So a pretty weak Democrat won the Virginia governor’s race by 2.5 percentage points in what is still mostly a red state. Conclusion: the election was a repudiation of the Democrat?! And thus it is with the pundit class the day after the election. They seem to have lost their grip on what they are doing. Perhaps they think elections are like the stock market.

Here’s how this works. If a company’s quarterly profits turn out to be less than expected, the stock price goes down. This is because the going price for the stock was based on the belief that the company was making more money than it actually was. This is completely reasonable. But it is nothing like an election.

In the case of elections, the expectation means nothing. The only previous voting that took place was the last election. So the “correction” is the new election. In Virginia, it no doubt feels good to Cuccinelli supporters that he didn’t lose by as much as the polls suggested two days ago. On the other hand, one year ago, the polls suggested Cuccinelli would win. And the last Virginia government was Republican. Based upon those expectations, Cuccinelli did really poorly.

Still, it’s interesting to look at why Terry McAuliffe did worse in the election than the polls indicated. But it’s not interesting because it indicates that Cuccinelli did well because he didn’t; Cuccinelli was decisively beaten in an election where the fundamentals favored him. But it is interesting because the difference between elections and polls tells us things about voting patterns.

Jonathan Bernstein noticed something really interesting from the Virginia exit polling. The libertarian candidate in the race under-performed even more than McAuliffe. It seems that the supporters of the libertarian candidate were divided between conservatives and liberals. The conservative ones decided to go ahead and vote for Cuccinelli. The ones who stayed with the libertarian candidate would have voted overwhelmingly for McAuliffe if they only had the two major party candidates. So what it likely means is that the McAuliffe libertarians felt they were safe to make a protest vote without getting stuck with Cuccinelli.

If the libertarian candidate had done as well as expected, the Virginia race would have turned out exactly as the more recent polls suggested. Or to look at it differently, if 60% of those who voted for the libertarian had gone for McAuliffe, he would have won by 4 percentage points—just what we expected. What it shows is just how dangerous third parties can be in first-past-the-post voting systems. Had the libertarian contingent been larger, the strong public polling might have caused Virginia to end up with Cuccinelli as governor, even though a majority of voters wanted McAuliffe.

Regardless of all this, the facts in this election are very clear. McAuliffe won the election by 2.5 percentage points. The Republicans should have maintained control of the governorship. As it is, they lost as governor, lieutenant governor, and maybe even attorney general. This is a huge loss for the Republican Party in Virginia and it is madness that anyone is saying otherwise.