Are Mitt Romney, Rick Santorum, Newt Gingrich, and Ron Paul—not to mention Republican voters across the nation—wasting their time today on Super Tuesday? Washington insiders from both parties think that with the formerly moribund economy finally picking up, the election is President Obama’s to lose. It’s an opinion reflected in political betting markets such as Intrade, which currently gives Obama around a 60 percent chance of winning a second term.
But does a mild economic recovery really guarantee Obama four more years? I looked at three election forecasting models that key off the economy. Two of them give the election to the GOP, one to Obama. But they’re all real close. And, of course, different economic forecasts produced different results. So when possible, I assumed a so-so recovery, though better than what we saw in 2011.
1. The Yahoo! model. Yahoo! Labs economists Patrick Hummel and David Rothschild have devised a model that they say would have correctly predicted the winner in 88 percent of the 500 individual state elections during the past 10 presidential elections. (Note: That sounds incredibly impressive, but recall that there are relatively few swing states in any given election year.)
The Yahoo! model assumes the following: a) Obama’s approval rating will stay the same between now and mid-June, b) each of the 50 states will report personal income growth that’s average for an election year, and c) that certain key indicators of state ideology will remain unchanged this year.
The Yahoo! model currently predicts that Obama will win 303 electoral votes in November. But as the chart below shows, states such as Virginia, Ohio, New Hampshire, and Colorado could go either way.
The economists speak at length about the inner working of their model over at IEEE Spectrum magazine. In that interview, they said that a separate model shows the Senate “is heavily likely to go to the Republicans at this point.”
2. The Ray Fair Model. The key variables for the Yale economics professor are economic growth (growth rate of real per capita GDP in the first 3 quarters of 2012), inflation (growth rate of the GDP deflator in the first 15 quarters of the Obama administration), and the number of “good news” quarters (number of quarters in the first 15 quarters of the Obama administration in which the growth rate of real per capita GDP is greater than 3.2 percent at an annual rate). Assuming 3 percent overall GDP growth and continued low inflation, Obama would receive 48.9 percent of the two-party vote, losing to the GOP nominee. (Congressional Democrats would do even worse).
3. The Bread and Peace model. Political scientist Douglas Hibbs looks at two factors: a) per capita real disposable personal income over the incumbent president’s term, and b) cumulative U.S. military fatalities in overseas conflicts. If the election were held today, Hibb’s model projects Obama would receive just 45.5 percent of the two-party vote.
But the election is not being held today. Hibbs:
… what really matters for Obama’s re-election prospect is the over-the-term performance record at Election Day in 2012, not the notional vote share implied by conditions at the end of 2011. I’ll make the plausible assumption that American military fatalities in President Obama’s “war of necessity” in Afghanistan continue running at the (politically relatively low) average quarterly rate of the past two years — 115 or 0.37 per million of population … a number that would detract only negligibly from Obama’s expected two-party vote share: -0.25 percentage points.
Hibbs’s conclusion (bold for emphasis):
Given my assumption about the flow of fatalities in Afghanistan, growth rates of per capita real disposable personal income during the remainder of the term will be the deciding, as yet unrealized fundamental factor in the 2012 presidential election. Calculations shown in the table [above] indicate that per capita real income growth must average out at an annualized rate of more than 4 percent per quarter until the end of the term in order for Obama to have a good chance of re-election. …
The statistical properties of the time path of US per capita real disposable personal income indicate that the chances of a year-long run of quarterly growth rates on the order of 4% or higher are no better than 1/7. I judge it likely that real income growth rates during coming quarters will be in the vicinity of 2%, yielding Obama an expected two-party vote share of around 48% (shown by gray shading in the table above).
(Now, if you are trying to create your own model, here’s an analysis of 43 economic variables and their impact on presidential election results.)
So unless we are about to see a 1984-style economic boom, the 2012 Republican presidential nomination definitely looks like it is still worth fighting for.