It’s Going To Be a Long Election Night

Mark July 27 down on your calendar. That’s when the first estimate of U. S. 2nd quarter GDP growth for 2012 is scheduled to be released. At Larry Sabato’s Crystal Ball, Alan Abramowitz uses his model to predict the popular vote percentages for the presidential election. His model is based on just four factors: the president’s net approval rating as measured by the final June Gallup poll, the annualized growth rate of real GDP in the second quarter, the presence or absence of a first term incumbent in the race, and a heuristic factor for party polarization using elections since 1996. That last factor was added because the power of incumbency has, apparently, declined from what it used to be. He remarks:

A growth rate of zero or less predicts a narrow popular vote win for Republican challenger Mitt Romney, while a growth rate of 1% or greater predicts a popular vote win for President Obama. The consensus prediction of economic forecasters for real GDP growth in the second quarter is currently about 2.0%. This growth rate would predict a narrow reelection win for President Obama with slightly less than 51% of the major party vote.

4 comments… add one
  • I guess campaign season is starting in full swing. Three calls today on my cell phone here in Florida – 1 from the President’s local campaign, and two from some sort of polling/advocacy groups.

  • Icepick Link

    Here’s some fun economic news:

    A report from the Federal Reserve Bank of New York suggests that the bulk of equity returns for more than a decade are due to actions by the US central bank.

    Theoretically, the S&P 500 [.SPX 1334.76 -6.69 (-0.5%) ] would be more than 50 percent lower—at the 600 level—if the bullish price action preceding Fed announcements was excluded, the study showed.

  • Ben Wolf Link

    I’m highly skeptical that the revised number will show growth of 2%. Better than 1%, but almost certainly not that high. I’m particularly concerned by the fall in Treasury yields. The 10 year Treasury has fallen to below 1.52%, which in my opinion means the bond market is exceptionally worried about deflationary pressures.

  • Roy Lofquist Link

    The fatal problem for this kind of analysis is that it is entirely too short range. The recent major shifts in political power in the US – 1932, 1952, 1964, 1980, 1994 and 2010 – appear to be generational, as do major military conflicts (average about a 20 year gap).

    I distinctly remember the 1980 election where Carter led Reagan in the polls until the day before the election. There is a wave coming in November and it’s a big one.

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