Tuesday, June 7, 2011

Economic Shadows and the 2012 Election

The Washington Post reports on a new poll:

Overall, about six in 10 of those surveyed give Obama negative marks on the economy and the deficit. Significantly, nearly half strongly disapprove of his performance in these two crucial areas. Nearly two-thirds of political independents disapprove of the president’s handling of the economy, including — for the first time — a slim majority who do so strongly.

In another indicator of rapidly shifting views on economic issues, 45 percent trust congressional Republicans over the president when it comes to dealing with the economy, an 11-point improvement for the GOP since March. Still, nearly as many, 42 percent, side with Obama on this issue.

At the Five Thirty-Eight blog, Nate Silver writes about the ten words that could harm President Obama's reelection chances. At his 1980 debate with President Carter, Ronald Reagan asked (perhaps at the suggestion from Newt Gingrich): "Are you better off than you were four years ago?” Silver writes:

If there is a credible case to be made that the economy is getting better — when coupled with what is likely to be a strong case on foreign policy — then Mr. Obama is likely to be given the benefit of the doubt by voters. But if you instead see the White House spending more of its time blaming Mr. Bush for the state of the economy, that’s a sign that they’re afraid of Mr. Reagan’s question — and may have reached a stage where they’re the underdogs in the race.

Dartmouth student Harry Joe Enten writes at his blog about new data from the Bureau of Economic Analysis (BEA):

Many analysts will point to the lack of upward revision in Gross Domestic Product (GDP) and poor Unemployment as bad, but of far greater importance to President Obama's re-election hopes is the tumble in real disposable personal income per capita (RDPI).

According to the BEA's prior April report, RDPI grew at 1.8% in the fourth quarter of 2010 over the preceding quarter and 2.9% in the first quarter of 2011. Last Friday, the BEA re-adjusted those numbers to 1.1% and 0.8%.

Why should the President be worried?

It turns out that weighted* quarterly growth in RDPI (along with three other already known variables* for the 2012 election) over the President's term can account for 92.9% of the variation in the incumbent party's percentage of the two-party vote in the 1952-2008 Presidential Elections.