Edward Conard

Top Ten New York Times Bestselling Author

  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Wednesday, June 26, 2024

AI Summary. The authors find the entire decline in the gender pay gap comes from newer cohorts entering with smaller-than-average gaps and older cohorts exiting with larger ones, with entry convergence driven by younger men's positional losses in the wage distribution, especially at higher-paying firms. They find labor-market exit became the sole contributor, implying no full convergence ahead.

Jaime Arellano-Bover, Nicola Bianchi, Salvatore Lattanzio et al. National Bureau of Economic Research
Date Posted:
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The decrease in the gender pay gap in the US originates from the exit of age cohorts with high gender pay gaps, and the entry of recent cohorts with much lower pay gaps, due to declining opportunities for younger men, not large gains for younger women.

Does the shrinking gender pay gap come from cohort turnover?

Core argument: The entire decline in the gender pay gap originates from newer cohorts entering the labor market with smaller-than-average gaps and older cohorts exiting with higher-than-average gaps, the authors find.

The whole decline in the [gender pay] gap originates from (i) newer worker cohorts who enter the labor market with smaller-than-average gender pay gaps and (ii) older worker cohorts who exit with higher-than-average gender pay gaps. The gender pay convergence at labor-market entry stems from younger men's larger positional losses in the wage distribution. Younger men experience the largest positional losses within higher-paying firms, in which they become less represented over time at a faster rate than younger women. Finally, we document that labor-market exit is the sole contributor to the decline in the gender pay gap after the mid-1990s, which implies no full gender pay convergence for the foreseeable future. Consistent with our framework, we find evidence that most of the remaining gender pay gap at entry depends on predetermined educational choices.

Takeaways by Macro Roundup® AI

  1. The entire decline in the gender pay gap originates from newer cohorts entering the labor market with smaller-than-average gaps and older cohorts exiting with higher-than-average gaps, the authors find.
  2. Gender pay convergence at labor-market entry stems from younger men's larger positional losses in the wage distribution, with the largest losses inside higher-paying firms, where younger men become less represented over time faster than younger women.
  3. Labor-market exit is the sole contributor to the decline in the gender pay gap after the mid-1990s, which the authors argue implies no full gender pay convergence for the foreseeable future, with most of the remaining entry gap depending on predetermined educational choices.

Related Articles:

  • Countries for Old Men: An Analysis of the Age Pay Gap — Administrative data on 38mm Italian and German workers show wages of older workers grew much faster than those of younger workers, a widening age pay gap the authors also find in fourteen other high-income countries. The authors argue workforce aging leaves fewer top hierarchy slots for younger workers, slowing promotions.
  • The ‘Gender Pay Gap’ Is a Myth That Won’t Go Away — The commonly cited figure that women earn 84% of men's pay compares average annual earnings of full-time, year-round workers, a category defined broadly enough to obscure differences in hours, experience, and occupation. Women over 40 average three fewer years of experience than men the same age, which the author says explains about a third of the gap.
  • Post-Pandemic Recovery for America’s Prime Age Labor Force: A Tale of Two Sexes — Prime-age women's labor force participation climbed about 5 points above its pre-pandemic level over a decade, while prime-age men's rose barely a point, only just regaining pre-pandemic levels. Despite economic expansion and labor shortages, work rates for prime-age American men are barely as high as at the trough of the severe Reagan-era recession.

AI Summary. The 10 largest US companies make up almost one-third of US equity market capitalization, a concentration not seen in decades. Historically, about half of each decade's largest companies underperform the market and drop out of the top 15 within a decade or two, and nearly all are eventually displaced.

Bob Prince, Khia Kurtenbach, Thomas Maisonneuve Bridgewater Associates
Date Posted:

The 10 largest firms currently constitute 1/3 of US equities market cap, and close to 20% of MSCI global market cap–the highest in over 50 years. Historically, about half of the market champions underperform the market over the next 10-20 years.

Do the largest companies keep their market dominance over time?

Core argument: The 10 largest US companies account for almost one-third of total US equity market capitalization, a degree of concentration not seen in decades.

One of the defining characteristics of the current market environment is the extent to which a few companies are dominating the top of the stack. The 10 largest US companies account for almost one-third of the US equities market cap—a degree of concentration we haven’t seen in decades. The chart illustrates the rise and fall of the largest companies by market cap across different decades (each gray line represents the market cap share of the champions at the start of each decade). Starting from the beginning of each decade, we show the change in market share for each cohort of champions in the years ahead. Over a subsequent decade or two, about half of the market champions underperform the market and fall out of the top 15 champions group. And over long periods of time, almost all champions are dethroned.

Takeaways by Macro Roundup® AI

  1. The 10 largest US companies account for almost one-third of total US equity market capitalization, a degree of concentration not seen in decades.
  2. About half of each decade's cohort of market champions underperform the market and drop out of the top 15 champions group within the following decade or two.
  3. Over long periods, almost all market champions are dethroned.

Related Articles:

  • Long-Term Shareholder Returns: Evidence From 64,000 Global Stocks — A study of about 64,000 global stocks estimates net global stock market wealth creation of $75.7tn, with returns highly concentrated: the top 159 firms (0.25%) account for half of net wealth creation and the top 1,526 (2.39%) account for all of it. Fewer than half of stocks beat one-month US Treasury bills, 42.6% of non-US and 44.8% of US stocks.
  • Stock Market Concentration — Over 2014–2023 the 10 largest U.S. stocks averaged 19% of market capitalization while generating 47% of total economic profit, and by 2023 they were 27% of market capitalization and 69% of economic profit. The S&P 500 returned above its average when concentration was rising and below it when concentration was falling.
  • The Concentration Conundrum; What To Do About Market Dominance — The largest US stocks make up a bigger share of the equity market than during the 2000 technology bubble, yet their valuations are lower than in earlier bubble episodes including the Nifty 50 of the early 1970s and Japan's late-1980s bubble. Today's dominant companies are also more profitable with stronger balance sheets.

AI Summary. A liquidity gauge for US government debt measures the average gap between quoted yields and values implied by fitted yield curves across Treasury notes and bonds with at least one year to maturity, and it indicates deteriorating liquidity. Small average yield errors signal favorable conditions, as mispricings are corrected quickly.

Torsten Sløk Apollo
Date Posted:

Torsten Sløk @apolloglobal argues that rising average yield-to-maturity error relative to yield curve expectations suggests deteriorating liquidity in Treasury markets.

Is liquidity deteriorating in Treasury markets?

Core argument: Liquidity in Treasury markets is deteriorating, according to an index of average yield errors across government notes and bonds with remaining maturity of one year or greater.

The index displays the average yield error [the difference between quoted yield-to-maturity and the expected value based on aggregate yield curves] across the universe of government notes and bonds with remaining maturity of one year or greater, based on the intra-day Bloomberg relative value curve fitter. When liquidity conditions are favorable, the average yield errors are small as any dislocations from fair values are normalized within a short time frame.

Takeaways by Macro Roundup® AI

  1. Liquidity in Treasury markets is deteriorating, according to an index of average yield errors across government notes and bonds with remaining maturity of one year or greater.
  2. The index measures the difference between quoted yield-to-maturity and the expected value based on aggregate yield curves, drawn from the intra-day Bloomberg relative value curve fitter.
  3. When liquidity conditions are favorable, average yield errors are small, as dislocations from fair values are normalized within a short time frame.

Related Articles:

  • CBO Releases June 2024 Baseline Update — The Congressional Budget Office projects federal spending of $84.9tn (24.1% of GDP) over the next decade against revenue of $62.8tn (17.8% of GDP), compared with 50-year averages of 21% and 17.3%. Interest costs are projected to reach $892bn, more than defense or Medicare, and grow to $1.7tn (4.1% of GDP).
  • Resilience Redux in the US Treasury Market — The authors argue that large, persistent US federal deficits and limited dealer balance-sheet flexibility will cause outstanding Treasury debt to grow rapidly relative to the market's capacity to intermediate trades, absent significant changes in market structure. They contend broad central clearing, all-to-all trading, real-time post-trade reporting, capital-regulation changes, and transparent official purchase programs could strengthen market capacity and resilience.
  • How Has Treasury Market Liquidity Evolved in 2023? — Treasury market liquidity has tracked its historical relationship with interest rate volatility, indicating liquidity has not been unusually poor given the level of rate volatility, though the two-year note shows somewhat higher-than-expected price impact. The market's capacity to smoothly handle large trading flows remains a concern for policymakers and market participants.

AI Summary. U.S. energy production rose 4% to nearly 103 quadrillion British thermal units while consumption fell 1% to 94, leaving production exceeding consumption by 9 quadrillion British thermal units, the widest gap in records dating to 1949. Dry natural gas, crude oil, natural gas plant liquids, and renewables all reached record output.

Brett Marohl Energy Information Administration
Date Posted:

US energy production hit a new record last year, driving a record surplus. Natural gas production was up 58% from 2013, and crude oil was up 69%. Renewables represented less than 8% of total 2023 US energy production. @eiagov

Is U.S. energy production outpacing consumption by a record margin?

Core argument: U.S. energy production rose 4% to nearly 103 quadrillion Btu in 2023 while consumption fell 1% to 94 quads, leaving production above consumption by 9 quads, the widest gap in records dating to 1949.

In 2023, energy production in the United States rose 4% to nearly 103 quadrillion British thermal units (quads), a record. Energy consumption in the United States fell 1% to 94 quads during the same period. Production exceeded consumption by 9 quads, more than at any other time in our records, which date to 1949. Dry natural gas production grew 4% to a record 39 quads in 2023, growing 58% since 2013. Crude oil production grew 9% from 2022 and reached a record of 27 quads in 2023, a 69% increase since 2013. Production of natural gas plant liquids, a byproduct of natural gas production, increased by 8% from 2022 to 8 quads in 2023. Natural gas plant liquids production has increased by 143% since 2013. Energy production from renewable sources increased 1% from 2022 to a record 8 quads in 2023, a 28% increase since 2013. U.S. energy consumption declined slightly in 2023.

Takeaways by Macro Roundup® AI

  1. U.S. energy production rose 4% to nearly 103 quadrillion Btu in 2023 while consumption fell 1% to 94 quads, leaving production above consumption by 9 quads, the widest gap in records dating to 1949.
  2. U.S. crude oil production grew 9% from 2022 to a record 27 quads in 2023, up 69% since 2013, while dry natural gas production grew 4% to a record 39 quads, up 58% since 2013.
  3. U.S. natural gas plant liquids production rose 8% from 2022 to 8 quads in 2023, up 143% since 2013, and renewable energy production rose 1% to a record 8 quads, up 28% since 2013.

Related Articles:

  • Electravision — The fossil fuel share of global primary energy is falling about 0.40% per year, matching the pace of decarbonization during the 1973–1988 nuclear buildout, though total carbon dioxide emissions have not declined because energy consumption keeps rising. Renewable energy is used almost exclusively for the electricity grid, with little penetration in industry and transport.
  • Electricity 2024 — More than 8,000 data centers operate globally, with about 33% in the United States, 16% in Europe, and close to 10% in China. US data center electricity use is projected to rise from roughly 200 TWh in 2022, about 4% of US electricity demand, to almost 260 TWh, or 6% of total demand.
  • US Shale: The Marginal Supplier Matures — The responsiveness of US oil supply to prices has declined and is estimated to be much smaller for publicly traded producers than private ones, with a 10% price increase raising US liquids output by roughly 1%, or 200,000 barrels a day. That implies US supply would offset only about 20-25% of a geopolitical supply shock.

AI Summary. Over half of the world's 1.6bn air conditioners are in just two countries, China with 570m units and the United States with 375m, and nearly 70% of all units globally are in residential buildings. Household ownership ranges from about 4% in India and under 10% in Europe to over 90% in the United States and Japan.

International Energy Agency Brian Dean, John Dulac, Trevor Morgan and Uwe Remme
Date Posted:
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Database

As of 2016, 90% of US and Japanese households are equipped with air conditioning, compared with 60% in China, 10% in Europe, and 4% in India. @iea

How concentrated is global air conditioner ownership across countries?

Core argument: Of the 1.6 billion air conditioners in use worldwide at the end of 2016, over half were in China (570 million units) and the United States (375 million units).

Of the 1.6 billion ACs in use throughout the world at the end of 2016, over half were in just two countries: China, which has 570 million units, and the United States, where there are 375 million. Other countries with more than 20 million units include Japan, with 150 million, Korea (60 million), Brazil and India (both nearly 30 million). The remaining ACs are mostly in the European Union, where there are nearly 100 million units, and the Middle East (around 50 million units). Nearly 70% of all the ACs globally is in residential buildings. Household ownership of ACs varies enormously across countries, from around 4% in India and less than 10% in Europe, to over 90% in the United States and Japan, and close to 100% in a few Middle Eastern countries. In China, nearly 60% of households now have at least one AC.

Takeaways by Macro Roundup® AI

  1. Of the 1.6 billion air conditioners in use worldwide at the end of 2016, over half were in China (570 million units) and the United States (375 million units).
  2. Household air conditioner ownership ranges from around 4% in India and under 10% in Europe to over 90% in the United States and Japan and close to 100% in a few Middle Eastern countries, with nearly 60% of Chinese households owning at least one.
  3. Nearly 70% of air conditioners globally are in residential buildings, and other sizable stocks include Japan (150 million units), the European Union (nearly 100 million), Korea (60 million), and the Middle East (around 50 million).

Related Articles:

  • Electravision — The fossil fuel share of global primary energy is falling about 0.40% per year, matching the pace of decarbonization during the 1973–1988 nuclear buildout, though total carbon dioxide emissions have not declined because energy consumption keeps rising. Renewable energy is used almost exclusively for the electricity grid, with little penetration in industry and transport.
  • Electricity 2024 — More than 8,000 data centers operate globally, with about 33% in the United States, 16% in Europe, and close to 10% in China. US data center electricity use is projected to rise from roughly 200 TWh in 2022, about 4% of US electricity demand, to almost 260 TWh, or 6% of total demand.

Thursday, June 27, 2024

AI Summary. Only 20% of the variation in firms' perceived cost of capital is justified by their true cost of capital, with the rest consistent with managerial mistakes. The authors estimate that the resulting capital misallocation lowers long-run aggregate productivity by 5% in a benchmark model.

Niels Joachim Gormsen and Kilian Huber National Bureau of Economic Research
Date Posted:
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Public company managers’ conference call comments about their cost of capital vary widely from its actual cost; 80% of the variance suggests managerial error. Those who perceive higher capital cost invest less, reducing TFP by 5%. @NielsGormsen

Do managers' misperceptions of their cost of capital reduce aggregate productivity?

Core argument: Only 20% of the variation in firms' perceived cost of capital is justified by variation in the true cost of capital determined by risk premia and interest rates, with the remaining 80% consistent with managers making mistakes.

We study hand-collected data on firms’ perceptions of their cost of capital. The perceived cost of capital is partially related to the true cost of capital, which is determined by risk premia and interest rates, but there are also large deviations between the perceived and true cost of capital. Only 20% of the variation in the perceived cost of capital is justified by variation in the true cost of capital. The remaining 80% reflects deviations that are consistent with managers making mistakes. We find that, in the long run, firms with a higher perceived cost of capital have a higher return on invested capital, lower investment rate, and lower capital-labor ratio. These results suggest that the perceived cost of capital reported on conference calls is used for long-run capital allocation in line with standard models. The deviations lead to misallocation of capital that lowers long-run aggregate productivity by 5% in a benchmark model. Forcing all firms to apply the same cost of capital would improve the allocation of capital relative to current corporate practice.

Takeaways by Macro Roundup® AI

  1. Only 20% of the variation in firms' perceived cost of capital is justified by variation in the true cost of capital determined by risk premia and interest rates, with the remaining 80% consistent with managers making mistakes.
  2. Firms reporting a higher perceived cost of capital on conference calls have, in the long run, a higher return on invested capital, a lower investment rate, and a lower capital-labor ratio, in line with standard models of capital allocation.
  3. Deviations between perceived and true cost of capital lead to capital misallocation that lowers long-run aggregate productivity by 5% in a benchmark model, and forcing all firms to apply the same cost of capital would improve allocation relative to current corporate practice.

Related Articles:

  • Cost of Capital and Capital Allocation: Investment in the Era of “Easy Money” — The authors estimate that the weighted average cost of capital for Russell 3000 companies averaged 6.9% during the 2009-21 era of easy money versus 7.5% in the prior period, while the aggregate return on invested capital averaged 9.5% versus 9.2%. The resulting spread between returns and the cost of capital averaged 2.6 percentage points versus 1.7 points earlier.
  • Data Update 4 for 2024: Risk Enters the Equation — Across a universe of 47,698 companies, the median cost of capital for a US company is estimated at 7.9%, down from 9.6% a year earlier entirely because of declines in the price of risk, namely equity risk premiums and default spreads, though still above a historic low of 5.8%.
  • Corporate Discount Rates — The authors estimate that a 1 percentage point increase in a firm's perceived cost of capital raises its discount rate by only 0.3 percentage points, with 40% of firms leaving discount rates unchanged even over a decade. Larger gaps between discount rates and the perceived cost of capital are associated with lower investment rates.

AI Summary. An analysis of the National Survey of College Graduates finds that only 41% of international students who graduated from American universities between 2012 and 2020 were still living in the country as of 2021, including 17% of bachelor's degree recipients. Scarce visas for skilled workers are cited as one reason.

Connor O’Brien Economic Innovation Group
Date Posted:
Is Database:
Database

According to a @cojobrien analysis of foreign students graduating from US universities from 2012-20, only 17% of BA recipients remained in the US, vs. 51% of Master’s and 76% of PhD recipients.

Do most international graduates of American universities leave the country?

Core argument: Only 41% of international students who graduated from American universities between 2012 and 2020 still lived in the U.S. as of 2021, according to an analysis of the National Survey of College Graduates.

American universities graduate approximately 250,000 international students each year. Yet most of these students do not remain in the United States long-term, in part due to scarce visas available for skilled workers. Between undergraduate and graduate degree programs, only 41% of international students graduating from American universities between 2012 and 2020 still lived in the country as of 2021, according to an analysis of the National Survey of College Graduates. More than four out of every five foreign-born bachelor’s degree recipients ultimately move away after graduation. Only 17% of bachelor’s degree recipients stay. Half of master’s degree recipients and one-quarter of PhD recipients also leave.

Takeaways by Macro Roundup® AI

  1. Only 41% of international students who graduated from American universities between 2012 and 2020 still lived in the U.S. as of 2021, according to an analysis of the National Survey of College Graduates.
  2. Just 17% of foreign-born bachelor's degree recipients stay in the U.S. after graduation, while half of master's degree recipients and one-quarter of PhD recipients leave.
  3. American universities graduate roughly 250,000 international students annually, and most do not remain in the United States long-term, in part because visas for skilled workers are scarce.

Related Articles:

  • Top Talent, Elite Colleges, and Migration: Evidence from the Indian Institutes of Technology — Among top scorers on India's Joint Entrance Exam for the Indian Institutes of Technology, 62% of the top 100 and 36% of the top 1,000 migrated abroad within eight years, primarily to the U.S. for graduate school. The authors argue elite schools shape migration by signaling ability and providing access to networks.
  • Third-Country Effects of U.S. Immigration Policy — U.S. H-1B visa denial rates rose from about 6% to 16%, and the authors estimate a 10 percentage point rise in denials increases Canadian applications by 30%, roughly one Canadian application per four forgone visas. More exposed Canadian firms increased sales and hired about 0.5 native workers per immigrant.
  • The Global AI Talent Tracker 2.0M — The United States remains the leading destination for the world's most elite AI talent and hosts 60% of top AI institutions. China's share of top AI researchers working domestically rose from 29% in 2019 to 47% in 2022, and India retained one-fifth of its top AI researchers in 2022 versus nearly none in 2019.

AI Summary. Saudi Arabia has no surplus left to recycle and is instead borrowing heavily in sovereign debt markets and selling assets, including stakes in its national oil company, to fund its economic plans. The International Monetary Fund projects the Saudi current account surplus narrowing to 0.5% of GDP before shifting into deficit through the end of the decade.

Javier Blas Bloomberg
Date Posted:

Saudi Arabia’s current account surplus will be just 0.5% of GDP this year before shifting into deficit in 2025 and for the rest of the decade. “The country is borrowing heavily and selling assets to finance its grand economic plans.” @JavierBlas

Is Saudi Arabia now borrowing and selling assets instead of recycling surpluses?

Core argument: Saudi Arabia's current account surplus will narrow to 0.5% of GDP this year, down from a peak of 50% of GDP, according to the International Monetary Fund.

Saudi Arabia doesn’t have a surplus to recycle at all. Instead, the country is borrowing heavily in the sovereign debt market and selling assets, including chunks of its national oil company, to finance its grand economic plans. From a peak of 50% of its GDP, the Saudi current account surplus will narrow to just 0.5% this year, according to the International Monetary Fund, before shifting into deficit as soon as 2025 and until the end of the decade. If confirmed, it would be the longest current-account deficit for the kingdom since Riyadh flooded the market in 1986, triggering a price collapse.

Takeaways by Macro Roundup® AI

  1. Saudi Arabia's current account surplus will narrow to 0.5% of GDP this year, down from a peak of 50% of GDP, according to the International Monetary Fund.
  2. The International Monetary Fund projects Saudi Arabia shifting into current-account deficit as soon as 2025 and remaining there until the end of the decade, which would be the kingdom's longest such stretch since 1986.
  3. Saudi Arabia is financing its economic plans by borrowing heavily in the sovereign debt market and selling assets, including chunks of its national oil company, rather than recycling a surplus.

Related Articles:

  • OPEC+ Says Goodbye to Its $100-a-Barrel Oil Quest — OPEC+, led by Saudi Arabia and Russia, agreed to extend its layered production cuts while allowing members to begin adding barrels back to the market, with larger increases to follow. The International Monetary Fund estimates Saudi Arabia needs oil above $96 a barrel to balance its budget, versus an $80 average from 2000 to 2020.
  • Megaprojects in the Desert Sap Saudi Arabia’s Cash — Saudi Arabia's spending on megaprojects has risen while oil revenues have leveled off, and the International Monetary Fund estimated oil prices near $80–$86 a barrel would be needed to balance its budget. The kingdom is expected to run a deficit of about $21bn, roughly 2% of gross domestic product.
  • Saudi Arabia’s PIF and the New Petrodollar Recycling — Saudi Arabia's Public Investment Fund appears to have taken over a significant portion of the foreign asset allocation previously handled by the Saudi Central Bank, making its balance sheet a window into a new form of petrodollar recycling. Of roughly $777bn in total assets, $305bn were current and $472bn non-current, with $225bn of the latter held as investment securities.

AI Summary. A New York Times/Siena College national poll found Trump ahead of Biden by six percentage points among registered voters and three among likely voters, well outside the average of polls, which showed Trump up by one point. The authors argue poll averages are a safer measure, though outlier results are sometimes right.

Nate Cohn New York Times
Date Posted:

In a NYT/Siena poll published June 26, Trump is leading Biden by 3pp among likely voters and 6pp among registered voters, his best result in a reputable national survey in months. An average of polls shows Trump up by 1pp.

Are poll averages more reliable than individual outlier surveys?

Core argument: A June 26 New York Times/Siena College poll found Trump ahead by six percentage points among registered voters and three points among likely voters nationally, his best result in a reputable national survey in months.

[A June 26] New York Times/Siena College poll doesn’t look much like other polls. It finds Trump ahead by six percentage points among registered voters and three points among likely voters nationally. That’s his best result in a reputable national survey in months. You have to go back to a CNN/SSRS poll in April to find something showing him ahead by six points with registered voters. (A Quinnipiac poll today found Trump up by four among registered voters.) When outlier results come around, it’s generally better to look at the average of polls. As it happens, we released our poll averages for the cycle on Monday: Mr. Trump is ahead by one point over President Biden after including the latest Times/Siena poll. That’s a safer measure of where the race stands. But that doesn’t necessarily mean the poll should be tossed out altogether. Sometimes, the outliers are right.

Takeaways by Macro Roundup® AI

  1. A June 26 New York Times/Siena College poll found Trump ahead by six percentage points among registered voters and three points among likely voters nationally, his best result in a reputable national survey in months.
  2. The New York Times poll averages for the cycle, including the latest Times/Siena poll, put Trump ahead of President Biden by one point, which the Times calls a safer measure of where the race stands.
  3. A CNN/SSRS poll in April showed Trump up six points among registered voters, and a Quinnipiac poll found him up four points among registered voters.

Related Articles:

  • The Road to A Political Realignment in American Politics — College-educated voters are now more likely to identify as Democrats while those without degrees back Republicans, with educational attainment increasingly correlated with views on abortion, LGBTQ+ rights, and religion's relationship to government. This sorting leaves most states politically uncompetitive, with eight states near the national average in education levels holding 97 electoral votes in play.
  • If Everyone Voted, Would Biden Benefit? Not Anymore — Polling indicates infrequent, less engaged voters now favor the Republican presidential candidate, a reversal that would mean higher turnout benefits Republicans rather than Democrats. In Pennsylvania, new registrants under automatic voter registration have affiliated with Republicans over Democrats by six percentage points.
  • The Shaky Foundation of Trump’s Lead: Disengaged Voters — Polling shows Trump's narrow national lead is built on gains among voters who pay little attention to politics, don't follow traditional news, and don't vote regularly, while Biden leads among those who voted in the prior presidential election. Almost all of Trump's gains have come from these less engaged voters.

AI Summary. A presidential election model's simulations show that a candidate who loses Georgia, Arizona, and Nevada must sweep Michigan, Wisconsin, and Pennsylvania, which are correlated but differ in rural share and demographics. The simulations have him winning at least one of the three 54% of the time but all three only 32%.

Nate Silver Silver Bulletin
Date Posted:

The first run of the @NateSilver538 model gives Trump a 65.7% probability of winning the Electoral College and a 49% probability of winning the popular vote. The model gives only a 32% probability of Biden sweeping PA, MI, and WI.

How much harder is sweeping three correlated states than winning one?

Core argument: Biden wins all three of Michigan, Wisconsin, and Pennsylvania in only 32% of the model's simulations, versus 54% for winning at least one of them.

If Biden loses Georgia, Arizona, and Nevada — and he trails badly in each — he’ll need to win all three of Michigan, Wisconsin, and Pennsylvania and not just one of them. Even though these states are pretty heavily correlated, they aren’t perfectly correlated. Winning several different correlated bets is still hard. (Just ask the DraftKings how it makes so much money on same-game parlays.) And these states do have some differences with one another: Wisconsin is more rural, for instance, and Michigan has the largest Arab/Muslim/Palestinian population. In our simulations, Biden wins at least one of these states 54% of the time. But he wins all three of them in only 32% of simulations. This is the sort of precision that a model can provide that your intuition really can’t.

Takeaways by Macro Roundup® AI

  1. Biden wins all three of Michigan, Wisconsin, and Pennsylvania in only 32% of the model's simulations, versus 54% for winning at least one of them.
  2. Trailing badly in Georgia, Arizona, and Nevada, Biden would need to sweep Michigan, Wisconsin, and Pennsylvania rather than win just one of them.
  3. Michigan, Wisconsin, and Pennsylvania are heavily but imperfectly correlated, with Wisconsin more rural and Michigan home to the largest Arab/Muslim/Palestinian population.

Related Articles:

  • The 2024 Election Won’t Be Up To the Same Voters Who Chose Biden — States gained more than 31m newly eligible voters — people who moved from another state, turned 18, or became naturalized US citizens — with migration between states the largest factor, according to a Bloomberg News analysis of government and private data. In all seven swing states, newly registered voters outnumber the prior presidential margin of victory.
  • If Everyone Voted, Would Biden Benefit? Not Anymore — Polling indicates infrequent, less engaged voters now favor the Republican presidential candidate, a reversal that would mean higher turnout benefits Republicans rather than Democrats. In Pennsylvania, new registrants under automatic voter registration have affiliated with Republicans over Democrats by six percentage points.
  • The Shaky Foundation of Trump’s Lead: Disengaged Voters — Polling shows Trump's narrow national lead is built on gains among voters who pay little attention to politics, don't follow traditional news, and don't vote regularly, while Biden leads among those who voted in the prior presidential election. Almost all of Trump's gains have come from these less engaged voters.