Polling the Economy
Posted by Possum Comitatus on November 12, 2007
This was me in Crikey the other day.
Back before the interest rate rise, back before the September CPI data was released, one might remember the usual talking heads regaling us with tales of how the RBA decision was extremely important for the government. A decision to keep rates at 6.5%, so the theory went, would benefit the Coalition by reinforcing the credibility of their low interest rate spiel. It was all about ‘economic management’.
Yet after the RBA so inconveniently pulled the trigger, these same talking heads are now regaling us with tales of how the rate rise actually helps the Coalition because it shifts voter focus back to the economy. It’s all about ‘economic management’.
It’s quite the argument – the Coalition was always going to benefit, the only trick is to adjust the mechanism.
Maybe this explains why the government hasn’t won a poll in 18 months; they’ve been listening to these guys.
The key to understanding the way “the economy” seems to be working as an issue in this election is to not to fall into the trap of seeing it as a single holistic thing.
Most punters aren’t economists, the broader notion of the economy is an abstract concept and on this hazy issue the Coalition rates well. There are jobs around, things keep moving forward, government debt is down, the sharemarket hasn’t crashed – it’s the economy.
But this abstract notion is also what gets measured by polling questions like the Newspoll survey on “which leader is best capable of managing the economy“. It’s why the results of these questions have little statistical relationship to vote estimates.
At the interface of the abstract and daily life, the story is vastly different. Interest rate rises reduce the household discretionary spending budget – the budget that funds self-perceived standards of living; the holiday, the recreation, the kids birthday presents etc. It does it simply by increasing mortgage payments (or rents) and reducing the amount households have left over for other things.
Workchoices creates uncertainty for those not affected personally in a negative way by its operation but believe they could be any time soon, and creates resentment and occasionally lower take home pay for those that have felt the rough end of the policy first hand.
You throw rising grocery prices, petrol prices and childcare into the mix and you start to get a broad feel for the different kind of “economy” that people get cheesed off with Howard about, rightly or wrongly.
Many of these folks clearly answer the Newspoll questions on economic management in favour of Howard, to them he is good at looking after the abstract concept. But on the personal economy front their grievance is washed into the large mix of issues that makes up Howards dissatisfaction ratings – and as we’ve seen before, so goes Howards dissatisfaction, so goes the Coalitions two party preferred vote.
So when the talking heads pop up and start spruiking how the focus on the economy will be a benefit for the Coalition – that may well be the case were the focus actually on abstract notions of the economy, but interest rate rises seem to be only barely related to the economy in the punters mind if you look at the polling data and how it relates to the actual vote estimates.
We know that interest rate rises increase the ALP vote, we know that there is no statistical relationship between the Coalition vote and the Newspoll results on the “better economic management” question.
What we don’t know is exactly how the personal economy plays out in its relationship to the major party votes.
To the pollsters, we need a new question on economic management that encapsulates the lived “economy”, that captures the way the economy actually plays out in people’s daily lives and which party the punters believe are best capable of handling the things that make the lived experience.
Until we do get a measure like that, we’ll have to put up with talking heads spouting vast quantities of absolute nonsense over the economic management polling results.
Please pollsters, have mercy on our souls – give us something so we can take that lame horse out the back and shoot it.
Possums Pollytics 
kwoff.com said
Polling the Economy « Possums Pollytics
Back before the interest rate rise, back before the September CPI data was released, one might remember the usual talking heads regaling us with tales of how the RBA decision was extremely important for the government. A decision to keep rates at 6.5%,…
John V K said
The hip pocket nerve. More reflexive than the one beneath the knee cap.
r@tzRUS said
I’ve been waiting for someone (other than possibly Ross Gittins) to make this point. The economy is a mechanism for the production and distribution of resources, not an end in itself. If the resources aren’t going where they are clearly needed, the economy is not working properly, no matter how well it looks in aggregate.
What struck me about the leaders’ debate at the start of the campaign was how Howard was seemingly incapable of talking sensibly about anything other than the aggregate economy. This IMHO is how the Tories have stiffed themselves; they all seem to have the same aggregate fundamentalist view of the economy, and don’t appear to have anyone with the broader perspective on how to make the economy more relevant to the average punter. Instead we’ve had a series of bizarre ad-hoc measures (eg Mersey Hospital).
If they want to be relevant after the coming rout they’ll have to come back to the centre, and with Costello damaged goods that means Turnbull as leader. But do you reckon the NSW Liberal Right will allow that?
Kate Ellis for PM said
Another well reasoned (and common sense) analysis by Poss. To the conservatives economy has always been about numbers as they confuse economy with book keeping. Economy is about enriching social capital where the concept of wealth is intertwined with well being of the society by the provision of basic needs of people. I think Australia had done this well until John Howard came along. Many of us are alienated not because we have less money now than 12 years ago (and the interest rates no longer affect me), but because we live in a society that is increasingly more unequal, greedy and fractured. In a way I agreed with some of Mark Latham’s comments the other day, but first and foremost we need to get rid of the current odious mob before the repairs can begin (it is like taking the rotten old carpet out before putting in the more durable and easy to clean tiles).
Mr Denmore said
Of course, the huge assumption underpinning the ‘who is the best economic manager’ question of the opinion pollsters is that governments “manage” economies.
Howard and Costello for the past decade have managed to get a largely economically illiterate press gallery to swallow the nonsense that because inflation and interest rates have been nominally low, this has been the government’s doing.
In a climate of globally lower inflation, thanks to China and inflation-targetting central banks, this is like the government taking credit for the sun coming up in the morning.
Ross Gittins, in a couple of recent columns in the Smage, has pointed to this misconception, but still the press gallery peddles it.
KeepingALidOnIt said
Perhaps as a question, it should be framed: “Thinking about your personal finances/household budget, who would be better to help you improve your situation – Howard or Rudd?”
It’s finding the neutral words that is hard. “Family finances”? “Financial circumstances”? “Household spending”? Or are they too directional or loaded?
I am reminded of Kim Beazley’s reference to the “kitchen tables of Australia” in his 2001 concession speech (though frankly, noone has a kitchen table anymore!!).