I think the barracking for a footy team metaphor was what i was trying to get at. I always love it when one person’s sentence can sum up another’s paragraph (not that it’s much of a paragraph.)

That said, it is hard to imagine how low levels of support for a government, combined with little possibility of removing that government in the short-term, could be good for confidence and hence the economy. Here, I’m thinking of current circumstances in the UK.

So, I guess the conclusion would be that there is probably two-way causation, with it hard to determine the relative magnitudes. I suspect most runs from the economy to polling though.

I guess my other point would be that while the government hasn’t performed badly, they are also benefiting from a set of fortunate circumstances. They look great in a relative sense because the rest of the world has tanked, while we haven’t. Voters probably aren’t able to determine the reasons for the relative out-performance, so credit some of it to the government of the day.

It’s a good point on the political capital.

I still think it will all come down to the Coalition – they’ll be forced to decide which will be least damaging to them: Passing an ETS and avoiding a DD, or not passing it and fighting one.

Thanks Ad and WM.

This is just about expectations, and as far as the politics goes, the management of them.

The question of good polling for a government and boosting of the Australian economy (mind you, just the boosting part that can derived from positive expectations about the future – mostly the non-deferal of consumption and investment) is partially tongue in cheek.

Sure it probably runs mostly from good standard of living expectations *INTO* good polling for the government, but is it entirely that? Is there a chance or an argument for some unspecified chunk of it running the other way?

Does some herd effect play a part where some people might be hesitant about their future standards of living, but see a government being really strong in the polls and it tips them over into positive territory because “everyone thinks the government knows what it’s doing – it must be right”?

I suppose I’m wondering whether good polling creates a level institutional trust in the ability of a government to deliver practical benefits to the economic and personal circumstances of the electorate, and where that very increase in trust itself flows through to more positive expectations than would ordinarily be the case?

There are sound economic reasons why Australia is faring better than most other developed countries during the global recession:

We don’t export much of those goods and services for which demand fell off a cliff at the turn of the year.

Our superior fiscal position provided significant room for stimulus

There was no real credit crunch here, which meant that the majority of RBA interest rate reductions were passed through to borrowers

Due to previous underinvestment, there was no excess supply of residential buildings, which has meant that the residential construction sector has been able to hold up well and now respond to the signifcant decline in financing costs

These are all real economic factors

Do you think that European governments haven’t attempted to talk up their economies as well?

The problem there is that such talk in Europe has had to confront the hard data, which is related to economic factors beyond their short-term control.

The way you write, it is as though all those governments needed to do was change their rhetoric and things would be a lot better there!

As if!!

Consumers in Australia are reacting to the relatively better economic circumstances that they face. They were told things might collapse. They didn’t. The government did the right thing by enacting a substantial stimulus early, and that is helping the economy. Most have seen their disposable incomes increase and their interest servicing burdens fall. For those with jobs, and confident of retaining those jobs, the outlook looks bright, particulary compared to a few months ago.

The ALP’s superior polling presumably reflects that the majority of Australians feel like they have handled the crisis well. It is endogenous to the state of the economy, much of which has actually been beyond the government’s direct control.

As a statistician you know better than anyone that you should be wary about confusing correlation with causation.

I had the same thought yesterday re ETS. It’s going to take a fair whack of political capital to get an ETS in place and make it strong enough to count. And Turnball just gave Rudd an extra big helping of juicy political capital. Here’s hoping it gets invested where it’s needed.

The same argument could actually be made re George W. If he hadn’t have been so overwhelmingly unpopular, would Obama now have the political capital to take the measures he is taking?

How wonderfully selfless of these two leaders to sacrifice the the electoral fortunes of thier respective parties for the good on all mankind.

I think it also illustrates, as if we needed any more evidence, that humans aren’t 100% rational. That voters will so clearly change their perception of these factors based on a change of government; i’m amazed that people think that governments can change the country that quickly.

Also I’d repeat Ad Astra’s first sentence. Bravo.

Could be a lot of others joining Costello in leaving at the next election, voluntarily or involuntarily. Not good for democracy, and unless the left flexes its muscle and forces Rudd to step even further away from Rattus, back to a a more centre-left position rather than the current right-centre position, we’ll just have more of the same Keating/Howard lunacy.

This analysis is fascinating. It reinforces the Government’s view that talking up the economy and fostering confidence and optimism is what the country needs, and gives validity to the assertion that the Coalition’s negative talk about the economy and the Government’s actions is counterproductive.