In the lead-up to the presidential elections, I’m endorsing this youtube clip from VOX.
I realise that it may not be especially economics-ey, but I think that the point is important: often, when we apply conventional logic (geography) to something that seems related (voters across said geography), we get it wrong. Badly wrong. Almost as wrong as likening an economy to a household.
Here’s the standard presidential presentation (from the 2012 Romney v Obama election):
And from that angle, it seems crazy that Obama won. The whole of the country is basically a sea of red votes for Romney, with some isolated pockets of Obama, and then some purple in between.
But Obama won.
So what’s going on?
Well, clearly, if I was the kind of person that likened economies to households, I’d be saying things like:
- The system is obviously rigged.
- The comeuppance day is coming.
But the simple problem is that the map too linear. There is more than geography at play. There is population density.
And once you do that:
Suddenly, it’s less surprising, right?
Perspective: it matters.
Also, don’t get fanatical about the two-dimensional simplicity of things. Leave that to the conspiracy theorists.
Rolling Alpha posts about finance, economics, and sometimes stuff that is only quite loosely related. Follow me on Twitter @RollingAlpha, or like my page on Facebook at www.facebook.com/rollingalpha. Or both.