The conventional wisdom is always wrong

One of the most profound insights into everything from politics to the stock market is J.K.Galbraith’s observation that the conventional wisdom is always wrong.

The ongoing relevance, and power, of the aphorism was on display  over the weekend with the South Australian election and the Batman by-election. For a week we were told by the media that  the SA election would result in a hung Parliament and the Greens would win in Batman thanks to strong votes in the southern part of the electorate.

The SA prediction was off although the Liberal majority was slim when you consider that it was battling a government which had been in power for 16 years. The Batman predictions were just plain wrong with Labor ending up winning at least 54% of the two party preferred vote when all booths had reported. Moreover there was a swing to Labor in the southern part of the electorate despite the predictions this would be the foundation stone of the Green victory.

The Sunday papers (early deadlines are a b..ger aren’t they?) were still talking up a Green win when the result was known hours before people dragged themselves out of bed to pick up their morning paper to read at breakfast. The Sunday Age even published an exit poll – undertaken for the Australian Conservation Foundation – showing a huge swing to the Greens.

As usual the inimitable Tim Colebatch had an excellent analysis of the SA and Batman results in an Inside Story article. The article was published after this blog and this is an addition to the earlier post. The remarkable Colebatch finding is that the ALP got a swing to it in both elections but the redistribution (the old electorate distribution was biased against the Libs) was the significant factor in their win. 

But as usual power stations hummed away to provide electricity for  broadcasts and social media searches and trees were pulped and made into newsprint all to provide hours and pages of speculation about an election outcome – almost all of it wrong, superficial and  irrelevant.

It would be an amusing farce if it were not symptomatic of the broader problem of the media – particularly the print bit of it. Too much emphasis on opinion disguised as analysis and too little reporting and genuine analysis. The usual Fairfax and ABC suspects, such as Adele Ferguson, Ross Gittins and Ian Verrender, being notable  exceptions to this problem. Oh that Tim Colebatch is not back at The Age although the blog can recommend a subscription to Inside Story if you want to benefit from his insights into economics and politics.

By the way that other good predictor (although not as good as the Nate Silver approach which admittedly is not – like all election predictive methodology – perfect either) the betting markets had a 50% success rate. Odds on the ALP winning Batman shortened considerably the closer the by-election was and made them the favourites. On the other hand the betting markets had Labor winning the SA election.

By the way part two: Silver was faulted for not getting the latest US Presidential result right although he did ask whether critics would have been willing to play Russian roulette at the same odds he was predicting for Trump’s chances. Ironically, the end result was that the whole US population has ended up locked in the  game,

However, one prediction which can safely be made is that by the end of the week most of the media will be behaving as if it got it right and busily speculating what it all means for the future.