George Akerlof and Robert Shiller, in their recent book Animal Spirits, argued that economists tend to focus on what is seen as a departure from the accepted model or norm rather than focusing on what might actually be the real world situation. For example, the authors speculate on why economists dwell on the fact that US unemployment during the Great Depression got as high as 25% rather than considering why 75% of workers were able to remain gainfully employed.
I was reminded of Akerlof and Shiller’s point when pondering the recent shift in the apparent support for the Liberal Democrats. The Lib Dems have moved from third place to first place in one weekend opinion poll and as a result the outcome of the election is thrown open. Political commentators talk of this being a “game changer” or even the start of a completely new chapter in British politics.
Of course, the Lib Dems might not be able to sustain this level of support for very long. But whether they do or not, what interests me is the way in which this shift in support has been portrayed over the last few days. The shift in Lib Dem support is being seen as a huge change, yet if one looks at the opinion polls – which we should remember have a relatively small sample size - only between 8-10% of people appear to have shifted their views.
Indeed, it is possible to present the change in Lib Dem support rather differently: this week they are opposed by only 70% of the electorate compared with 80% last week. This certainly doesn’t sound like a “game changer”. A more sane response to this small shift would be to conclude that Nick Clegg and the Lib Dems are now only as unpopular as Labour and the Conservatives. On this basis I’m not sure they deserve congratulating quite yet.