Friday, November 5, 2010

A Post-Election Scorecard, The Underperforming Tea Party, Pelosi Runs Again

In investing, it has been proven over and over again statistically that the vast majority of "active" mutual fund managers, those who trade frequently to try to beat the market underperform simple index funds which just buy the stocks that comprise big indices such as the S&P 500.

How is this relevant to politics and predicting elections? I feel a bit like one of those active managers.

Not that this site did badly in the past election. In the close Senate races, I had an average error of only 3.8% and an average bias of only 2.7%, both the second best of the 4 major election sites I benchmark against. And these are the best of the best...well established sites with a strong history of projecting elections.

It's just that I didn't "trounce the market"...and if you followed this site in 2008, you know that through a combination of a lot of luck and some skill, I trounced the market back then. Here is a scorecard comparison of the close Senate races and the total House count among the major sites.

You can see my averages got hurt by big misses in Colorado and Nevada and to a lesser extent, incorrect margins in the fringe close races in Missouri and Kentucky. You can also see that no specific method of poll aggregation prevailed over other methods as the one that was most accurate.

My numbers would be so much better if it weren't for those darn.....

Underperforming Tea Party Candidates
The Tea Party clearly cost the GOP 3 Senate seats in this past election cycle. The trouncing that Christine O'Donnell took in Delaware was predicted. The losses that Ken Buck and Sharon Angle took in Colorado and Nevada respectively were unexpected, at least by myself and other major prediction sites and show a consistent pattern.

The Tea Party had either 5 or 6 loyalists that won GOP nominations for the Senate this cycle, by my count. It is tough to get an exact count, since there is no clear definition of who is a "Tea Party Candidate", but certainly Christine O'Donnell, Joe Miller, Sharon Angle, Ken Buck and Rand Paul fit that bill. Marco Rubio is somewhere in between...he enjoyed strong support from Tea Party organizers against Charlie Crist, but was careful not to get too close to the movement.

If you don't count Rubio, who obviously did extremely well, then the experiment in Tea Party candidates was more or less a complete disaster for the GOP.

Christine O'Donnell, Sharon Angle and Ken Buck all lost. Joe Miller appears likely to lose in Alaska. And it is abundantly clear...mainstream candidates in each of these 4 races would have easily won on the GOP line.

Rand Paul did win in Kentucky, but a Republican Senatorial candidate winning by less than 12% in dark red Kentucky in a heavily Republican year is hardly an impressive showing.

Rand Paul wants a Senate Tea Party caucus. It will either be loaded with Republicans who voted for all of the Bush spending increases and TARP plans or it will be a very lonely place.

Let me repeat what I said from the outset: The Tea Party is a joke.

Pelosi Runs Again
Outgoing Speaker Nancy Pelosi (D-CA) has announced that she will run for minority leader when the new House convenes. This is a break with tradition, whereby the leader of a party generally steps down when his or her party losses the majority. Pelosi appears poised to win, over the objections of conservative and moderate Democrats. There just aren't enough of them left to overcome the liberal base in the House...frankly the conservative Dems were the ones hit the hardest in this election cycle.

Pelosi has been an effective leader in getting things done...can you name one policy priority for the Democrats for which Pelosi didn't get a bill last congress? But she is also a polarizing figure in the country, one whose image raises a lot of money and energy for the GOP. I don't have a dog in the hunt, but if I were the Democrats, I might want a fresher face with a more moderate image.

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