrawal and the costs of the war. This was a heavily Republican district that turned on an anti-war and pro-civil liberties message to a Democrat.

Here is Foster's anti-Iraq war tv ad: