The Pick-Your-Poison Paradox

Over at The Daily Beast, Matt Miller looks far ahead -- very far ahead -- to that point in time when the economy has achieved some semblance of normalcy, and we have the comparative luxury of focusing on paring down the national debt, which of course will have grown significantly by then. Miller's argument is that a tax increase is inevitable at that stage -- and so Obama ought to man up and acknowledge as much:

He may as well get out ahead of it. The drumbeat from the GOP about Obama’s colossal debt, previewed in the offstage budget skirmishes of the last two weeks, will become a primal Republican scream in the midterm elections. So rather than the divert-and-evade strategy, here’s how I would frame the debt issue if I were the president:

“Job one, two, and three is economic recovery,” Obama might say. “For the next three years that means unprecedented deficits to help boost this economy. I wish we didn’t have to run up $3 to 4 trillion in new debt to jumpstart growth—but I make no apologies for doing whatever it takes to get the economy out of the hole I found it in. Once we get past this downturn and back on the path to growth and prosperity, however—and we will—we’ll need to examine ways to ratchet this debt down much faster. The debt numbers in my budget for five or eight years from now are in that sense placeholders until we get through this mess. At that time, my view is that everything should be on the table. But first things first.”

I'm not sure that I agree with Miller -- if and when the economy actually recovers, that is when the public would seem to have more patience for a discussion about tax increases. Right now, Obama probably has to conserve his political capital to ensure we can get to that point -- and that means talking about lowering taxes, not raising them.

Clearly, however, this is a choice among least-bad options for Obama. As it stands, his budget includes rather large deficits (larger still if you use the CBO's figures) and he's taking a lot of flak for that. But, if he purported to balance his budgets but had to increase taxes in order to do so, he'd be taking a lot of flak for that too. So what, we might ask, does the public fear more: the prospect of ballooning deficits or the prospect of higher taxes?

It turns out that the answer is somewhat paradoxical. The public is generally willing to forgo tax cuts in order to balance budgets. An AP-Ipsos poll conducted in November 2004 probably put the question to voters the most directly: "if you had to choose, would you prefer balancing the budget or cutting taxes?" -- 66 percent chose balancing the budget. The public is generally not willing, however, to raise taxes in order to balance budgets. A Pew Poll in October 2005, for example, found that 70 percent opposed increasing taxes to reduce that year's budget deficit, while just 26 percent supported it. Thus, there seems to be a sort of endowment effect in play: if you promise to raise someone's taxes, the public feels as though something is being taken away from them, and they become very squeamish about it. But they are not so concerned about forsaking future tax reductions that they do not yet have.

It doesn't take any great leap of insight, of course, to suggest that it's easier to lower taxes than to raise them. But this is something slightly different: it's easier to not lower taxes than to raise them. In other words, lowering taxes and then having to raise them again will probably entail a substantial net loss of political capital and is something to be avoided (unless, of course, you can pawn the increase off on the next administration).

One relatively smart thing the White House seems to have done is to bundle their middle-class tax relief with their stimulus package. Since stimulative tax cuts are supposed to be temporary and were billed as such, this will create less of an endowment effect going forward as compared with a standalone tax bill.

There is, of course, one other way out of the dilemma. I'd bet that people are more than willing to raise taxes in order to balance budgets -- provided that they aren't the ones paying them. Raising taxes on the rich is currently quite popular, with more than 70 percent of the public supporting a tax increase on people making $250K or more per year. Obama's budget already includes an implicit tax increase on the wealthy in the form of phasing out the Bush tax cuts. But he probably has some wiggle room on top of that in the form of a millionaires tax bracket or something else. Given the alternatives, indeed, it's virtually impossible to imagine taxes on the wealthy not having been increased substantially by the time Obama's four years in office are up.

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NY-20: Absentee Ballot Distribution Appears to Favor Murphy (D)

The New York State Board of Elections has a lot of data (.pdf) out on absentee ballots in the special election in that state's 20th Congressional District, which will be vital in breaking the virtual tie between Scott Murphy and Jim Tedisco.

One thing that seems fairly clear is that there tend to be a relatively higher proportion of absentee ballots returned in counties where Murphy performed well on election night. For example, Columbia County, where Murphy won 56.3 percent of the of the vote last week, accounted for 9.8 percent of ballots on election night, but accounts for 15.3 percent of absentees. Conversely, Saratoga County, which is a Tedisco stronghold, represented 36 percent of ballots on election night but only 27.2 percent of absentees:



If I simply apportion the absentee ballots based on the distribution of the election day vote in each county, I show Murphy gaining a net of 173 ballots during the absentee counting phase. In addition, as Michael Barone has noted, although a plurality of the absentee ballot returns are Republican, they are somewhat less Republican than registration in the district as a whole.

The absentee ballot counting process begins tomorrow. Murphy presently appears to lead by 83 votes, although the numbers have been fluctuating somewhat wildly. While nothing's for sure yet, things are starting to look a bit difficult for Tedisco; he may need some good news from one of the two counties that have yet to finish re-canvassing their results, or a lot of help from military absentee ballots (of which only about 200 were returned).

(n.b. See also Campaign Diaries, which has a similar analysis)

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Irrationality versus Naivete

Robert Shiller's Irrational Exuberance is probably one of the best and most important works of the past quarter-century -- in economics or in any other field. In contrast I found his new book Animal Spirits (written with George Akelrof) to be somewhat hastily put-together and certainly less persuasive. Nevertheless, Richard Posner's critique of the latter work -- and by extension, the discipline of behavioral economics -- strikes me as rather shallow.

Here's Posner:

People buy common stock when stock prices are rising. They (notoriously) bought houses during the early 2000s when house prices were rising. Since almost no one can predict the ups and downs of the stock market or the housing market, these purchases must have been motivated, Akerlof and Shiller argue, by something other than a rational investment strategy. But this is not at all obvious, or implied by Keynes's usage. Stocks have generally been a good investment, at least when held for a considerable period. And since no one is able to time market turns, no one knows when the market is overpriced and therefore when one should sell rather than buy. Indeed, the idea of selling at the "top" of the market is incoherent, because if it were known that stock prices had peaked, no one would buy. Buying stock, or buying a house, is at any time a guess about the future, a venture into the unknown. Yet that does not imply irrationality.

Stop there. First of all, the notion that "no one is able to time market turns" is not really true. It is notoriously difficult to predict whether the market will go up or down tomorrow. But it is not necessarily all that difficult to predict whether an above-average or below-average return can be anticipated from the market over the medium-to-long term. As Shiller demonstrated in Irrational Exuberance, there has in fact been a fairly strong predictive relationship between the price-to-earnings ratio exhibited by the market at any given time and its long-term average return:

There really are times when stocks are cheap and expensive. When P/E ratios are low, one tends to make a better return in the market; when they are high, one tends to earn a lesser one (though not necessarily to take a loss). The mystery that Shiller is trying to solve is how a pattern like this can manage to sustain itself. It is a mystery precisely because the patterns are relatively obvious -- just as the housing bubble was in fact relatively obvious when one looks at something like price-to-rent ratios.

Posner continues:

In the early 2000s, interest rates were very low because of a mistaken decision by Alan Greenspan (but who knew?); and since a house is a product purchased with debt (a mortgage), houses became a more than usually attractive investment. The housing stock expands only slowly because it is so durable, so the increase in demand for houses outran the increase in supply (new housing starts), causing prices to rise. Since very few economists and no government officials warned of a bubble, it was not irrational for people to think that houses were a good investment, even though house prices had risen steeply since the 1990s.

They were wrong. But mistakes and ignorance are not symptoms of irrationality. They usually are the result of limited information. Ben Bernanke, in October 2005, just before the housing bubble began to leak air, denied that the rise in housing prices was a bubble. Was he irrational? That the errors of experts can lead to disaster is hardly a novelty, but it does not follow that only an irrational person would heed the advice of experts.

Posner's argument seems to be: the "experts" were wrong, so who can blame the common folk for listening to them?

One immediate problem with this is that quite a lot of experts -- Shiller, Paul Krugman, Nouriel Roubini, Dean Baker, just to cite a few -- were calling the housing bubble well in advance. Many others weren't, of course. So one question is why the optimistic experts tended to be listened to by the markets while the pessimistic ones weren't. And here, I think behavioral and institutional explanations must play a role, including things like optimism bias and status quo bias. It takes a lot of intellectual energy to claim that the collective wisdom of the markets is incorrect, but much less so to rationalize their behavior.

Moreover, even if there were some kind of demonstrable consesnsus among experts that housing prices were A-ok, this does not really rebut Shiller's argument so much as it shifts its burden. Instead of asking why the people were wrong, we instead need to ask why the experts were wrong. Posner's assumption seems to be: these people are experts -- how could they possibly have been wrong (at least given what they knew at the time)? I would suggest that in Posner's question therein lies the answer: it is precisely the tendency of experts to consider themselves infallible that frequently leads them astray.

Finally, Posner makes a big deal about the distinction between "irrationality" and "limited information". This reminds me of the old experiments in which a student is intentionally fed misleading information by his (supposed) peers and winds up providing an incorrect (and perhaps even ridiculous-seeming) response to a question as a result. Is the student in fact being "irrational" when he does this? Or is he merely being naive -- making the best decision he can based on the information provided to him, given that the heuristic "when in doubt, trust the opinions of your peers" is usually fairly useful?

I would argue that it does not actually matter all that much; the point is that he has made an objectively poor decision. Likewise, the ultimate question raised by Shiller is to what extent we can count on markets to efficiently (i.e. correctly) price different types of commodities. If there are market failures, whether we attribute them to "irrationality" or "imperfect information" seems to be a somewhat (although not entirely) semantic discussion.

Where Posner's critique is more successful is in questioning what specific policy prescriptions should follow if Shiller's thesis are correct; this too was something that I found somewhat wanting in Animal Spirits. Ultimately, the implications may be more pedagogical than political: we need to encourage individuals to engage in a certain amount of de-programming, and to question the world around them at every stage of their lives, including both the judgment of experts and their own assumptions and thought processes. But this conclusion may be uncomfortable for a lot of people, possibly including Posner.

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Government Spending, Equality and Development

Chris Bowers has an interesting and somewhat tongue-in-cheek post up at Open Left in which he looks at the amount of government spending as a fraction of GDP in different countries and uses it to infer how "socialist" or "capitalist" a given economy is. For example, in the United States this year, total government spending (including spending by state and local governments) may approach about 45 percent of GDP. Therefore, the United States, it can be claimed, is 45 percent socialist!

I don't quite buy this definition of "socialist" (and like I said, I don't think Chris entirely does either). This is because I tend to see government expenditures as performing two somewhat unrelated functions with respect to the economy. One function is in providing a social safety net; this certainly veers toward the idea/ideal of social democracy (or democratic socialism). The other is in serving as sort of a benevolent monopolist, taking advantage of the its unique amalgamation of wealth and resources to correct for market failures. The Federal Reserve is an example of such a function. Correcting for externalities, such as pollution, is an example of such a function. Arguably something like stimulative spending is too, in which the government creates demand when the private sector is unwilling or unable to do so. Such interventions, it is hoped, can augment near- and long-term growth. They will not necessarily increase equality, however, and in some cases (such as the TARP intervention) may actually do the opposite.

In any event, I thought it was worth looking at whether those countries that tend to have greater levels of government spending also tend to have greater equality, as measured by something like the Gini Coefficient. I have further broken countries down into five quintiles as measured by the UN's Human Development Index:



It turns out that in developed economies, there is a fairly strong relationship between the amount of government spending and the amount of income equity. Western European governments, for example, have generally accounted for a greater fraction of their countries' economies than have the United States, and they also tend to have more equal distributions of wealth. This relationship does not exist, however, in underdeveloped economies, perhaps because excessive levels of corruption render the idea of the "benevolent monopolist" moot (instead, the government is acting like more of a cartel for the wealthy and the privileged).

It also must be pointed out, however, that developed economies in general tend to have more actively involved governments. Government spending accounted for 47 percent of GDP in the most developed economies, versus 34 percent in the least developed. Developed countries also have much greater levels of income equity than do underdeveloped ones, the United States being a partial exception.

The real questions, of course, involve which way the arrows point. Are developed countries wealthier because they have tended to place a greater premium on income equity? Or do they have the luxury to do so because they are wealthier? I'm not going to attempt to answer those questions here (and in fact, I don't have anything more than the vaguest of opinions about them), but I thought this context might be helpful for those of you who might seek to.

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Whigs, Federalists Strongly Differ on Support for Obama

These are highly partisan times in America. "Bipartisanship" (or, in the Obama nomenclature, "post-partisanship") makes for a catchy campaign slogan, but is difficult to execute upon in practice. The White House's aspirations (or pretense) of running a bipartisan administration died a quick and ugly death with two events: firstly, the House Republicans' decision to whip votes against Obama's stimulus package so as to produce a unanimous nay vote, and secondly, the Administration's decision to try and kneecap Rush Limbaugh.

Nonetheless, measurements of the partisan split in support for the President, as Pew Research has done here (they found a record partisan split in Obama's approval ratings, with 88 percent of Democrats but just 27 percent of Republicans approving of Obama's performance) are not quite as straightforward as they might seem. This is because partisan identification is at least somewhat fluid. The Republicans, in particular, have lost quite a bit of support over the past several years; those persons who continue to identify as Republicans are a hardened -- and very conservative -- lot. Just 24 percent of voters identified as Republican when Pew conducted this survey in March, which is roughly as low as that total has ever gotten.

We see some evidence of these effects in the comparison of Obama's numbers to those of George W. Bush's at a comparable point in his presidency. Obama and Bush had roughly the same level of support among members of their own party (88 percent for Obama, 87 percent for Bush) and roughly the same level of support among unaffiliated voters (57 percent for Obama, 56 for Bush). Bush, however, had more support from the opposition party (36 percent of Democrats versus 27 percent of Republicans). And yet Obama, not Bush, had the higher overall approval rating, because Democrats are a significantly larger constituency than Republicans.



A more telling measure might be to see a breakdown in support by voters who identify themselves as conservative, moderate or liberal. These categories are somewhat fluid too -- but less so than partisan ID.

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Why Marijuana Legalization is Gaining Momentum

Back in February, we detailed how record numbers of Americans -- although certainly not yet a majority -- support the idea of legalizing marijuana. It turns out that there may be a simple explanation for this: an ever-increasing fraction of Americans have used pot at some point in their lifetimes. The following chart details marijuana usage rates by age as determined from a 2007 survey conducted by the Substance Abuse and Mental Health Services Administration:



The peak time for pot usage occurs at or about age 20 -- a period known to most of us as "college" -- before declining fairly rapidly throughout one's 20s and then plateauing from roughly age 30 through age 50.

More important to the policy debate, however, may be the fraction of adults who have used marijuana at any point in their lifetimes. This is a dual-peaked distribution, with one peak occurring among adults who are roughly age 50 now, and would have come of age in the 1970s, and another among adults in their early 20s. Generation X, meanwhile, in spite of its reputation for slackertude, were somewhat less eager consumers of pot than the generations either immediately preceding or proceeding them.

The key feature of this distribution is how rapidly lifetime usage rates decline after about age 55 or so. About half of 55-year-olds have used marijuana at some point in their lives, but only about 20 percent of 65-year-olds have.

There is not, of course, a one-to-one correspondence between having used marijuana and supporting its legalization; one can plausibly support its legalization without having ever inhaled, or vice versa. Nevertheless, I would venture that the correlation is fairly strong, and polls have generally found a fairly strong generation gap when it comes to pot legalization. As members of the Silent Generation are replaced in the electorate by younger voters, who are more likely to have either smoked marijuana themselves or been around those that have, support for legalization is likely to continue to gain momentum.

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Will Iowans Uphold Gay Marriage?

The Iowa Supreme Court ruled today that same-sex marriage is protected under that state's constitution.

As in California, there will of course be an effort to amend the state constitution to prohibit gay marriage. In Iowa, however, the hurdle to amending the constitution is fairly high: it will have to be approved by two consecutive sessions of the state legislature and then by a majority of the voters. Most likely, this means that Iowans won't vote on the issue until 2012.

This is good news for defenders of marriage equity, because while you might know it from Proposition 8's victory last year, voter initiatives to ban gay marriage are becoming harder and harder to pass every year.

I looked at the 30 instances in which a state has attempted to pass a constitutional ban on gay marriage by voter initiative. The list includes Arizona twice, which voted on different versions of such an amendment in 2006 and 2008, and excludes Hawaii, which voted to permit the legislature to ban gay marriage but did not actually alter the state's constitution. I then built a regression model that looked at a series of political and demographic variables in each of these states and attempted to predict the percentage of the vote that the marriage ban would receive.

It turns out that you can build a very effective model by including just three variables:

1. The year in which the amendment was voted upon;
2. The percentage of adults in 2008 Gallup tracking surveys who said that religion was an important part of their daily lives;
3. The percentage of white evangelicals in the state.

These variables collectively account for about three-quarters of the variance in the performance of marriage bans in different states. The model predicts, for example, that a marriage ban in California in 2008 would have passed with 52.1 percent of the vote, almost exactly the fraction actually received by Proposition 8.

Unsurprisingly, there is a very strong correspondence between the religiosity of a state and its propensity to ban gay marriage, with a particular "bonus" effect depending on the number of white evangelicals in the state.

Marriage bans, however, are losing ground at a rate of slightly less than 2 points per year. So, for example, we'd project that a state in which a marriage ban passed with 60 percent of the vote last year would only have 58 percent of its voters approve the ban this year.

All of the other variables that I looked at -- race, education levels, party registration, etc. -- either did not appear to matter at all, or became redundant once we accounted for religiosity. Nor does it appear to make a significant difference whether the ban affected marriage only, or both marriage and civil unions.

So what does this mean for Iowa? The state has roughly average levels of religiosity, including a fair number of white evangelicals, and the model predicts that if Iowans voted on a marriage ban today, it would pass with 56.0 percent of the vote. By 2012, however, the model projects a toss-up: 50.4 percent of Iowans voting to approve the ban, and 49.6 percent opposed. In 2013 and all subsequent years, the model thinks the marriage ban would fail.

Below are the dates when the model predicts that each of the 50 states would vote against a marriage ban. Asterisks indicate states which had previously passed amendments to ban gay marriage.

2009 (now)
Vermont
New Hampshire
Massachusetts
Maine
Rhode Island
Connecticut
Nevada*
Washington
Alaska*
New York
Oregon*

2010
California*
Hawaii
Montana*
New Jersey
Colorado*

2011
Wyoming
Delaware
Idaho*
Arizona*

2012
Wisconsin*
Pennsylvania
Maryland
Illinois

2013
Michigan*
Minnesota
Iowa
Ohio*
Utah*
Florida*

2014
New Mexico
North Dakota*
Nebraska*
South Dakota*

2015
Indiana
Virginia*
West Virginia
Kansas*

2016
Missouri*

2018
Texas*

2019
North Carolina
Louisiana*
Georgia*

2020
Kentucky*

2021
South Carolina*
Oklahoma*

2022
Tennessee*
Arkansas*

2023
Alabama*

2024
Mississippi*

The model predicts that by 2012, almost half of the 50 states would vote against a marriage ban, including several states that had previously voted to ban it. In fact, voters in Oregon, Nevada and Alaska (which Sarah Palin aside, is far more libertarian than culturally conservative) might already have second thoughts about the marriage bans that they'd previously passed.

By 2016, only a handful of states in the Deep South would vote to ban gay marriage, with Mississippi being the last one to come around in 2024.

It is entirely possible, of course, that past trends will not be predictive of future results. There could be a backlash against gay marriage, somewhat as there was a backlash against drug legalization in the 1980s. Alternatively, there could be a paradigmatic shift in favor of permitting gay marriage, which might make these projections too conservative.

Overall, however, marriage bans appear unlikely to be an electoral winner for very much longer, and soon the opposite may prove to be true.

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Revisionist History in NY-20

Stu Rothenberg is usually a pretty decent analyst, but as one might say of an underachieving soccer football soccer player, his form was rather poor in his Roll Call column today:

[T]hink what this election would have been like for Republicans if it had occurred last November. Murphy would have buried Tedisco by 6, 8 or maybe 10 points.

The absence of George W. Bush as a factor in this race helped Tedisco, and it suggests that while Republicans certainly haven’t turned the page on the past eight years and still have plenty of damage to repair, they have hit the bottom and are starting to bounce back. That is good news for the GOP.

Would Scott Murphy, who incidentally now trails Jim Tedisco by 12 (!) votes, have "buried" him by 6-10 points if the two candidates went head to head on November 4th? This is Rothenberg's assertion. Unfortunately, he does not provide any evidence to support his conclusion, nor is at all intuitively obvious.

There are three benchmarks that one can conceivably use to infer what Scott Murphy's performance might have been on November 4th.

Option one is to compare it against the Democrat who was actually running that day -- incumbent Kirsten Gillibrand. Gillibrand won her race decisively on November 4th, securing 61.8 percent of the vote against opponent Sandy Treadwell. However, Gillibrand was an incumbent, and for a number of reasons ranging from fundraising muscle to deterring stronger challengers from entering the race, the incumbency advantage is quite powerful in Congressional elections. Even in 1994, a very bad year for incumbent Congressmen, about 90 percent of them were re-elected. So it would be hard to consider this an apples-to-apples comparison. And by the way, if either candidate had incumbent-like advantages in NY-20 on Tuesday, it was not Murphy but Tedisco, who started out with much stronger name recognition as the Minority Leader of the New York State Senate; Murphy had never run for elected office before.

Option two is to compare Murphy's performance against Barack Obama's on November 4th, as Michael Barone does. I don't think there's anything terribly wrong with doing this, although it's a little imprecise; if memory serves, there were something like 50 Congressional Districts in which a Republican won the Congressional Seat while Barack Obama won the Presidential ballot, or vice versa. In any event, Murphy comes out looking reasonably good if you do this; he won 50 percent of the vote on Tuesday (give or take some small fraction) versus Obama's 51 percent on Election Day.

The third method, which I consider to be the most robust, would be to compare the results in NY-20 to that of similar congressional districts. I already did a version of this based on the Cook PVI, and found that a 50:50 split of the vote is almost exactly what you'd expect in this district. Among 58 districts with PVI's of between R+1 and R+4 (NY-20's is either R+2 or R+3, depending on which elections you include in the total), Democrats won 30 seats (including NY-20) on November 4th and Republicans won 28.

A slight variant of this approach would be to look 2008 data only. Barack Obama won 51 percent of the vote in NY-20 on November 4th. How did congressional candidates perform in other districts where he received between, say, 50 and 52 percent of the vote? Again, we see essentially an even split; Republicans won 16 of 30 such districts and Democrats won 14:

Won by Republicans (16): CA-24, CA-25, CA-26, CA-44, CA-45, CA-50, FL-10, FL-18, MI-4, MN-3, NE-2, NJ-7, NY-23, VA-4, WI-1, WI-6

Won by Democrats (14): FL-22, KS-3, MI-1, MI-7, MN-1, NC-2, NJ-3, NY-1, NY-19, NY-20*, NY-24, TX-23, VA-2, WA-3

There may well be a case to be made that Scott Murphy would have won by 6 or more points on Election Day. But the case doesn't make itself, nor does Rothenberg really try to make it. As Markos Moulitsas points out, in fact, Rothenberg had written back in February that he thought NY-20 would be a tough hold for the Democrats!

The more interesting and credible argument, I think, is advanced by Barone:

The more appropriate benchmark is the 2008 presidential election, in which Barack Obama carried the district 51-48 percent. Comparing that to Murphy's current 50.01-49.99 percent lead, we find Murphy running .7 percent behind Obama and Tedisco running 2.3 percent ahead of McCain. We don't see the falloff here from the Obama percentage that we did in the December 2 Georgia Senate runoff, in which Democrat Jim Martin won 43 percent of the vote in a state where Obama won 47 percent of the vote. In that election, in the two special elections for the House in Louisiana in December and for a set of legislative and Fairfax County special elections in Northern Virginia in January and February, Democratic turnout dropped off much more sharply than Republican turnout as compared to the November 2008 results. That's not the case here. Tedisco got 49 percent of the McCain vote; Murphy got 46 percent of the Obama vote—a difference, but not a big one. Obamaenthusiasm is reasonably alive and well in Upstate New York.

Or at least in a district in which there are relatively few of the two voting blocs that gave Obama huge majorities. The district's population is only 2 percent black. And although there are many small colleges in the district, there aren't the huge campuses or large university towns or thriving singles neighborhoods that you find in some districts. Black turnout seems to have declined sharply in the special elections mentioned above. There simply wasn't much black turnout to decline in the New York 20th.

Barone's argument is that we might indeed expect Democratic performance to decline from November 4th in certain types of congressional districts -- in particular, those districts with large numbers of younger and/or African-American voters, who have historically been inclined to turn out in much greater numbers when there is a Presidential race on the ballot (and were particularly so for Barack Obama) than when there isn't. However, NY-20's constituents are very white and relatively old, so we didn't see much drop-off there.

I find this case rather persuasive; in fact, it dovetails pretty well with what I recently wrote at Esquire about midterm elections:

The answer to the riddle may be this: While a president’s coattails can be strong at the midterms, they are not as strong as when the president himself is on the ballot. And in fact, the bigger a president’s coattails are when he is elected, the more trouble his party tends to have two years later. Therefore LBJ, who had cruised to election by 23 points in 1964, saw his party shed nearly 
fifty seats two years later. But George W. Bush, who had in fact lost the popular vote in 2000, was one of the few incumbents to see his party gain ground in the subsequent election.

Many of the voters who went to the polls in 2008 did so because of Barack Obama; almost 90 percent of those voters also happened to vote Democratic for Congress. But many of those voters will not turn out next year without a presidential race to pique their interest. Some of the same Democratic representatives who most benefited from Obama’s coattails in 2008, then, are also the most vulnerable to an upset. Their fate may depend on how much this president can personalize that election — and, of course, how much he can mobilize his powerful voter-turnout operation for them — and how well liked he can remain. Obama’s popularity is the Democrats’ greatest asset heading into the midterm elections in 2010 — but it is also in some sense their greatest liability.

That is, we should expect some decline for Congressmen who come from the same party as the incumbent President, because some of their votes came as a result of Presidential coattails -- coattails they won't have when the President isn't on the ballot. In fact, the larger the sitting President's victory margin upon his last election to the Oval Office, the steeper this decline tends to be.

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Comparing Election Outcomes to Poll Aggregates, by State

The readers at fivethirtyeight.com don't need to be told that the election results from 2008 matched Nate's pre-election poll aggregations in almost every state. But it's also interesting to look at some of the discrepancies:

The biggest discrepancy is in Hawaii, which Obama visited a few days before the election to go to his grandmother's funeral. Then there's Nevada--I don't know what was going on there, but probably Nate does. Beyond that, there's a systematic pattern that Obama did better than the polls in Deomocratic states and worse than the polls in Republican states. Does this represent a real pattern of voters--perhaps people reverting to their more predictable positions at the last minute, with Vermonters moving to the Democrats and residents of Wyoming going the other way? Or maybe it's an artifact of the poll aggregation, with the predictions being pushed too close to 50%, on average? I don't know. It would be interesting to do similar aggregations of state polls from 2000 and 2004, and also to look at national polls, to see if this pattern was occurring in earlier years.

The discrepancies had very little impact on the election forecast because most of the problems were in landslide states. If the poll aggregation predicted Obama would get 60% in Delaware and he actually got 62%, it doesn't really matter anyway. But it could be interesting to study such systematic discrepancies with the goal of improving the methods for the future.

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Should the Democrats Primary Chris Dodd?

The news is bad -- very bad -- for Senator Chris Dodd:

Connecticut Sen. Christopher Dodd trails former U.S. Rep. Rob Simmons, a possible Republican challenger, 50 - 34 percent in the 2010 Senate race, according to a Quinnipiac University poll released today, as voters disapprove 58 - 33 percent of the job the Democratic incumbent is doing, his lowest approval rating ever.

Matched against two other possible Republican challengers, Sen. Dodd trails both State Sen. Sam Caligiuri 41 - 37 percent and former ambassador Tom Foley 43 - 35 percent, the independent Quinnipiac (KWIN-uh-pe-ack) University poll finds.

In the Dodd-Simmons matchup, Democrats back Dodd by only 58 - 27 percent while Simmons leads 87 - 6 percent among Republicans and 56 - 25 percent among independent voters.

The incumbent's approval is down from 49 - 44 percent March 10.

While we have a long way to go until November 2010, it's fairly startling to see a four-term Democratic incumbent down by 16 points in a deeply blue state. And make no mistake: this is all about Dodd's negatives, rather than anything in particular that former U.S. Rep. Rob Simmons, the declared Republican challenger, is doing. Almost half (47 percent) of Connecticutians have yet to form an opinion about Simmons, and yet, he's leading Dodd among independent voters by better than 2:1, and even picking off 27 percent of Democrats.

It's somewhat likely that this will turn out to be Dodd's low-water mark. The AIG story, for which deservedly or not, Dodd took a lot of lumps, is very fresh in the minds of voters, and the outrage will probably fade some. Even before the AIG bonus story broke, however, Dodd was underperforming, already tied with Simmons in some polls and barely ahead of him in others; the combination of his ties to Countrywide and a presidential campaign that might have seemed pointless to his local constituents was evidently already doing damage. In any event, a seat that would ordinarily be relatively safe for Democrats now appears as likely as not to be picked off by the Republicans.

...Unless, perhaps, their nominee is someone other than Chris Dodd. Dodd has swatted away rumors of retirement (although one wonders whether polling numbers like these could give him second thoughts). But, somewhat as the Republicans seem poised to do in Kentucky with Jim Bunning, the Democrats could also attempt to force Dodd's hand by giving him a primary challenger.

Although wealthy Connecticut is not exactly ground zero for populism -- quite the opposite really -- the ideal challenger would presumably be someone who keeps the financial services industry at arm's-length, which is something easier said than done in the Nutmeg State. Someone like Ned Lamont, for instance, who is extremely wealthy and an heir to the J.P. Morgan fortune, would probably have trouble pivoting against Dodd. The same goes for Jim Himes, a former partner at Goldman Sachs.

On paper, the most compelling alternative is probably Congresswoman Rosa DeLauro, a longtime champion for working class interests. But DeLauro was Dodd's former chief of staff, and it's hard to envision her running against her old boss. Chris Murphy, however, could present a compelling alternative, as could potentially Joe Courtney.

The real question may be whether certain parts of the Democratic nerve center -- and particularly the blogosphere -- might throw their weight behind someone like Murphy. Dodd is quite popular with parts of the left for his vigorous challenge to FISA, and he is relatively liberal on most other issues. Unless the alternative were DeLauro, who is one of the couple dozen most liberal members of the Congress, this would not be a challenge on ideological grounds.

Nevertheless, politics ain't beanbag, and if the Democrats want to have any realistic hopes of picking up a 60-seat majority in 2010, they can't afford to be underdogs in states like Connecticut.

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A Tied Congressional Election Every 400 Years or So

A few years ago I went through a database of twentieth-century congressional elections and found that, in the period 1900-1992, there were 20,597 contested elections, of which 6 were decided by fewer than 10 votes and 49 decided by fewer than 100 votes. Which suggests that we might expect to see an exact tie about once every 400 years. Maybe yesterday's election will be it! I'd estimate the probability as something like one in a couple hundred; probably Nate could come up with something a bit more precise.

P.S. See here for a discussion of the relevance of this to the decision of whether to vote. An objection sometimes arises about this sort of calculation that one vote never makes a difference, because if the election were decided by one vote, there would be a recount anyway. On page 674 of this article, we discuss why this argument is wrong, even for real elections with disputed votes, recounts, and so forth. This can be shown by setting up a more elaborate model that allows for a gray area in vote counting and then demonstrating that the simpler model of decisive votes is a reasonable approximation.

P.P.S. I noticed there were some questions about my calculation, so very quickly: If the margin is within 100 votes, then there are 201 possibilities: Dem wins by 100, Dem wins by 99, . . ., Rep wins by 99, Rep wins by 100. Of these 201 possibilities, only one is a tie. Thus, Pr(tie) approx= (1/201)*Pr(margin within 100 points). Historical data show that elections are within 100 votes approximately 50 times a century, thus (to extrapolate) approx 200 times every 400 years. Thus, based on this simple calculation, you'd expect an exact tie approximately once every 400 years.

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What the NY-20 "Tie" Means

From an analytical standpoint, whether Scott Murphy remains ahead of Jim Tedisco after absentee ballots are counted (and that is anything but a sure thing) is largely immaterial. One of the candidates is going to win by not more than a hundred, maybe a couple hundred votes (and possibly by quite a bit less than that). The difference between winning and losing could be because someone's daughter got an ear infection and they drove her to the doctor instead of going to the polls, or someone happened to turn on their TV five minutes after a Tedisco commercial aired rather than five minutes before. When elections are decided by hundredths of a percentage point, there is a lot of luck involved.

But what does it mean, exactly, for the vote to have been split about evenly in this particular Congressional District?

What this very narrow fragment of evidence suggests -- it may be dangerous to overgeneralize -- is that not much has changed since last November. The PVI of NY-20 based on the 2000 and 2004 elections is R+3; based on the 2004 and 2008 elections, it's more like R+2. That is, NY-20 is between two and three points more Republican than the average Congressional District.

But keep in mind that the average Congressional District, at least in 2006 and 2008, had been highly inclined to vote Democratic. A Republican-leaning district at a Democratic-leaning moment in the political cycle is usually going to translate into being a toss-up -- and indeed, that's exactly what we find if we look at how the two parties performed on November 4th in districts that looked like NY-20:



Of 58 Congressional Districts with PVI's of between R+1 and R+4, the vote was almost an even split; Democrats were elected to the House in 30 of these districts on November 4th, and Republicans in the other 28. So our default expectation is that a district like NY-20 should indeed be a toss-up -- which is exactly what we wound up getting. The contest turned out about the same yesterday as we might have expected it to had it been held on November 4th.

The status quo, in other words, was more or less preserved. But the status quo, of course, is a much happier place if you're a Democrat than if you're a Republican...

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