US Politics / Paul Krishnamurty / 01 October 2008 /

Long-time politics punter Paul Krishnamurty has a word of warning for those who think Obama is a shoo-in in the US Presidential betting.

There's a famous old saying that 'a week is a long time in politics'.

In political betting, the world can be turned on its head in a much shorter space of time, as we've seen so many times in the last year. Most recently, Labour were trading around [1.1] a couple of hours before losing the Glasgow East by-election, and their internal deputy-leadership contest saw Alan Johnson trading at similarly short-odds just a few minutes before Harriet Harman was declared the winner.

The most dramatic recent turnaround of all came in the US Presidential contest, when Hilary Clinton's win at the Democrat primary in New Hampshire stunned Barack Obama's 1.01 backers.

In fact the whole Presidential race has been littered with upsets so far. Clinton herself traded as odds-on favourite, while both Republican candidate John McCain and VP pick Sarah Palin were written off as no-hopers before winning their respective markets.

Why do these upsets occur so regularly in politics? Principally, the cause tends to be the market over-estimating the accuracy of 'breaking news' and media analysis. Its not that the analysis is always wrong, but pundits in a TV studio can only know so much about the reality on the ground. Their perspective is inevitably clouded by rumours and the stream of often unreliable exit polls.

Indeed, it was these dubious exit polls that turned the in-running market on its head in the last Presidential election. Though everyone expected a tight contest beforehand, once several exit polls gave crucial states to John Kerry, his price plunged into [1.25]. An hour later, it was apparent he'd lost.

So as we enter the final month of an enthralling contest, are there any upsets left? Again, the consensus has been that the result will be very close, but in the last few days Obama's poll-lead and market dominance has surged, forcing his odds into [1.5].

Perhaps Obama's improved position owes something to a strong performance in last week's opening debate, but more likely is that the polls are responding as the electoral agenda shifts on to his favoured territory. If John McCain would like to see the debate centred on foreign policy experience, Obama would much prefer to discuss the economy.

The ongoing crisis ensures that the economy will remain centre-stage from here on in, which should favour the Democrats after eight years of a Republican presidency widely perceived as to blame. Democrats dominate the Senate, House of Representatives and national opinion polls. If George W Bush or any of his key allies were his opponent, Obama would be a cast-iron certainty.

But here's the caveat - John McCain is not Bush, not by a long chalk. In fact he's not really like any recent Republican candidate. McCain's personal history as a former POW in Vietnam, and his conduct throughout a long political career has earned widespread respect in a way other politicians can only dream of. Its only a few years since McCain topped polls for the nation's most popular politician.

The self-styled 'Straight Talk Express' positions himself as an outsider, a maverick determined to shake up Washington. Always prepared to oppose his own party when principle demands and work across the political divide, McCain further enhanced his appeal to independent voters with his outspoken criticisms of Bush. Support from the politically non-aligned was crucial in helping him upset the odds to win his party's candidacy, and it could yet prove so again.

Another key will be the trends amongst women voters, which no doubt informed McCain's shock decision to select unknown Alaska Governor Sarah Palin as his running mate. Initially, her entry into the race has seemed to help McCain's cause. Not only does her presence on the ticket ensure the Republicans retain the strong evangelical support that carried Bush to the Presidency, but she could also win over female voters who identify with her 'hockey-mom' tag - including some of Hilary's disillusioned supporters.

Alternatively, Palin's very short time in the public spotlight has polarised public opinion. Her views on social issues such as gun control or abortion could just as easily undo some of McCain's appeal to independents, as could a blatant lack of foreign policy knowledge. Nevertheless, she remains the 'joker in the pack', and probably McCain's best chance of pulling off yet another famous political upset.

In short then, while Obama remains a strong favourite, you write off McCain at your peril. If the last two elections are a guide, then swing states such as Ohio and Florida will prove decisive. Both of those are currently too close to call. Betfair have in-running markets on all these individual states, and history would suggest that we're bound to see at least a couple of big turnarounds on the night. Above all, be very, very wary of early exit polls!

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