Sunday, October 28, 2012

Will Romney lose Ohio, win election?

One of the least appreciated expressions by far too many analysts in far too many contexts is "ceteris paribus".  The expression is generally used in economics, but it's application applies to nearly all areas.  It is translated as 'all other things remaining equal or the same'.  For example, someone might claim that their economic model predicts that a change in interest rates will produce some calculated change in economic growth (all other things remaining unchanged).  Of course, all other things never remain unchanged.

We see a failure to appreciate this important caveat in a lot of current economic analysis.  The Fed, and a number of economists who support quantitative easing, point to models which predict that large increases in the money supply with spur growth.  But the models assume a normal economy with functioning markets, typical regulatory burdens, typical attitudes by business owners toward their future prospects and a lack of fear by said owners that the government is going to destroy their businesses. So -- if ceteris ain't paribus, throw the models out the window.

Political pundits are in full pontification mode as the election looms just days away.  Everyone wants to focus on Ohio.  We hear all kinds of observations about voters in Ohio being a good microcosm of voters in the US, that Ohio is crucial in the electoral college calculations and other assorted reasons involving various historical trends as to why Ohio explains everything.

Just one small problem.  Ohio may not be typical this year.  First, because Ohio was the focus of both campaigns from the beginning, the amount of money spent, the number of visits by both campaigns, and the intensity of the get-out-the-vote effort have and will dwarf any normal election.  Ohio has become an atypical, special case election.   There may be an extraordinarily high percentage of casual voters who make it to the polls.  This tends to favor Democrats.

A lot of polling now seems to point to the likelihood that Romney will carry the national vote.  A lot of states that were once thought to be Obama locks are now viewed as tossups.  If Romney wins the national vote by any kind of significant margin, some of these tossups will likely end up in his column.  Especially if they haven't been subjected to a great deal of spending and attention from either campaign.  They become better barometers of the national mood than Ohio.

So here's a possibility -- what if Ohio goes to Obama in a squeaker because of an extraordinary amount of money and organization focused on the state by the Democrat, but Romney, as the winner of a national wave election wins a number of other tossup states and wins the electoral college by a comfortable margin?

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