Mea Culpa: The Economy and the Election

By Harold Jansen on Oct 11, 2008

It's the last weekend of the election and it's time to look back at the campaign. I've also looked back at the blogging we've been doing. I went back to the post where I argued that the election wouldn't make much difference in the campaign. Obviously, I was wrong. The election has come to dominate the campaign in a way no one could have foreseen. In that post, I argued that the economy wouldn't make much difference because there's a lag between economic changes and voters' perceptions of the economy. As a general statement, I think that holds true. But my argument that voters in Canada wouldn't yet perceive the economic downturn turned out to be incorrect. In my defence, what we've seen in the markets is almost unprecedented. But obviously panic has set in and people have become very concerned with the economy. I think there's still a mismatch between perception and the actual state of the economy, but I think it's actually moved the opposite way of what I predicted. I think Canadians actually think the economy is worse than what it is. We're going to get hurt by the slowdown in the USA, but the panic right now is not matching the economic fundamentals. People think the Canadian economy is worse than it is and the Conservatives are paying a price for it.

You can sense the palpable frustration among Conservatives that their election has been hijacked by the economy. Things were going well: they were in majority government territory and then the economic panic set in and things fell apart for them. If only there had been a law that would have let the government wait a year to call the election... Oh wait, there was. On the other hand, none of the opposition parties has been able to capitalize on the economy decisively. So we're looking to have a very fragmented election outcome on Tuesday night.

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