Saturday, April 30, 2011

The NDP's New Place in Canadian Politics

I've been documenting through EKOS second choice data the rise of the NDP in the Canadian political zeitgeist. I've been using multiplicative coreness in several posts, utilizing the social network analysis software UCInet {v.6.238}. In  these analyses a party is in the core if it is popular and has overlapping support of other parties. The latter demonstrates its appeal across ideological space.

The latest EKOS poll [pdf] released on 29 April has a second choice report {see below} and the following federal voting intent for committed voters:: 35.4% CPC ¤ 29.76% NDP ¤ 19.9% LPC ¤ 5.8% Green ¤ 6.8% BQ ¤ 1.9% other.

The pattern over time {see below} shows the rise of the NDP. Before the election, the Conservatives were in the catbird seat. Using a strict test of core versus periphery of mean ± the standard deviation of the coreness scores shows the Tories occupying the core because of their relative popularity and appeal as a second choice. {A more liberal test has the NDP, Liberals, and Conservatives in the core in all of the following EKOS surveys}.

           Bloc 16.6                        NDP 33.2 Liberal 49.7                      Conservatives 73.8
periphery< |------------------------- 34.8--------------------------| >core
               13.5                               mean                            56.1
                     Canadian Political Party Coreness, 10 March 2011, EKOS data
                                  mean= 34.8, standard deviation {σ} = 21.3

           Bloc 10.1                       NDP 46.5 Liberal 50.8                      Conservatives 68.1
periphery< |------------------------- 33.7--------------------------| >core
               10.7                               mean                            56.7
                     Canadian Political Party Coreness, 13 March 2011, EKOS data [pre-debates]
                                  mean= 33.7, standard deviation {σ} = 23.1

            Bloc 9.5                                 Liberal 45.2 NDP 51.9             Conservatives 68.8
periphery< |------------------------- 33.1---------------------------| >core
                 9.2                               mean                             57.7
                     Canadian Political Party Coreness, 21 April 2011, EKOS data
                                  mean= 33.1, standard deviation {σ} = 23.9

               Bloc 10.4                             Liberal 46.1 NDP 55.0            Conservatives 65.7
periphery< |------------------------- 33.5---------------------------| >core
                 10.2                              mean                             56.8
                     Canadian Political Party Coreness, 27 April 2011, EKOS data
                                  mean= 33.5, standard deviation {σ} = 23.3

            Bloc 10.0                                 Liberal 43.9 NDP 52.6             Conservatives 68.9
periphery< |------------------------- 33.4---------------------------| >core
                 9.9                               mean                             56.9
                     Canadian Political Party Coreness, 29 April 2011, EKOS data
                                  mean= 33.4, standard deviation {σ} = 23.5

The NDP leapfrogged the Liberals after the debates and are making their way towards the Conservatives, who have remained static.  What's the specific pattern of support driving the results? I decided to look at degree centrality for the latest EKOS 29 April data [pdf], which shows how a party is a second choice of those intending to vote for another party {InDegree} and how a party's supporters are considering others as a second choice{OutDegree}::

Degree centrality showing pattern of second choices. OutDegree shows second choice percentages for a party,
InDegree percentages show a party being chosen by other parties' supporters as a second choice. InDegree deviates from Second Choice overall in the top chart due to rounding errors.

The Conservatives still solidly own a large chunk of the Canadian political zeitgeist because of their relative support of 35.4%, but also because their supporters have a high degree of loyalty {with 76.3% not having a second choice}. About one-fifths of Canadians are Conservative supporters {OutDegree of 18.112%} who are considering other parties as a second choice. Note that the numbers show that the Conservatives relatively low InDegree {8.032%}, further evidence that the party has maxed out in its crossover appeal. The NDP is sharing support with other parties noted by the high InDegree and OutDegree, showing how the NDP has a great deal of crossover appeal. InDegree shows potential for conversions, so the NDP and Liberals have some maneuvering room over the rest of the weekend. Of course, turnout will be the key factor, as well as the ground game in many of the ridings.

Leadership & the NDP
Jack Layton has soared in the leadership category, according to the Nanos leadership index, statistically tied with Harper on "trust" and "vision", while being behind on "competence". I feel Stephen Harper's tenure as PM is giving him this advantage. The old paradigm that Layton is a popular leader of an unpopular party is being challenged. The NDP is now more popular than the Liberals, but how this will translate into seats remains to be seen. I'll be doing a post on Ontario vote splitting within the next day. My take thus far is that the fall in support of 
both the Liberals and the Conservatives in the GTA [see March 10 & April 29 EKOS polls].

Twitterversion:: [blog] Trajectory of #NDP mainstreaming in #cdnpoli. Party moving into core of political zeitgeist #elxn41 @stormbrew

Friday, April 29, 2011

Can Taxes Actually Foster Innovation in Canada?:: Contrasting the NDP & Conservatives on Carbon Policy

Jack Layton, back in the day, from The Hour
Stephen Harper is getting worried that the NDP surge isn't going to just split the left and allow his party to go up the middle. I think if you look at the electoral map and patterns of support, this effect is overstated and Harper should be concern. I also believe that the NDP is no longer a fringe in the Canadian political zeitgeist. Harper is warning that Jack Layton and a NDP-led coalition will spell disaster for Canada::
"So these are big hits -big hits on consumers, big hits on jobs. It will stop our recovery in our tracks and it would send a message overnight that Canada is not a place to invest. Overnight."
The problem is that the Conservatives are trying to sell a "stay the course" message that has had few payouts for Canada. Case in point, innovation spending in Canada has historically lags behind other industrialized nations and under Harper it's gotten worse-even before the Big Recession. This is despite a generous tax treatment that's been in place since the Chretien years. The problem is that cutting taxes to incentivize innovation isn't a sure thing because of context.

Stay the Course:: Harper and the Old Paradigms
Harper is trying to reinforce an economic dogma that low taxes and what's good for business is what's good for Canada. Unfortunately, Harper and his Finance Minister Jim Flaherty are making it up as they go along. Flaherty eased mortgage restrictions in the heady days of the US subprime-fueled housing bubble, only to tighten things up earlier this year over concerns about too much consumer debt. The ratio of household debt to disposable income in Canada is now at 1.48, on part with that of the U.S. Is this a policy flip-flop or a shrewd reaction to market forces? It's the former. The Conservatives are hiding the elephant in the living room:: Canada's weathering of the Big Recession is a function of a sound banking sector that wasn't deregulated thanks to the Liberals and record low interest rates. The Conservatives were betting on bubbles and still are, but the growth is smoke and mirrors::
"The country's recent growth has largely been driven by super-low interest rates. With relatively cheap borrowing costs, prices have surged for housing -- nearly doubling in the past ten years nationally -- and for commodities, which make up nearly half of Canadian exports."
When Harper talks about stability and low taxes, he's trying to prop up global investment and maintain and/or foster asset valuation bubbles.
"So this would be just an enormous bad signal. Now, ultimately what we're saying is that such a government, an NDP-led coalition, would be unstable and wouldn't last very long. But no one should underestimate the damage it would do to Canada's reputation and credibility and economy in the meantime."
It's all he has, since Canadian productivity is lagging, which is the real economic albatross, and he's really doing nothing to remedy this. Stephen Harper represents an economics orthodoxy that's both outdated and swayed by politics. Fostering asset bubbles, deviating from his free market stance with Potash, propping up the asbestos industry in Québec, and his unyielding commitment to purchasing the F-35 despite fiscal concerns indicate a economics approach that is haphazard and isn't going to lead to increased productivity.

NDP, Layton, and Carbons:: Taxes and Regulations as Incentives for "Creative Destruction"
Harper also went on the offensive attacking Layton on how his plan to reduce carbon emissions will result in higher gas prices with University of Calgary economist Jack Mintz estimating a rise of 10¢ a litre.  The catch is that, Mintz's work is based on erroneous assumptions about the NDP plan.

Moreover, this OECD post goes beyond Mintz's energy economics that underestimates shifts to new production modes using newer technologies by stating there is a role for tax policy in environmental economics that features innovation::
"But using the tax system merely to encourage the supply of innovation for the environment simply will not be sufficient. If there is no cost to polluting, why would a firm adopt environmental innovations, however technologically advanced or cheap, that helps it to pollute less? Some firms may benefit from undertaking “green” innovation for customer or investor relations purposes but, as a rule, environmental innovation is different from other types of innovation: stimulating environmental innovations will see little uptake by polluters, unless matched by measures to stimulate demand for those innovations."
Taxes create a demand for new technologies that emit less carbons by imposing costs on pollution. Will this harm the economy? The NDP's plan is to impose an initial $45 per ton of carbon emissions tax over a set limit for big industrial polluters, not everyday consumers.

Governments can set other policies that spur innovation. California created a 10% zero-emmissions vehicle mandate in 1990, which was responsible for accelerating the development of hybrid technologies. While the policy may have been optimal if it focused on pollution reduction targets, rather than a technological quota {zero-emmissions vehicles}, the size of the California market was significant enough for auto manufacturers to respond. Increasing fuel efficiency requirements and other regulations that restrict the use of polluting technologies or increase incentives for the development of green technologies are in policymakers' toolkits to shift production to a new technological curve.

Another key issue is a recurring theme on this blog of late— open innovation, which the NDP supports in the area of "open source" {definitions}. Open innovation embraces the idea of widely distributed knowledge, as opposed to silos of knowledge housed to protect intellectual property rights. Open innovation follows the ideas of Schumpeterian economics and the idea of creative destruction—new paradigms destroying the old.

Jack Layton and the NDP argue that their policies will ensure consumer welfare isn't harmed and is open to price regulation of gas. Tax policies can be crafted that don't shock markets are cause a dramatic rise in prices. Fearing taxes on this basis alone is shortsighted to say the least.

Stephen Harper will of course threaten that increased carbon taxes will uniformly drive business away or harm consumers. In a sense, this type of policymaking is tantamount to not only subsidizing pollution, but can subsidize old and inefficient ways of doing things that inhibit Canadian competitiveness. The policies of the NDP are interesting, as they are moving Canada towards a logic of a new paradigm that can finally break Canada out of the productivity trap.

Twitterversion:: [blog] Can Taxes Actually Foster Innovation in Canada? Contrasting the #NDP & Conservatives on Carbon Policy @Prof_K

Thursday, April 28, 2011

The NDP Surge:: Who's Defecting?

There a lot of buzz about the NDP and I wanted to decompose EKOS data to determine where it's coming, not geographically, but partywise. Back in March, I did a very long post analyzing EKOS data from late February-early March attempting to deconstruct patterns not readily evident. The Conservatives were doing a good job of attracting the 2008 voters of other parties, while the NDP and Greens were bleeding off double digit percentages to other parties. The NDP wasn't doing a great job of attracting the support of 2008 voters for the two major parties. The latest EKOS poll {below} shows a big shift. Looking across the rows, you can see how a party is doing in attracting voters who voted for another party in 2008.

Loyalty Pattern comparing 2008 vote to 2011 intent,
EKOS data 24-26 April
Looking at the second row, the NDP has picked up double digit support from each of the other parties. 

Looking at the same data but adjusting for relative party support {2008 overall vote}, we can readily see where the shifts in support have been {see table below}. While the NDP surge in Québec at the expense of the Bloc is old hat, this shows the NDP is picking up support from all of the parties. In fact, more NDP support has been siphoned off from the Conservatives {4.70%} than the Bloc {3.36%}.

2011 federal vote intent by 2008 vote, adjusted by 2008 overall vote percentages.
EKOS data, 24-26 April 2011.
Note the NDP is doing a better job of getting converts than any other party. Ignatieff's Liberals have done a better job of getting supporters of other parties to join the big red tent than Harper has been able to for the Conservatives. I'm not alone in believing that Harper was bumping up against a ceiling, limiting his ability to attract more voters. Examining degree centrality in social network analysis {using UCInet 6.328} shows the pattern of conversion and defection {see table below}. The conversions {InDegree} are the same as the "Total from other parties" above. The defections are the OutDegree statistics::

The Liberals have lost a large number of supporters, 10.66%, as have the Conservatives at 8.74% and the NDP at 5.57%. Looking at both OutDegree and InDegree shows the NDP being the only party with more converts than defections, by a sizeable margin.

The seat projections are getting interesting with respect to the NDP, with several having the party as the official opposition {below}::

CPC:: 143 NDP:: 47  LPC:: 74   GPC::  0  BQ:: 43 

Too Close to Call
CPC:: 142 NDP:: 88  LPC:: 64   GPC::  0  BQ:: 14 

CPC:: 139 NDP:: 98  LPC:: 56   GPC::  0  BQ:: 14  OTH:: 1

Democratic Space-Average
CPC:: 156  NDP:: 65    LPC:: 55    GPC::  0  BQ:: 31   


CPC:: 149  NDP:: 35    LPC:: 76    GPC::  0  BQ:: 48   

Twitterversion:: [blog] Analysis of EKOS data examines the partisan source of the #NDP surge. It's not just the Bloc & Liberals @Prof_K