Tag Archives: bain

Are Voters Rational? Bain, Three-Legged Jackasses, and Viewer Mail

Another day, another poll indicating that the devastating Bain attack ad and the “go for the jugular” targeting of Romney’s tax returns  are, as yet, still not resonating nationally with likely voters. According to a USA Today/Gallup poll in the field from last Thursday through Sunday,  “by more than 2-1, 63%-29%, those surveyed say Romney’s background in business, including his tenure at the private equity firm Bain Capital, would cause him to make good decisions, not bad ones, in dealing with the nation’s economic problems over the next four years.”  The persistent polling results belie the oft-tweeted claim that the Obama ad campaign has “swift boated” Romney by turning his supposed strength into a weakness, much as the Bush campaign allegedly did to John Kerry’s Vietnam record in 2004.   It may be, however, that the ad campaign is resonating more strongly in specific swing states, like Ohio where Obama has been outspending Romney so far. Even here, however, the evidence is far from conclusive; the Pollster.com trend line for Ohio polls has Romney trailing Obama by 2.5%, 47.2%-44.7%.  On June 5th, just before the Bain attacks, Obama led Romney there by 3.3%.

In light of the evident failure of the Bain attacks to register so far, several readers have posted comments inquiring about the relative impact of “campaign effects” and election “fundamentals” more generally.  In that vein, Will asks, “So what, if anything, SHOULD I pay attention to that doesn’t have to do with the economy? If all that matters is the economy, a force which remains outside the control of either presidential candidate, would you say campaigns themselves are essentially useless?”

Let me be clear.  When it comes to influencing the presidential vote, campaigns are not “useless”.  In fact they do matter – but not in the way that journalists and partisan pundits often assume.   To begin, they are important for rallying the base and getting out the vote more generally.  One way they do this is by framing real world events in a way that appeals to their partisans – “Romney’s vulture capitalism contributed to the financial collapse” – but which also might convince independents to vote for a particular candidate.  Now, these sound like very important effects, just as many reporters would have us believe.  Indeed, as a counterfactual, let us imagine a world, as Carlisle Rainey contemplates, in which only one side bothers campaigning.  What, as JTTX asks me in a twitter comment, would our forecast models say about the relative impact of campaigns then?  The answer, I think, is that the side doing the campaigning would have an advantage (although perhaps not as large as one might think!)

But I don’t believe that counterfactual  is the correct way to think about campaign effects and, like John Sides, I  don’t think most reporters think this either.  The reality is that most journalists are interested in the net impact of campaigns in the real world, not a hypothetical one. However, because they cover campaigns on a daily basis, they tend to think those effects are quite large.  Most political scientists disagree.  They believe that in the world in which we live, campaign effects, such as the Bain ad or Romney’s tax returns, are much more limited for at least three reasons.

First, of course, both sides are struggling to frame the election in ways most favorable to their candidate.   So voters aren’t just hearing about Bain – they are hearing about unemployment on Obama’s watch as well.  There are dueling messages out there that voters hear and respond to.

Second, by the time campaigns are in full swing, most voters have already made up their minds based on longstanding predispositions guided by, for instance, an affinity to one party or the other.  Current polling suggests that up to 90% of voters are already committed to either Romney or Obama.  Many of the remaining undecideds are, at this point, not paying much attention to the campaign at all.  Given this, it’s no wonder Bain hasn’t moved the polls.

Third – and I can’t emphasize this enough – reality in the form of those “fundamentals” is the grist for candidates’ campaign mills.  Why is Obama targeting Romney’s record at Bain rather than, say, his foreign policy comments?  Why is Romney touting his business credentials?  It’s because the fundamental issue driving this race is the economy.   You can’t simply substitute a “virtual reality” through the skilled use of clever campaign visuals when voters have independent sources of information by which to assess what the ads are saying.

This brings me to Avery’s query. In taking issue with my notion of “collective rationality”, he notes:  “It was interesting to me that one of the key assumptions of the model you were propounding is that people sort of “fact check” political ads against reality. Given what I know about people, and what I’ve been learning in reading about behavioral econ and political psychology, it seems like people are often pretty bad at fact checking and very good at cherry-picking, especially when it comes to things they already have a well-formed opinion on like “Democrats are better than Republicans” or vice versa.”  Avery goes on to suggest that in a world populated by people exhibiting these cognitive tendencies, “collective rationality” is a misnomer.  Instead we should see the cognitive blind leading the cognitive blind. (Think Rush’s “ditto heads”, or Kos’ “Kossacks”.)

Avery is right, of course, in that individuals’ typical cognitive processes often cause them to engage in selective exposure to campaign ads in a way designed to reinforce existing attitudes.  (As evidence, see almost any partisan blog!)  That doesn’t sound like the world I describe consisting of rational voters who objectively sift through the campaign ads to choose the “best” candidate.

But I am making a less heroic assumption regarding voters’ rationality.  By collective rationality, all I ask is that most voters can distinguish one candidate from the other ideologically, and choose the one closest to their own political views.  And most studies suggest voters are very good at doing this, particularly in an information-rich environment that is a presidential campaign.  So, Joe Sixpack may not understand the intricacies of off-shore tax shelters, and he may stubbornly insist that Obama is not a U.S. citizen, despite overwhelming evidence to the contrary.  But generally speaking, he knows that Obama is a stronger supporter of an activist government, greater business regulation and higher taxes on the wealthy than is Romney.  He knows this from talking with others on Facebook (ok, that would be Joe Brandy Snifter), hanging out at the ball field and maybe even glancing at the evening news – that’s where the “collective” process comes in.   And in deciding how to cast his vote, after absorbing this information, Joe Sixpack chooses – in the context of an economic downturn – which set of views is closest to his.   I  think most voters do this quite well.

The reason why the best forecast models are so accurate is that they essentially distill this process down into a few key variables that measure “reality” – the state of the economy, perhaps presidential approval, whether the nation is at war – and assume the rest of it – the campaign ads, etc. – play off this reality.  Now, as Stuart correctly notes (and as I have said many times before), when reality does not clearly differentiate one candidate from the other, any of these other factors – debates, the V.P. choice, – even the Bain ad! – can conceivably make a difference.   Journalists, who must file a story every day, have to focus on something, and so they emphasize this aspect of the horse race, as viewed through the daily prism of campaign stops, messaging, gaffes, etc.   But if you insist on accepting the horse race metaphor, then at least realize this:  the candidates aren’t always riding equally talented horses.  Sometimes one candidate starts on Secretariat, while the other is riding a three-legged jackass.

Even then, however, it is possible something dramatic might happen.  That’s why we run the race!

[youtube  /watch?v=XWkL2gcXNuY&feature=player_detailpage]

Meanwhile, keep  those comments coming!

A Turning Point In The Election?

The reaction – or lack thereof – among voters to the Bain controversy once again illustrates an important distinction between how partisan pundits (you know to whom I’m referring) and political scientists analyze what drives election results.  As the controversy over when and to what degree Romney severed his connection with Bain dominated the news, Romney’s partisan critics were convinced that the story would negatively impact Mitt’s electoral support.  The Daily Dish’s Andrew Sullivan, tweeting the link to his longer analysis, wondered: “The GOP’s current candidate is an obvious perjurer and thereby a felon. How long will it take before this sinks in?”  Jonathan Cohn, citing the Obama campaign’s “devastating ad” [based on the Bain controversy], concluded that “substantively speaking, this controversy is largely telling us something we already knew: That Romney helped develop and then employed business practices that generated large profits for investors, made companies more efficient, and frequently led to layoffs.”  TPM’s Josh Marshall confidently opined “We can spin these out forever. But beyond all the specific accusations, they’re painting a picture that makes Romney look ridiculous, like a joke. They’re making Romney look stupid and powerless on the front where he believes he’s one of the standouts of his generation. And that’s plain lethal for a presidential candidate. But how does it come into play? Simple. Mitt Romney has two claims on the presidency: successful governor of major state and captain of industry. He’s largely written off the first by disavowing a genuine and perhaps far-reaching accomplishment: health care reform. Which leaves him with Bain Capital.”

Regular readers of these partisan blogs could be excused for expecting that the fallout from Bain would have a significant effect on Romney’s standing in the polls. (I trust I need not give you a Kevin Drum quote?) And, in fact, polls indicate the Bain controversy had some negative impact on whether voters viewed Romney’s business record as a reason to vote for him. But while Romney’s critics were touting this finding, they were generally ignoring the bigger polling picture, which is that the Bain controversy did not seem to affect the candidates’ relative standing in the national polls at all, much as I suspected it wouldn’t. Indeed – and I wouldn’t make too much of  this given the rampant polling fluctuations to date – the Real Clear Politics aggregate poll suggests that Mitt may have gained ground during the time of the Bain/income tax debate.

The fact that potential voters could change their attitude toward the relative worth of Mitt’s business experience, but not whether they are likely to vote for him drives home a point I’ve made repeatedly, but one which partisan pundits overlook: this election will be largely a referendum on President Obama’s handling of the economy. For most undecided voters, the choice whether to vote for Romney will turn less on his Bain record, or how far back he goes in releasing tax forms, and more on Obama’s economic record.

In that vein, the topic of this Wall St. Journal story is likely to have a bigger impact on the November election than are any of Mitt’s tax documents.  Less than a week before the first estimate of second quarter GDP growth figures are released this Friday, a survey of economists indicates that they believe the numbers will show worse growth – close to 1.2% – than the 1.9% in the previous quarter, and the slowest rate of growth since the first quarter of 2011.

As I’ve discussed previously,  GDP growth is an important variable in many of the economy-driven econometric presidential forecast models (see here and here and here).  If these GDP numbers hold in the less-than-1.5% growth range, most of those models suggest Obama will get less than a 50% share of the two-party vote come November, although how much less varies by model – and by what the third quarter GDP number – and the final number before the election – shows. Of course these models are not foolproof, and there is always the chance that the election will turn on some idiosyncratic factor that may prove determinative.  Karl Rove has always insisted that the last minute release of court papers documenting George W. Bush’s DUI arrest on the eve of the 2000 presidential election cost Bush close to 2% of the popular vote through a combination of reduced turnout and the loss of some independents to Gore, as well four states in the Electoral College. Had the arrest not been publicized, he argues, Florida would not have mattered.  Whether Rove is correct or not, I have said repeatedly that in a close election there is room for an “October surprise” to make a difference.

But it is far more likely, I think, that the outcome will turn on perceptions regarding the state of the economy, as measured by GDP growth, among other factors.  Which makes Friday’s release of the first estimate of the second quarter GDP figure potentially far more important than Mitt’s tax returns. And if that number suggests growth is slowing, and the third quarter GDP number that will come out in October shows even slower growth, the President may have to pin his reelection hopes on an October surprise – and a very big one, at that.  This is not, of course, what partisan pundits will have you believe.  But it is what the historical record suggests to be true.

4:10 P.M.  Consistent with some of my earlier posts, Rasmussen finds that among undecided voters, only 13% are paying attention to the campaign – another reason why  Bain and the tax documents simply aren’t having the impact partisan pundits had predicted.

So, About That Bain Controversy…Surprise! (Not)

The results of the latest CBS/NY Times poll (hat tip to Lucia for bringing this to my attention), which was in the field July 11-16 during the heart of the Bain controversy, has attracted more than its fair share of attention primarily because it has Mitt Romney holding a slim 2 point lead over Barack Obama, 45%-43%. (If you throw in leaners Romney is up 47%-46%). This is the first time Romney has “led” in a CBS/Times poll since January when he was still locked in a fight for the Republican nomination. Whenever the relative positions of the two candidates appear to change, it gets the pundits’ attention.   In truth, however, given the poll’s margin of error, the survey is showing what just about every survey of the race taken this year has shown, which is that the two candidates are essentially deadlocked.

However, this may not be what you expected if you were closely following the pronouncements from the punditocracy during the last two weeks. Despite my warning that the Bain controversy would likely have little impact on the race, the Kevin Drums and Rush Limbaughs of the pundits’ world were engaged in hand-to-hand combat in an effort frame Bain most favorably for their preferred candidate – which, of course, is one reason why I didn’t think Bain would have much impact.

The bigger reason, however, is that most voters have already made up their mind regarding who they will support, and those that haven’t aren’t really paying close attention to Bain. According to the Times survey, 38% of those surveyed are paying “some” attention to the race, while another 14% are paying “not much” and 3% “none”.   At the risk of provoking another Kevin Drum seizure, this is exactly the point I was making in my (edited) comment to Jamelle Bouie, when I noted that most of the roughly 30% of voters yet to make up their mind aren’t paying close attention to the presidential race, including specific campaign ads, at all.  (For the record, the Times survey indicates 79% of voters have made up their minds – even higher than I estimated.)

You are going to hear this from me again and again in the next several weeks, so let me apologize in advance.  The media’s fixation on the horse-race aspect of the race means they are going to exaggerate the importance of relatively trivial events, like the Romney tax returns (don’t we have a debate over releasing tax returns every four years?) because pundits and journalists that quote them are in a narrative-driven business cued to daily and even hourly deadlines.  Journalists have to file a story or more every day, and they depend on quotes and “analysis” from pundits who feed them their talking points.  If you are a political junkie, however, as are many of my readers, it is easy to get sucked into this daily narrative and lose sight of what really moves voters.  After you’ve seen the 39th analysis of why Romney isn’t releasing his tax returns, it’s easy to think this must be an important issue to most voters.  After all, Drum can’t be wrong, can he?  (Ok, it’s a rhetorical question.)

But outside the pundits’ echo chamber it’s not a very important issue – at least not to Joe and Jane Sixpack.  Instead, they’ve got deeper concerns – concerns that will determine how they vote come November.  And the number one concern is the economy.   June’s unemployment numbers, as you know, were disappointing, with only about 80,000 jobs created and the official unemployment rate still hovering above 8%. The real unemployment number is actually worse, however; if we include those who have simply stopped looking for work, the rate is probably closer to 15%.  Meanwhile, the second quarter GDP numbers are likely to show anemic growth as well, even as the first-quarter number is adjusted slightly downward.   In short, the economic news of late has not been good.

And this is where the CBS/Times survey is more revealing.   To begin, for most voters, this fall’s election is going to be primarily a referendum on Obama – not on Romney.  Only 29% of Romney supporters look on him with a “strongly favorable” attitude – but 37% support him because they “dislike” Obama.  The corresponding numbers of Obama supporters are 41% “strongly favorable” and only 23% “dislike” Romney.  This is why Bain and the tax issue aren’t gaining as much polling traction nationwide as the pundits anticipated.  According to the Times’ survey, Romney’s favorability rating, which was at 29% in April, actually went up 3% during the Bain controversy.

Obama, on the other, saw his favorability/unfavorability ratio drop significantly – largely because of continued pessimism over the economy.   By a margin of 55%-39%, more respondents “disapprove” than “approve” of Obama’s handling of the economy.  Almost 40% of respondents rate the economy as “bad” – 32% say it is “very bad”.   Only 24% of respondents think the economy is getting better – with 30% saying it is getting worse.  These trends matter because 93% of voters say that the economy is “extremely” (54%) or “very” (39%) important in determining how they will vote this fall.

But here’s the kicker, and why Obama is so vulnerable.  Fully 51% of those surveyed believe the condition of the national economy “is something the president can do a lot about”!  That’s up 10% from last September!  That is, as the economic downturn persists, people increasingly believe the President can do something about it.   Why do people hold to this belief?  Because those running for president claim that they can turn the economy around – Barack Obama said so in 2008, and Mitt Romney is making the same claim now.  Once in office, of course, no President is going to announce that he was fooling everyone, and that in fact the economy is driven by factors largely out of his control!   And so Obama is stuck facing unrealistic expectations partly fueled by his own campaign promises.

At this point, it is evident that the economy is not going to turn around quickly enough and to the degree necessary to insure Obama’s reelection.  Hence his effort to try to link Romney, by portraying him as a “vulture capitalist”, to the policies that contributed to the current economic malaise.   In truth, the President has very little choice in the matter, given the few cards he has to play.   By a margin of 49%-41%, more voters believe Romney will do a better job than Obama in handling the economy.  If he is to win reelection, Obama has to persuade enough voters that this is not true.   But he is facing an uphill climb; 64% of respondents think Obama holds “a lot” (34%) or “some” (30%) of the responsibility for the current state of the economy.  Although Obama supporters point out that those same respondents hold George W. Bush more responsible for the current economic woes, Bush isn’t on the ballot come November – Obama is.

Until then, we have almost four months of punditry to go. So, sit back and enjoy the daily food fight as the pundits debate Mitt’s tax returns and what Obama meant when he said, “If you’ve got a business — you didn’t build that” and whatever other story dominates the latest news cycle.  Just remember – most of these debates are about peripheral issues that aren’t likely to have any lasting impact.  Distilled to its essence, November’s election will largely be a referendum on Obama’s handling of the economy. That means the next big campaign event is likely to take place on July 27th, when the first estimate of the second quarter GDP will be released.  In the interim, cue the pundits!

Beating the Drum On Bain

Kevin Drum, who writes for the left-leaning Mother Jones, had a testy response to the edited version of my comments published in the American Prospect today.  Normally I don’t pay much attention to partisan blogs, but Drum’s post has so many inaccuracies that it presents a real teaching moment.  Even Drum might learn something.  (Ok, I’m joking there.)

First, in Drum’s defense, he’s responding to the edited version of the comments I sent to Jamelle Bouie late last night that were published today in Bouie’s blog post at the American Prospect.   As I noted in my earlier post today, readers of Bouie’s article may come away with a slightly misleading impression of what I said to him in those comments.  That appears to be the case with Drum – he is responding to the excerpts Bouie published, and not my full post here. Still, it is worth quoting him in full if for no other reason to illustrate how partisan pundits think.  After quoting my excerpt in Bouie’s piece, Drum explodes (in an article titled “Today’s Adventures in Pseudo Profundity”!):  “Why do people say stuff like this? Of course the electorate is highly polarized. Of course 70% of voters have already made up their minds. So what? Campaign ads aren’t aimed at these people. They’re aimed at the small segment of the population that’s persuadable, just like every advertisement for every product in history. That’s not even Political Science 101. It’s more like junior high school level stuff.

Please, let’s all stop spouting this nonsense as if it were something profound. It’s not. All mass advertising is mostly wasted because the vast majority of the audience has no interest in the product for one reason or another. But some of the audience does. That’s the target. The fact that the target is far, far less than 100% of the viewers is news to no one.”

Let’s start with the most obvious error, and go from there.  First, despite Drum’s assertion, it is NOT obvious that the electorate is highly polarized.  In fact, all the evidence suggests just the opposite – the electorate is not highly polarized at all.  I’ve covered the data on this before, so I trust I need not go into it again. The idea that Americans are deeply divided, of course, is a recurring meme from partisan bloggers, so Drum’s mistake puts him in good company. But it’s a mistake nonetheless.   The truth is that most Americans do not share Drum’s extreme partisan leanings – or that of those occupying the extreme right wing either.

Second, Drum would have us believe that the 30% or so of voters yet to make up their minds are “persuadable” via, presumably, campaign ads such as the ones the Obama campaign are running about Bain. (Note that contrary to Drum’s impression, my comments to Bouie re: the 70% referred to the impact of Bain as an issue, broadly defined, not to a specific campaign ad, but never mind.) Alas, there’s not much evidence that this is true either. While a small proportion of voters may be genuinely undecided, most of the remaining 30%  lean in one partisan direction or the other and that lean will likely determine how they vote – and how they react to the Bain controversy (if they bother to pay attention to it this early in the campaign).  And for those who are truly persuadable, it’s almost certainly the case that the state of the economy, as captured in broad-gauged measures such as unemployment and GDP growth, will be more influential than the debate over Mitt’s tenure at Bain.

Third, Drum overstates the impact of any single campaign advertisement. The reality is that the impact of campaign ads is rather short-lived, and that in the high-information environment characteristic of presidential campaigns, when voters will be saturated with advertisements from both sides, no single advertisement is likely to carry the day. The impact of the Bain controversy will almost certainly be drowned out by the barrage of events and related campaign advertising to come.

My point here is not to disparage Drum’s partisan leanings.  He clearly thinks electing Mitt would be bad for the country, and he could be right.  But that’s no excuse for exaggerating the likely influence of the Bain controversy, or for simply misstating some pretty fundamental political facts. Let me be clear. I’m sympathetic to Drum’s plight – the guy he wants to win is facing stiff headwinds in the form of a stubbornly weak economy. Given this weak fundamental, it’s clear that Drum wants – desperately wants – to believe that the Bain controversy is going to be a turning point in this campaign. But if wishes were horses, beggars would ride. Alas, the historical evidence suggests this isn’t likely to be the case no matter how much Drum and his fellow partisans cite each other as evidence that the Bain controversy is, in fact, a turning point. It just isn’t.

Sorry, Kevin. Bain’s not going to swing this election to Obama.  But let’s focus on the positive: you are ready for junior high!