The US Presidential Election: David Herdson’s guide to analysis
Ten tips for successful prediction
The US presidential election is the biggest single political betting event, which is excellent news for serious analysts and players because it probably means that there’s a lot of amateur, uninformed money to be matched against. Not every election will produce a 50/1 winner but there’s nearly always value to be found for the astute. How? Here are some tips:
1. Follow US media: America is a different country
Deceptively so. Some surface similarities mask two countries divided by a great deal more than a common language. Cultural and political values differ significantly, especially once away from the more popular tourist destinations. To the extent that Britain’s media does cover the election, it invariably does it through British eyes and with British attitudes which can be hugely misleading in setting expectations. The only real option is to tune in to what US outlets are saying (at which point, the usual rules apply: don’t be too reliant on any single source etc.).
2. Each state race is different
The first contests are the Iowa caucuses in early February, where interested voters turn out in the middle of winter in one of the coldest (and overwhelmingly white) states to discuss potential candidates. That takes a degree of participation some way beyond that in a primary, which helps the candidates with the dedicated support rather than those with a broad but shallow base. And from there, each state race is subtly different, whether it be the local political culture, the demographics, the voting entitlement (is it a closed or open primary, for example), the delegate apportionment (proportional or winner-take-all). Each aspect affects the outcome. Again, do your research as to who should naturally benefit, who is visiting and who is spending money.
3. Take notice of the polls but be sceptical
Following on from that, polling is – as we know here – an imprecise art. The British pollsters couldn’t get the last general election right and they had years to prepare for it. American pollsters essentially have 100 primaries / caucuses to poll (one per state per party), each with different factors as already mentioned and with no meaningful track record given that each presidential race is so different. 2016, like 2008 but unlike 2012, is an open race for both parties but the dynamics are likely to be so different as to render that precedent to be of little use. In 2008, McCain effectively wrapped up the GOP nomination within a month whereas Obama and Hillary slugged it out almost to the convention. Modelling likely turnout, supporter motivation, general support and all the other weightings pollsters need is incredibly difficult. The polls are the best information we have but they’re very far from infallible. Don’t be afraid to go against them (and, consequently, against the market), if your gut instinct backed up by good anecdotal information points elsewhere. And of course, some polling firms are better than others.
4. Money matters – keep a keen eye on who has it
Political campaigning is incredibly expensive in the States. The 2012 race cost at least $2bn and quite probably a lot more (the precise amount depends on what’s included). If you don’t have money, you’re out of the race. Money also gravitates to those expected to win, reinforcing the cycles of success and defeat.
5. The intricacies of the rules are important but victories are more so
Winning the nominations depends on delegates and delegates are not always awarded on the results of the votes on the day. A campaign which is effective at working state conventions and the like can quietly boost their total. However, it can only do so so far. The great bulk of delegates will be determined based on votes cast by the public, particularly once we get to the winner-take-all states.
6. Don’t get wrapped up in the West Wing
Political dramas featuring presidential elections invariably end up at the convention with the nomination in the balance. In real life, that doesn’t happen. 2008 was the closest anyone’s come since the 1970s and even there, though Hillary technically pushed it to the floor, superdelegate endorsements meant Obama had the nomination pocketed several weeks before the convention met. And that was the exception.
7. The General Election is actually 51 elections
The United States is not France. The Founding Fathers for various reasons did not provide for a direct election. Consequently, although it’s a single national office being elected, the election itself bears more similarity to a parliamentary one, where it’s the key swing states that matter. As always in such cases, take only passing notice of the national vote shares; keep a track of the state projections (it helps that a lot of state-level polling is conducted).
8. Know your history and know when it’s relevant
Precedent is always a good guide, except when it’s misleading. The art of analysis is knowing when to rely on it and when it’s leading astray. For example, candidates can blow their elections in a single moment, and sometimes do. One seriously out-of-touch comment can be fatal, in both primaries and the general election. Be prepared to call it should it happen. However, while the best opportunity for electoral suicide remains the debates, candidates are now so well drilled in them that invariably they pass uneventfully.
9. Watch for who is registering
This could be key for 2016. Listening to British media, you’d think that Obama won two spectacular victories. He didn’t. Comfortable, yes; spectacular, no. His margin of victory in the popular vote in 2012 was less than 4% (though to reinforce a point above, he could have suffered a uniform swing slightly above that and retained the White House; the key state turned out to be Colorado, which he won by 5.4%). We also know that Obama motivated a lot of new voters, particularly black voters, to register and turn out in 2008, and that carried over into 2012. Can Hillary – or whoever is to carry the Democratic torch – engage them to do so again?
10. Keep an eye on minor party candidates (or specifically, for one)
I wouldn’t usually say this. Independents and also-rans usually make no difference. Nader for the Greens did in 2000, snatching victory from the most environmentally-conscious major-party candidate in history and handing it to Bush and Cheney but his was the exception, a consequence of an unnaturally close contest. Perot, with a much larger vote probably did not cost Bush-41 the 1992 election, never mind Dole in 1996. Anderson did not hurt Reagan (enough) in 1980 and Nixon would have won without Wallace in 1968. Why am I ambivalent this time? Because Trump has the potential to go rogue. If he loses the nomination, he has the money to mount a serious bid, the ego to go through with it and a campaign team already in place to make a real impact. Unlike Perot, Trump would take votes directly off Rubio, Bush the third or whoever ends up in front and that would hand the election to the Democrats. If it happens, it will happen quickly but there will still be straws in the wind to look out for. Do so.
These are not infallible rules. Indeed, they’re not rules at all: they’re a guide intended to help when applied to good judgement. Hopefully they’ll prove of some utility in what is, in many ways, the most fascinating election race in the world.