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Sunday, December 28, 2003
 
This article is undeniably the worst bit of political analysis I have read this year. Consider the following:

"That may be why no unchallenged front-runner has emerged for the party's presidential nomination."

Dean may not be unchallenged (actually, he is quite challenged imho), but he is clearly running away with the nomination.

"But Kucinich is a cut above the other "second-tier" contenders, someone with a realistic chance to break through, as his runner-up finish in last summer's MoveOn.org preference poll proved."

Kucinich is the darling of the far-left, but he has NO realistic chance to break through. He has consistently polled in the 1-3% range both nationally and in state polls. His standing in the MoveOn poll simply reflects how out of touch that organization is.

As for Dean,

"The former Vermont governor would draw well among independents - his real role model is John Anderson - but, if elected, would soon be warring with fellow Democrats over domestic policy."

This is just plain silly. Dean is not going to be strong among independents, and John Anderson was supported in his 1980 run mostly by radical leftists who were burned out on Jimmy Carter. I know because I was one of them (back before I became a Republican). Anderson got 15% in Massachusetts, managing thereby to hand the state to
Ronald Reagan. I believe that is the highest percentage Anderson got in any one state.

Hilariously, he concludes:

"In the meantime, do you suppose the new, improved Al Gore might reconsider?"

Not sure how Al has improved, but his endorsement of Dean would seem to take him out of the race.
0 comments
Tuesday, December 16, 2003
 
Proof Dean is the Democrats' Worst Candidate

I have been debating my liberal friends on the issue of Howard Dean's electability. They quite reasonably ask why they should listen to me, since I make no bones about my desire for George W. Bush to be re-elected. Why would I tell them something that would decrease the odds of Bush winning?

My response to that is, a) there is the credibility issue--if I'm wrong too many times about what is going to happen, nobody will pay attention to anything I say about politics and b) Although Dean's nomination helps Bush (IMHO) it increases the downside if the Republicans get caught in a perfect storm next year, if there's a sluggish economy and continuing problems in Iraq. I don't want a Gephardt or Lieberman administration, but I'd HATE to see a Dean administration.

But of course liberals still tend not to believe me. So I wondered if there was some way to demonstrate that Dean is the worst candidate in an objective fashion. So I went to the Iowa Electronic Markets (IEM). The IEM are run by the University of Iowa business school, and what they do is provide a trading opportunity for shares of Howard Dean, Wesley Clark, George Bush, etc. The way it works is that you send them an initial investment (say $50) and then you can trade in a political futures market.

The market is designed so that the payoff is based on particular candidate matchups and their vote total. For example, suppose you wanted to invest in Wesley Clark today, and say that shares of Clark Preferred are running about 4 cents apiece (as they are today) and you intend to hold onto the shares. You get paid off if Clark is the nominee of the Democrats, and the amount you receive is determined by the vote share Clark gets--i.e., if Clark gets 45% of the vote, you get 45 cents for every share of Clark you purchased. Similarly if you wanted to invest in President Bush against Clark, you might pay 4 cents for those shares as of today, and if the general election is Bush against Clark, those shares will pay off at Bush's popular vote %--if Bush gets 55% of the vote, you would get 55 cents for every share of W Preferred you owned. (Note: the IEM only does the percentages between the two major party candidates; in other words Bush's percentage would be Bush's popular vote divided by (Bush's popular vote and Clark's popular vote).

The IEM provides some data at its website on the current market for each of the respective shares. For the record, there are 14 different contracts based on 7 possible matchups : Bush versus Clark, Clinton, Dean, Gephardt, Kerry, Lieberman and Other Democrat.

As you might expect, the IEM is strongly anticipating a Bush-Dean matchup, with those shares by far the most valuable in the market. But the interesting thing is to look at the relationships between the values of the various shares. On average, shares in Wesley Clark's campaign have sold for 3.4 cents today, while shares of Bush/Clark have also sold for 3.4 cents today. In other words, the market is saying that if Clark is the challenger, his shares are worth about as much as Bush's shares. Gephardt does even better, with his shares running 4.6 cents apiece today, while shares of Bush/Gephardt were trading at an average of 4.5 cents. In other words, the market sees Gephardt as a very slight favorite over Bush.

And Dean? Well, Dean is the weakest candidate in terms of the value of his shares compared to Bush over him. Dean's shares are running 34.1 cents today, while Bush/Dean shares are running 40.9 cents today. Bush is clearly a strong favorite to win according to the market if his opponent is Dean. Let's assume that the market is rational and that the investors in each of the candidates wants to make the same return. What percentages in the general election would give Dean investors and Bush/Dean investors an equivalent return? The answer is that if Bush wins by 54.5% to Dean's 45.5%, both investors will receive an equal % return on their money (about 33%).

All the other Democrats are pretty much on an even footing with Bush. Hillary's shares are currently worth 4.1 cents while Bush/Hillary is worth 4.2 cents, indicating the market sees this matchup as 50.6% Bush-49.4% Clinton.

The market also sees John Kerry and Joe Lieberman as having virtually no chance of winning the Democrats' nomination next year. Kerry's shares are down to 0.8 cents apiece, while Lieberman's are worth only half a penny. The market sees stronger chances for for Gephardt at 4.6 cents and Clark at 3.4 cents.

Conclusion: The participants in the Iowa Electronic Markets perceive Dean to be the weakest choice to beat Bush among the Democrat field. Note: The Iowa Electronic Markets are constantly changing, so by the time you click on the link there may have been some small changes compared to the data presented here.

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