October 26, 2004 | The Times of LondonAs things stand there is no way to reconcile objective polling evidence that shows a dead heat between John Kerry and George W. Bush with the very high probability attached to a Bush victory on Wall Street. Even the 58-42 split in favor of Bush in the UNIVERSITY OF IOWA electronic market, in which academic experts and investors back their judgment with real money bets, seems unrealistic. If anything, a dead heat in the opinion polls suggests two reasons why Kerry is likely to win. First, there are some well-established biases in the polls that tend to underestimate the role of young, poor and new voters and to overestimate support for incumbents. A second structural problem for the Bush campaign has been less widely recognized. For economic reasons the line-up of state voting looks less favorable for Bush than it was four years ago. U.S. elections tend to be won or lost in the Midwest and Great Lakes states -- Ohio, Michigan, Illinois and so on -- because of the electoral college system. But the Midwest also happens to be America's manufacturing heartland -- and the manufacturing sector has fared much worse than the rest of the US economy in the past four years.
Contact: Forrest Nelson