Fools and their money

Michael Barone takes a penetrating look at the presidential race in Pennsylvania, where John McCain and Sarah Palin have devoted plenty of energy but apparently don’t have much to show for it.

The Republicans liked their prospects in Pennsylvania this year because they expected Barack Obama to encounter resistance from blue collar voters in the Southwest (the Pittsburgh area) and the Northeast (e.g., Scranton), which traditionally are Democratic strongholds. Based on polling data, Barone finds that McCain actually is running well in these areas.

Why, then, is he trailing in the state by (as best as one can tell) roughly seven percentage points? According to Barone, it’s because Obama is running better than normal in the Philadelphia area. Specifically, “the Philly suburbs are about to give Obama a significantly larger percentage than the 53 percent John Kerry won there in 2004.”

But why? Barone speculates it’s because this is where “recent decline in household wealth has been most conspicuous.” Housing prices, he says, “mean a lot more to you when your house started off at $400,000 and declined to $290,000 than they did when you started off (as may be typical of Scranton or a blue-collar town in metro Pittsburgh) at $140,000 and declined to $110,000.” Stated differently:

Folks in Scranton didn’t expect to live comfortably ever after off their increased house values, 401(k)’s, and Merrill Lynch accounts; a $700 monthly check from Social Security is about what they have long expected and that’s not in danger (yet). Folks in the Philly suburbs did expect to live comfortably off such assets.

It’s odd that people would vote against John McCain because the present value of their house declined. It’s even more odd that voters preoccupied with wealth accumulation would favor a candidate who promises to redistribute their money. But this doesn’t mean Barone is wrong. I suspect, in fact, that he’s right.

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