Is Steve M at No More Mister Nice Blog right when he says, This Election Is Going to Be a Nail-Biter? He’s looking at the recent polls that show Donald Trump gaining on Hillary Clinton. Now I don’t think polls mean much right now. But I do keep remembering back to 1980, when Democrats were happy that they were going to be running against the extremist Ronald Reagan. And the data we have indicates that economic considerations account for about half of the outcome in a presidential election. So I thought it might be a good time to discussion some election fundamentals.
Polls Don’t Mean Much Now
Before I get to that, Steve M is being a bit silly. It’s not just that it is way early in this election. It is also that the timing is bad. We just came off the whole “rigged system” narrative that the right wing has been pushing about Clinton not getting indicted. Very few people even know what the issue is, but there is a tendency for people to think that smoke implies fire. We may be innocent until proven guilty in court, but in most people’s minds, we are guilty until proven innocent.
And let’s be prepared for things to get worse. The RNC is next week and that always gives candidates a bump. Just remember that Michael Dukakis had a 15 percentage point lead over the elder Bush after the DNC in 1988. And Dukakis went on to lose California — and didn’t win New York by all that much (4 percentage points — compared to the 28 that Obama beat Romney by in 2012). So we should all calm down.
Election Fundamentals Tell Us More
But to be honest, I haven’t liked what I’ve seen in the election fundamentals either. My simple model just looks at the trend of the unemployment rate (U3) in the first 10 months of the election year. If the trend is negative (unemployment is going down), it is good news for the party in power. If it is positive, it is good news for the party in opposition. And look at what we have for the first six months of this year:
- Jan: 4.9
- Feb: 4.9
- Mar: 5.0
- Apr: 5.0
- May: 4.7
- Jun: 4.9
To the naked eye, it looks flat, because when it comes to trends, we tend to look at the first and last numbers and go with that. But right now, this is a distinctly negative trend -0.017% per month. I know that doesn’t mean much without context. So here’s some context:
- 1988 (Bush-Dukakis): -0.033;
- 1992 (Bush-Clinton): +0.021;
- 1996 (Clinton-Dole): -0.50;
- 2000 (Gore-Bush): -0.007;
- 2004 (Bush-Kerry): -0.033;
- 2008 (McCain-Obama): +0.179;
- 2012 (Obama-Romney): -0.046.
Hillary Clinton Is Winning
So right now the election fundamentals favor Hillary Clinton by just about the same amount as they favored Bill Clinton when he was first elected in 1992. And she’s doing considerably better on the election fundamentals than Mr Gore in 2000. If I had to pick between polls after a bad news cycle for Clinton and the economics at play, I would go for the economics.
Of course, the election fundamentals could change. Although Alan Greenspan was willing to let the unemployment rate get all the way down to 3.9%, it does not seem that the current Fed Chair Janet Yellen is. For years, the Fed has been itching to raise interest rates to slow our already anemic recovery. But I think the worst that will happen is that the unemployment rate trend will be flat. Unless something horrible happens, it is unlikely to go in Donald Trump’s favor.
What that means is that Donald Trump is going to have to make this election about something other than the economy. And that will be hard to do given that a bad economy is the basis of pretty much his entire campaign. The wall? The racism? China? It’s all based on economics. So it’s actually looking pretty good for Hillary Clinton right now. And I didn’t think that before I started writing this article.
This should have been a remarkably close race and Gore should have won. I still count it as a victory. Gore did win. Just because there was a legal coup doesn’t change that fact.