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Elections, Polls, Terrorism and Financial Market Behaviour

​MIT economist Jonathan Gruber’s candour shocked many when he said that Obamacare could only be passed into legislation if it was “written in a tortured way” so it could play to the “stupidity of the American voter.” While politicians on both sides of the political divide were quick to support the ‘intelligence’ of their constituents the reality today is that ‘actual’ voter turnout across the globe, including America has been steadily falling over the last six decades and the incidence of informal (‘donkey’) votes has been surging. Even countries like Australia which has mandatory voting has seen voter turnout decline while donkey votes have trebled.

In the last US Presidential election of 2012, only 54.7% of voters turned out. 97.1% of taxes paid came from the top 50% of total income tax filings that year. Non taxpayers don’t make noise at elections but the Democrats are running a campaign pleading for them to vote in the 2016 Presidential election. Quite right too. Since 1952, Republicans have required an average voter turnout of just over 55% to take power whereas the Democrats have tended to win when that number has been a full ten percentage points higher. Consumer confidence is also a good indicator of who tends to win power. Not surprisingly when glum times appear, voters go for the security of a Democratic party policy platform.

We also look at the sharp rise of right-wing/nationalist/anti-immigration parties in Europe. The statistics are telling. Note these polls were all conducted prior to the tragic terrorist attack on Paris and are compared to the previous national elections in those countries. Will these events bring about a reversal of this long trend of apathy at general election time? Market reaction to terrorist events has been heavily anaesthetised over time.