Gov. Romney > President Obama > candidate Romney
I was going to do a post on this, but I see that Tyler Cowen and E. J. Dionne have beaten me to it.
BTW, A good arb possibility is opening up. Put $500 dollars on Obama to win the election on Intrade (roughly 60-40) and put $500 on Romney to win a plurality of the votes on Iowa Electronic Markets, also roughly 40-60. There’s roughly a 10% chance you’ll win both bets. Worst case is that you win one bet and lose the other. It’s a wash. Very unlikely that Obama will win a plurality and lose in the electoral college.
For some odd reason the electoral college favored the GOP in 2000, then favored the Dems in 2004 (if the vote had been tied Kerry would have won, if I’m not mistaken.) And again favors the Dems this year.
(The “odd” reason the electoral college flipped is probably a state that’s high in the middle and round on each end.)
The RGDP number was 2% and the NGDP number was 5%. Don’t believe either number. The RGDP was skewed by a 13% jump in defense. Obviously that didn’t happen, it was “accounting issues” (cue up the conspiracy nuts.) RGDP rose 1.5%.
And when NGDI is announced next month it’ll probably be around 3.5%. NGDI is a better forecast of actual NGDP than is the first estimate of NGDP itself.
PS. Disclaimer; I’m not to blame if you lose your political bet. I’m assuming anyone reading this blog is a grown-up.
PPS. Let’s see if I’m influential enough to move the IEM price.
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26. October 2012 at 15:22
That is a good bet. It seems like Romney is up nationwide, but I think Obama is ahead in the electoral college and he is up in Ohio. If he wins the states that went Democrat the last 5 times, I think he has 242 electoral votes. If he wins Ohio(and he’s up by 4-5% according to the last polls, although that is still in the margin of error), he’ll be at 260. If you add New Mexico, he’s then up to 265. All he has to do is to win a swing state bigger than New Hampshire and he’s back in.
Romney seems like he’s been up in the popular vote(Gallup has him up by 5% with likely voters), so that’s likely too. If Romney wins the electoral college, he’ll almost surely have to have won the popular vote as well.
26. October 2012 at 15:27
Meanwhile, there’s a vast right wing conspiracy developing. The coal barons are sending a climate change Frankenstorm straight into New Jersey in order to silence Krugman until after the election. 🙂
26. October 2012 at 16:00
After you win your party’s nomination by appealing to that base, you move toward the center. Not exactly, Stop the presses!
She says it pretty well;
http://www.popmodal.com/video/15320
26. October 2012 at 16:07
The bet as stated has you standing to win $333 on the first bet and lose $500 on the second (netting -$167) or lose $500 on the first bet and win $750 (netting $250). Not a great arbitrage.
I think you mean to adjust the bets so that each case has an equal payout instead of an equal wager.
For 60:40 and 40:60 and a payout of $1000 on each that is a wager of $600 on Obama on intrade and a wager of $400 on Romney on the IEM. Then you would win $1000 no matter what and have the chance to win an extra $1000 if you won both.
26. October 2012 at 16:27
Care to comment on this (Politics and the Fed)?
http://themonkeycage.org/blog/2012/10/25/independent-but-not-indifferent-partisan-bias-at-the-federal-reserve
as elections draw near, the Fed adopts a looser monetary policy when Republicans control the White House. In contrast, it adopts a tighter monetary policy when Democrats face re-election. This suggests that independence allows the Fed to lean against the use of macroeconomic policy for electoral purposes if and only if the incumbent is a Democrat. In other words, the Fed appears to be a conditional inflation hawk – it tends to deny incumbent demands for looser policy in the period before elections, but only if the incumbent making such demands is a Democrat.
26. October 2012 at 16:45
Old, old story.
Run outside during the primaries, inside in the general election.
The left wing loses election after election this way too.
It will never change as long was we have our “first past the post, two-party, electoral college” system, as it drives both parties to the center in general elections.
Good thing too.
26. October 2012 at 17:31
Scott, I’ve been thinking about gross domestic income versus ndgp
Could it be that the divergence we are seeing- slightly better than expected jobs numbers, but disappointing gdp, be a sign that employers are finally beginning to exhaust the productivity they can squeeze from the workers they have, and if they want to expand they’ll have to hire more?
P.S. NGDI does indeed seem like a better indicator. Do you have numbers during the last decades?
26. October 2012 at 17:32
By the way, arbs never work. I learned this the hard way. All that time and money being spent to look for “risk free profits, might be better spend managing the risk of more profitable opportunities
26. October 2012 at 17:48
It isn’t just the candidates that run to the center.
It is the voters themselves.
Back when I was supporting Perry I wrote a piece on how when conservatives say RINO, I say STFU.
REALITY is the general election. The primaries are a lie. You are shopping amongst an entire field of people you like more than the other guy, but since they are all splayed out, you get to be picky.
Picky is not reality.
26. October 2012 at 18:02
It’s still very unlikely that Obama will win the electoral college but lose the popular vote. According to Nate Silver’s simulations, there’s only a 5.9% chance of it happening. So 94.1% of the time your arb will come out as a wash. The likelihood of the electoral college/popular vote split situations is probably overstated in people’s head because of 2000. It’s only happened three times in history.
It’s also one of those things that’s fun to think about but in the end doesn’t really pan out quite the way you want it to (like fiscal stimulus, ba-dum-bum).
26. October 2012 at 19:08
The two main party Presidential candidates are so similar in their ideology and past behavior that it won’t matter who wins the dog and pony show general election.
27. October 2012 at 00:08
Hey MF, guess what, there’s hope for you yet: https://twitter.com/ModeledBehavior/status/261987141960208384
27. October 2012 at 00:39
Dylan Matthews sums it up: http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/10/26/gdp-grew-at-2-percent-last-quarter-heres-why-you-should-take-that-with-a-grain-of-salt/
27. October 2012 at 00:42
I would like to see Scott elaborate some more on the inequalities in the post title…
27. October 2012 at 00:46
MF: http://imgs.xkcd.com/comics/two_party_system.png
27. October 2012 at 06:07
Thomas Edison, monetary economist: http://www.bloomberg.com/news/2012-10-23/thomas-edison-s-quixotic-plan-for-a-new-monetary-policy.html
And Christopher Sims weighs in on the Eurozone: http://www.voxeu.org/vox-talks/path-sustainable-recovery-eurozone
27. October 2012 at 06:16
There’s a gap between Intrade and Betfair as well (Justin Wolfers has been going on about this for a while now): http://www.predictwise.com/politics/2012presidentindividual
27. October 2012 at 06:33
Jim Glass, I didn’t see Obama move to the center in 2008, after he wrapped up the nomination.
Darren, Polls show Romney has a 50% chance of winning a plurality (indeed he leads in the average of national polls), and yet the very guy you cite gives Obama a huge advantage in winning the election. So where does the 5.9% come from?
Saturos, I’ll do an endosement before the election.
Edward, Maybe.
TravisV, What’s their indicator of “easy money?”
27. October 2012 at 08:00
It’s true that running to the center wins general election campaigns. It’s just equally true that if the right wing is the loser due to that, then equally so are civil libertarians, anti-war types, fans of due process, fans of NGDP targeting (polls show that continued fear of inflation is the center, NGDP targeting is extreme), opponents of farm subsidies, and a host of other things, some I like, some I don’t.
In the specific case of Gov. Romney, his tactics are somewhat hamstrung by Romneycare and its obvious similarities to Obamacare. The GOP won in 2010 because Obamacare opposition was so high (and it remains high) that people would take it as part of the bundle of policies offered. Despite any comments, people are rightly skeptical of Romney’s opposition to the similar program, and he can’t really play the right-wing populist, so he plays the paternalist northeastern Yankee Republican that has always matched his personality.
To the extent he has a true self, that’s what it is. The right wing was going to be losers as soon as he was nominated. Even if he could win by staying right wing, why would he necessarily do so? They lost all leverage with him anyway, have to support him to beat Obama, so he became free to do what he wanted.
27. October 2012 at 08:13
‘I didn’t see Obama move to the center in 2008….’
That’s because the center moved toward him (or away from Republicans) due to the financial crisis. Likely to happen once or twice a century.
27. October 2012 at 08:33
Another big loser in this election, besides the right wing– environmentalists.
We’ve got President Obama bragging about how much he loves coal, and attacking then Gov. Romney for saying nice things about a coal power plant closing and being replaced by something cleaner. Both candidates are fighting over who loves coal.
27. October 2012 at 13:49
Scott
The third chart on Silver’s website is not the chance of winning the popular vote, it’s the projected share of the popular vote. The chance of winning the popular vote can be found further down under “Scenario Analysis” where he gives Romney a 29% of winning.
27. October 2012 at 17:56
John, It’s absolutely nuts to claim the public favors inflation targeting. Did you see the reaction when Bernanke announced he wanted to raise inflation to 2% in 2010? The public has no opinion on NGDP targeting, because they have no idea what it is. When I explain the idea to average people they agree it’s better than inflation targeting roughly 100.00% of the time, give or take a basis point.
Darren, Yes, I know that. And your point is?