Tuesday, August 14, 2007

Tuesday column: surely we couldn't...

Surely Australians couldn’t possibly turf out the Prime Minister while the economy’s going gangbusters?

The evidence suggests it would be unusual. All sorts of studies have found that we like to reward the party that’s in office when times are good, up to a point.

One of those points concerns daughters.

At least in Britain the more girls you have, the more likely you are to vote Labor. Seriously...

And the more boys you have the more likely you are to vote conservative.

British economists Andrew Oswald and Nattavudh Powdthavee examined survey results for 10,000 people and found that found that 66% of parents with 3 sons and no daughters voted Labour or Liberal Democrat, compared to 78% of parents with 3 daughters and no sons.

The difference wasn’t a coincidence. The parents tended to change their votes that way after they had had their children. Oswald and Powdthavee found that each daughter raised the likelihood of left-wing voting by two percentage points.

In Germany a similar study found that each daughter raised the likelihood of left-wing voting by 2.5 percentage points.

The British researchers think that women are inherently collectivist while men are individualistic. As men acquire daughters, they gradually shift their political stance and become more sympathetic to the “female” desire for more public spending.

I’m not sure what they’d make of Australia where women have been more likely than men to vote for the Coalition, although the gap is closing. In any event in the lead up to this election it is Coalition that’s promising the most public spending and the Coalition that is promising to save at least one public hospital from closure.

John Howard and Peter Costello say that we should re-elect them because the economy is doing well, and there’s no doubt that it is doing well, so well that for the first time in an election year we’re likely to get two interest rate rises.

There are skeptical types like myself who think that just as John Howard and Peter Costello shouldn’t be hung and quartered for those two interest rate hikes, they shouldn’t get the lion’s share of credit for the health of the economy either. China deserves that.

Research by the ANU’s Andrew Leigh suggests that I’m pretty much out on my own here. Most people give the government of the day the credit for good economic terms, even when those good times are being enjoyed worldwide.

But critically more and more people are joining me in taking a closer look at such claims.

Leigh examined data from 268 national elections throughout the 1980s and the 1990’s. He wanted to find the extent to which a good international economy benefited a national leader standing for reelection (“luck”, as he called it) and the extent to which doing better than the rest of the world economy benefited a leader (“competence”, in his words.

He found that competence was only half as useful as luck.

But the better off a country was and the more educated were its people the more the more they came to value competence.

Media mattered too, although in a surprising way. The more newspapers were read per head, the more competence mattered to voters. On the other hand the more television sets a country had per head the less competence mattered.

Television may well be the best outlet for propaganda, newspapers for a more complicated discussion of the truth.

In the US the pro-Republican Fox News Network which in its early stages was rolled out to some towns and not others was found to have lifted the vote for George Bush by 0.4 to 0.7 per cent in those towns that had it.

In any event in Australia the electoral luck of politicians enjoying economic luck may be running out.

At each of the last six elections, the ANU’s Australian Election Survey has actually asked voters what effect they thought the government had had on the Australian economy.

Each time the proportion saying “not much difference” has grown, climbing from 39% in 1990 to 57% in 2004. Most of us are now skeptics.

A paper released a few days ago by the parliamentary library gives a clue as to why. It graphs a range of economic indicators under the Whitlam, Fraser, Hawke/Keating and Howard governments. The most obvious patterns have nothing to do with who was in power.

Inflation has steadily fallen from one administration to the next. Our exchange rate has steadily fallen as well. Our foreign debt has steadily increased. Our Household savings ratio has steadily fallen to the point where it is close to zero under Howard, but he can hardly be blamed for the continuation of a trend. A lot of trends seem to have had nothing much to do with the party in power.

The Australian Chamber of Commerce and Industry must have got wind of this. It has convinced a number of newspapers that it has research suggesting “300,000 jobs to go under ALP”.

Compiled by the respected modelers Econtech the research predicts five interest rate rises, a loss of more than 300,000 jobs, and a $57 billion hit to national GDP should WorkChoices be wound back.

But, contrary to impression you get, the study doesn’t examine what would happen if WorkChoices was wound back to where Kevin Rudd has promised to put it (no AWA’s and a continuation of enterprise bargaining) but to an earlier time when wages were set centrally by the Arbitration Commission, something no political party is contemplating doing. (Labor is even promising to abolish the Arbitration Commission).

Econtech is scrupulous in its report in making clear that it was restricted by limited, and not particularly relevant, terms of reference.

Most administrations seem to change things bit by bit rather than all at once, a truth that’s not particularly useful when you’re trying to campaign on an issue or for a vote.

And on some questions there’s no consistency between Coalition or Labor administrations.

The parliamentary library finds unemployment rate rose under Fraser but fell under Howard, that real incomes soared under Whitlam, but fell under Hawke and Keating, that the government went into deficit under Fraser and also under Hawke/Keating, but went back into surplus under Howard.

It’s enough to make you think that we just could turf out this government while things are going gangbusters. It may not make much difference