These Folks Already Know Who Will Win
So, who's going to win the November election? Current political punditry calls for a Bush-Dean matchup, with the incumbent the victor. "Bush has a lot going for him with the economy right now," says Nigel Gault, U.S. economic research director at Global Insight. "That puts him in a similar position to Nixon and Reagan in 1972 and 1984, both of whom won overwhelming victories."
But Gault and others rely on more than the shifting political winds to make their predictions. Gault's analysis of the 14 presidential elections since World War II found that two key economic factors matter most in determining winners and losers. The first is the growth rate in real per capita disposable income in the year preceding a presidential election. The second factor is the direction of the unemployment rate in the year before the election. Plugging in his firm's forecast of a 2.4 percent income growth rate in 2004 with a jobless rate of 5.7 percent gives Bush 56.7 percent of the vote in 2004. (In 2000, the model had Al Gore winning with 51.8 percent of the two-party vote, pretty close to Gore's actual 50.3 percent share.)
Lower the assumptions and the margin of victory shrinks. With income growth of only 1.4 percent and a jobless rate of 6.2 percent, Bush's vote tally falls to 54.3 percent. So how could Bush lose? Combine weak GDP growth with robust productivity increases resulting in less than 1 percent income growth and an unemployment rate of 7.9 percent. Then, Bush loses narrowly, with 49.4 percent of the vote.
Yale University Prof. Ray Fair also counts on a Bush win. He looks at a combination of income growth rate, inflation, and the number of quarters of rapid income growth in the first 15 quarters of a president's term. Fair sees Bush garnering 58.3 percent of the two-party vote. -James M. Pethokoukis
This story appears in the January 19, 2004 print edition of U.S. News & World Report.
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