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November 5, 2004
The Race to the Edges
In yesterday's NY Times Virginia Postrel highlighted a recent game-theory economics paper that looked into why Republicans and Democrats were so far apart on religious issues, rather than racing to the middle as political theory predicts.
In essence, the paper argues that it is has to do with how (relatively) few people go to church in the U.S. Politicians need to energize their base, and they do that, in part, by appealing to targeted and motivated groups with strong views on things like religion:
If a group is too small, it's not worth courting. But if it's too big, it includes too many of your opponent's supporters, making targeted messages impossible. If everybody goes to church or belongs to a union, membership in either group will not predict voting behavior.
Assuming that is the case, Why don't more equity analysts don't come out with outrageous calls? While there are plenty of reasons why there is comforts in crowds of analysts huddled around middling forecasts and 10% price-increase targets, you might expect more analysts to take extreme positions -- 100% gains on Google, or that Google will fall by half -- than actually do. There is, after all, a constituency for extreme pessimism, for example, but few high-profile analysts pander to it to differentiate themselves.
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I claim the distance on religion is a false premise. How were they so different? They both were against gay marriage. They both pandered to church audiences. Clearly Bush appealed to religious voters more, but its not Kerry's issue that so many left-leaning cities tried to push gay marriage earlier in the year.
I have found Postrel to be a weak thinker (did anyone read "Dynamism"??? YAWN). A classic pseudo-intellectual, she is too caught up in her own perception of herself as a genius. Every morning she wakes up in a cold sweat, dreaming once again of getting a MacArthur scholarship, then falls back asleep weeping.
Fair enough, but there is more to it than abortion and gay marriage, even if those are the favored litmus tests. As the authors of the paper point out, the data shows that "church is a better predictor of supporting George Bush than is being rich."
Further, there is a "strikingly negative relationship between state per capita income and the share of the state that voted for Bush in 2000."
And one more: "The correlation between income and party affiliation has been roughly constant since the 1960s, but the correlation between religious attendance and party affiliation has
risen over this period."
Paul, I would like to invite you to a investor-oriented conference we are hosting in NY on Dec 13 focused on Paid Search and Online Shopping. Please let me know if you are interested.