Nice post by Seth Masket a couple of days ago in which he uses the consensus forecast from a bunch of economists to plug into models which predict the election based on the economy. The result: Obama with 50.03%. Yikes! Here’s Seth:
When I’m asked whether I expect President Obama to get reelected, I often look around to see if there’s an economist nearby to tell me how the economy is going to be doing next year. Well, here are some economists now, in the form of USA Today’s survey of 39 economists. Unfortunately for my purposes, they don’t forecast real disposable income, which is probably the most reliable predictor of presidential elections, but they do use gross domestic product, which is the next best thing. Their average projection of GDP growth from the fourth quarter this year to the third quarter next year is 2.53 percent. How does that stack up with economic growth and electoral performance in previous years?
Well, if we use this metric and the USA Today forecast, Obama will be facing lower economic growth than what Bush faced in ’92 and his son faced in ’04. That’s real nail-biter territory. The regression line suggests Obama getting 50.9 percent of the vote, although, as the graph shows, that line is being pulled upward a bit by Eisenhower’s unexpectedly good performance in 1956. If you take out that case, the Obama forecast is 50.03 percent of the vote. In other words, don’t expect to get a lot of sleep on election night next year.
Interestingly, after a fairly strong run, the Intrade predictions markets are coming to a fairly similar conclusion about Obama. Check out this chart:
Right now, he’s at about 52%. I assume that absolute minimum is right after the debt ceiling deal, from which he’s recovered a hair. Notably, though, a clear, strong drop since this Spring (you can also see a nice, clear, Osama Bin Laden spike).
Here’s the takeaway you should have from this. The campaigns will matter in 2012. Yeah, the economy is very important and sets the basic parameters. But it is almost certain to set those parameters in a range where what happens out there on the campaign trail– and more importantly, how the mass media actually report– will determine the election. In 1984, 1988, 1996, and probably 1992 as well, so long as the economically-favored candidate ran a reasonable campaign, he was going to win. This time around, as with the 2000 (quite arguably Gore “lost” because he failed to run a reasonable campaign) and 2004, it really matters what Obama does next year versus what I assume will be Perry or Romney (though, man, am I rooting for Bachmann, as that sure pulls up Obama’s odds).