Wednesday, August 15, 2012

White Swan Events: What Do We Know Is Coming?

A black-swan event* is some major unexpected event that has a substantial impact on the election (or market, etc.). During the 2008 election there were two major events that were in play: the first was the invasion of Georgia and the second was the financial meltdown and Lehman Brothers collapse.

Right now Team Romney is looking for a game-changer. Although only down a percent or two in the polls, he is losing the swing-states. When we look at we see, today, Obama clocking in at a winning 275 EV if he only wins his "Strong" and "Leans."
Wisconsin Is That One Right Down The Middle. Are You Listening Ryan!?
Keep in mind that he also has a 50-50 chance (or slightly better) to win a yellow state (according to this) so that could improve his odds further.

That all sounds bad for Romney--But--

Things Could Change
Trends tend to change. Here are a few things to keep in mind when looking at this:

1. It's important to note that not EVERYONE matches's analysis. NPR puts far more in the toss-up column, for example (Obama 237, Romney 206).
Still Handing Over PA, Though ...
2. There will necessarily be new economic developments, foreign policy developments, and so on. I want to note though, that I would not count on those to change the race. No less conservative voice than Victor Davis Hanson has noted that the economy sucks, will continue to suck, and will suck on election day--but Obama is not suffering for it (at least not the way past presidents did):
What could change the pulse of the election in the next three months? Strangely enough, it may not be the economy, which is now boringly predictable: flat and not likely either to rebound or to plunge much further before the November election. The new normal is 42 consecutive months of 8 percent–plus unemployment.
He thinks maybe a middle east war could make Obama look like a foreign policy idiot--but are the odds of that all that high?
[W]eighing against an attack is the fact that there is a lack of support for such a move from three influential groups. First is the Israeli public, whichopposes a unilateral Israeli strike by 46% to 32%, and which has increasingly rated Netanyahu's job performance as unsatisfactory over the past three months as he has ratcheted the war talk back up.
In any event, neither of these would really be a "black swan" since we are all looking for them (and 6-dollar-per-gallon gas prices haven't panned out either).

So let's focus on what we know is going to happen.

What WILL Happen
There are five events that we know will happen that will influence polling: The two conventions and the three debates. Let's look.

The Conventions
The conventions usually produce a "convention bounce." The Republicans aren't just "counting" on one--they're planning for it:
Incumbent presidents get seven-point bump from convention
Challengers get 11-point bump from convention

So they expect to be at +4 by the end of the convention since they are the challenger. Is this true? While the historical answer is "maybe" the facts are that it really depends on the convention and the circumstances. While everyone has pounced on Ryan as 'not producing a solid VP bounce' the fact remains that he's a charismatic even inspiring candidate. His exposure at the convention will be bigger than anything he's gotten so far. That can't hurt.

Note, however, that the math (FiveThirtyEight) suggests that the amount of bounce conventions produce is based on how volatile the polls were previously. In this case? Glass-flat, really.

The Debates
The debates, on the other hand, are far more of a snooze-fest. Gallup (from 2008) writes:
In two election years, the presidential debates may have had a meaningful impact on the structure of the presidential races; in most others, they probably have not. The debates were less likely to be catalyst events in years when one candidate was a strong front-runner, including 1984, 1988, and 1996. However, in highly competitive election years, any movement in voter preferences can be race altering, and the debates seem to have the potential to produce such movement. The probable examples of this are 1960 and 2000.
So the question is: is this one of those years where debates are gonna matter? The American Thinker holds that if the debates do change anyone's mind it's likely to be in favor of Romney:
If the debates swing voters, almost certainly those votes will move to Romney, for several different reasons. As Herman Cain recently noted, Romney is much more experienced that Obama. Romney has participated in more televised political debates over a longer period of time, through a wider spectrum of races, than Obama. Romney's life experiences are broader than the leftist academic and Chicago machine politics of Obama. Romney, viewed fairly by conservatives who did not want him as their nominee, should be a much more effective debater against Obama than McCain was in 2008.
What Do I Think?
I think for a debate to make a difference there has to be some significant narrative that the debate plays into. Despite what the American Thinker article says, Obama did not have or need a teleprompter during the McCain debates (nor in his meeting with Congress where he "debated them") and whether you think he won or not he did not self destruct. Conversely, it was not Romney who pounced like a leopard on the media--it was Gingrich. Certainly Romney can play that card--but it is not his shown strength.

I think that, similarly, the conventions are going to be more of a known quality and unless Obama announces Hillary as the VP, I don't see much room for a real surprise. Both teams will do their best to make themselves look good and will do it well--but I think there is a possibility for a Ryan breakaway there. Consider the TwinDex for Swing States

That Romney "updraft" is on the day he announced Ryan. In the swing states (what this graph shows), Romney is above Obama. In the national TwinDex, it's the other way around. Granted: this measures something more like "excitement" rather than "actual votes" but it does seem to be correlated.

Ryan has the capability, I think, to change the underlying dynamics of the election and his convention debut will be a big part of that reboot. If Team Romney pulls it off, I think Ryan has bankable charisma and it moves the needle in the direction of the conversation Romney wants to have (or does he?).

* Third criteria is that it is rationalized after the event when recorded to note that it "could have been expected." I'm less concerned with that here.

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