Labor Voters More Confident Following the Demise of Kevin Rudd

The 11.1% surge in consumer confidence between June and July shows a clear partisan divide, with confidence on the part of Coalition voters up 19.8% compared to a more modest 3.9% for ALP voters, but this is still a big surge in confidence among Labor voters for a series that has an historical standard deviation of 5.1%. The ~75-80% probability of a Labor victory being priced in betting and prediction markets suggests that Rudd’s demise has significantly improved Labor’s election prospects.

Meanwhile, Frank Brennan thinks we should give Rudd credit just for showing up to work:

Having resigned as prime minister, Rudd had the good grace to turn up to question time, taking his place on the backbench.

posted on 16 July 2010 by skirchner in Economics, Financial Markets, Opinion Polls, Politics

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Consumer Sentiment Surges on the Demise of Kevin Rudd

Consumer confidence surged 11.1% in July, the ‘strongest monthly increase in the Index from a base above the 100 level since records began in the mid–1970s’ according to Westpac.  The press release is far too polite to point to the most obvious reason for the surge in confidence, but we can all read between the lines:

Interest rates do not appear to have been the most significant driver of the July result. The confidence of those folks with a mortgage actually rose a little less than tenants or others. As we noted last month the 5.7% fall in the Index in June seemed to be partly driven by concerns about the Budget and tax policy.

Consumer sentiment doesn’t have much independent explanatory power for economic activity once you control for other variables, suggesting that causality runs from activity to sentiment and not the other way around. But that’s just the average effect observable to the econometrician. It does not preclude one off exogenous shifts in sentiment having a significant economic impact. Assuming the new Prime Minister can sustain the boost in confidence, dumping Kevin Rudd may prove to be something close to an economic free lunch. I have not yet seen the break-down by voting intention, but my guess is that it argues against the view that dumping Rudd was a negative from the standpoint of Labor voters.

Arthur Sinodinos notes that Kevin Rudd could destabilise a future Gillard cabinet, arguing against his inclusion in a future government.

posted on 15 July 2010 by skirchner in Economics, Financial Markets, Opinion Polls, Politics

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Malcolm Turnbull’s Political Misjudgment

The latest Newspoll putting the Coalition ahead of Labor on a two party-preferred basis for the first time since 2006 is further evidence against Malcolm Turnbull’s claim that opposition to the Rudd-Turnbull ETS would lead the Coalition to electoral oblivion. It is noteworthy that the Coalition now matches Labor on the question of who will ‘best handle the issue of climate change’, having previously trailed Labor on the issue by as much as 27 points. The poll results demonstrate that public opinion on a given issue is not independent of the stance taken by the opposition, a political understanding seemingly lost on Malcolm.

Michael Barone notes that social democrats are in trouble across the Anglo-American world.  He attributes this to their abandonment of the market reformist tradition that previously informed social democratic parties, including Australian Labor. As former federal Labor minister Gary Johns has noted, Rudd has always been outside this market reformist tradition.

posted on 03 May 2010 by skirchner in Opinion Polls, Politics

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Wisdom of Crowds: Fiscal Stimulus Edition

Americans are far from sold on fiscal stimulus:

A CNN/Opinion Research Corporation survey released Monday morning also indicates that 63 percent of the public thinks that projects in the plan were included for purely political reasons and will have no economic benefit, with 36 percent saying those projects will benefit the economy.

Twenty-one percent of people questioned in the poll say nearly all the money in the stimulus has been wasted, with 24 percent feeling that most money has been wasted and an additional 29 percent saying that about half has been wasted. Twenty-one percent say only a little has been wasted and 4 percent think that no stimulus dollars have been wasted.

posted on 26 January 2010 by skirchner in Economics, Fiscal Policy, Opinion Polls

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