Tuesday 30 October 2012

Backdated - US Presidential Election

So, today is tomorrow from the point of view of yesterday's today. And we all know what that means?

We're tired of playing guessing games?

Heck no! It means it is Wednesday! Guessing games are the best part of election predictions. They are also the only part of election predictions. So, here is my US presidential guessing game for 2012. But first:

What happened in Vanuatu?

No-one knows. Yet.

Remember that this is a small nation, which needs to take care to ensure free and democratic elections. Quite rightly, the counting process is conducted in a careful manner with checks and balances along the way. Also, with just under 200,000 registered voters, this is a much bigger election than previously, and their may be some stressing out going on among the vote counters.

ABC radio is, however, releasing the results as they come*, and so far it looks like there's going to be a shake up. The only available early results are Torres and Banks, both exhibiting a change in members.

As predicted, the new Land and Justice Party is doing well. In the capital, at least. So is former PM Edward Natapei.

U-S-A, U-S-A, U-S-A.

Now to the United States of America, land of many, many things not worth discussing here. Firstly, why do we care?

Why do we care?

Well, I enjoy electoral predictions, but this election will probably affect all of us, and here's how. Currently, the Australian Dollar is high. This is great if you want to buy things from overseas or go on holiday. Unfortunately, there is not much profit to be made in spending money or travel.

Now, broadly speaking, the economy is divided into four parts, or sectors: primary (raw resources like mining, logging etc.), secondary (manufacture and retail), tertiary (services) and quaternary (finance, investment, research, education and anything else information based). There is a fifth, sometimes argued sector, the quinary sector (medicine) which is normally treated as part of the tertiary sector.

With the high Australian Dollar, retail is suffering as more people shop online for cheaper (foreign) items. This flows back to the manufacturers, in extreme cases crippling the secondary sector. This also occurs, to a lesser extent, in the tertiary sector where overseas services are a viable alternative (famously, call-centres). The impact to the primary sector has been bouncing around the media lately, but in case you have been living under a non-mining-related-rock, basically it's the reverse of the cheaper-overseas phenomena, where Australian resources are (relatively) more expensive and consumers buy elsewhere. If we now cost 10% more, but lose half our buyers, we are making 55% what we were before. So the primary, secondary and tertiary sectors are all affected. Anyone in the quaternary sector payed from our taxes (e.g. teachers) may also feel the pinch as taxable income decreases. But fortunately the private quaternary sector long ago learnt to deal with bear markets (see: short selling and all the other dirty tricks used by the investment and financial industries to profit in a economic downturn, such that people central to the economy have no interest in whether it succeeds or not). So if you are an investment banker, you'll be fine. You can also unfriend me now. (Just joking. I never befriend investment bankers.)

Now, I said the AUD$ was high. Really, its more a case of other currencies being low. It was a week of “Yay, we survived the GFC!” followed by years of “Aww poo! No-one can afford our goods and services!” (again, see sup-prime mortgages and other dirty tricks as per above). The Euro problems are famous, with everyone using the current currency (heh heh, “current currency”) and having their stronger economies (e.g. Germany) suffering for the errors of weaker economies (e.g. Greece). America's problems are less reported these days, but more insidious. If country A wants to buy goods from country B (assuming they don't share a currency, Euro nations), do they pay in A-wanese dollars or B-tian rubbles? Actually, it's a fair bet they use USD$. Case in point: every nation who buys Australian mineral exports. So, with USD$ around parity for AUD$, our goods are costing more AUD$/tonne than before. So even if our customers weathered the GFC like us (e.g. China) we look more expensive, and probably are more expensive than some other nations.

That's right. Australian goods may not cost Chinese buyers any more than they did, but it looks like they do because of America, who has zero real input in the transaction.

Now, basically, left wing parties tend to be good at improving living conditions, and thus long-term economic stability. Right wing parties tend to be good at restoring economies in the short term and keeping them in surplus. I could rant here about how the economy is only a means to an end, and there's no point having a surplus for an “emergency” if you get it by cutting vital services and creating an emergency, but that would be getting way of point. Basically, Romney will be one step towards a speedy recovery for Australia, and Obama will minimise (though far from eliminate) the dangers of future repetition of the cycle. Which you favour depends on your own political bias, but the result will probably be a major factor in shaping the economic future of Australia.

So, Romney vs Obama.

We are all familiar with the campaign. We know Obama was hammered in debate 1 and recovered in the following debates. We know Romney made some gaffes and may or may not have been joking about opening windows on planes. We know the polls indicate a very close race.

How am I going to pick a favourite?

Many of the US polls overlook one factor that I think may be the decider. A factor not present in Australian voting. Non-compulsorary attendance. Sure, half the public, when asked, will vote for Obama, and half will vote for Romney. But in reality, tens-, even hundreds-of-thousands won't vote at all. Especially if it's raining. I hear there are some pretty bad storms around at the moment**. Sandy will be punishing Delaware, Florida, Maryland, New England (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont ), New Jersey, New York (State)(also, New York City), North Carolina, Pensylvania Virginia and Washington D.C., with possible floods in the Midwest. These are mostly traditional Democrat states, which could be costly for Obama. The two main Republican states on the East Coast (Georgia and South Carolina) appear to be sheltered by the curve of the coast.

Fortunately, many of these people could have applied for postal-voting, allowing them to vote in advance. The majority of pre-voters are republican, though, so this doesn't help Obama.

What may help Obama is the rest of the country. This constant 50-50 polling means all devoted voters (heh heh, “devoted voters”, I crack myself up) will be sure to turn out. And, frankly, I don't think people are that devoted to Romney. His main platform is “I'm not Obama” and while that may appeal to many people, he hasn't really given the public anything to grab onto as a policy. “I will cut the spending to curb our massive debt” is, of course, a decent starting point, but as far as where the money will come from you need more than “f***ed if I know”. Of course, Romney probably does know where he'll cut the money from, he just won't say.

Obama, however, has many ardent supporters. I predict, therefore, a win for Obama, but with some heavy swings to the Republican, especially in the East.

But wait, there's more:

Presidential elections are about more than electing presidents. More to follow!

*http://www.radioaustralia.net.au/international/2012-10-31/vanuatu-election-early-results-trickle-in/1038768
**http://en.wikipedia.org/wiki/Hurricane_Sandy

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