Why The Democrats Will Win In ’08

December 23, 2007 at 9:59 am  ·  Category: Politics

Greg Mankiw, Harvard Economist and former member of the Bush economic team, put a post up on his blog linking to a study with a chart showing the relationship between % of the vote received by incumbents and economic growth.  (The only thing I don’t like about the chart is that it uses average economic growth over the previous 4 years where I’d like to see economic growth in the election year)(hat tip Abnormal Returns).

With the economy set to tank next year, Bush will take the blame and voters will likely elect a Democtrat as a result.

Add in the continuing debacle in Iraq (The Bread And Peace Model of Presidential Voting) and a Democratic win seems all but certain.

Prediction markets suggest the same with InTrade showing investors, who wager real money, putting a 61% chance on a Democratic win – versus 37% for a Republican.

That probably means Hilary in the White House in ’09 – as InTrade investors give her a 62% chance to win the Democtratic nomination versus 30% for Obama.

Posted by Greg Feirman  ·  Trackback URL  ·  Link
No Responses to “Why The Democrats Will Win In ’08”
  • Looking at his graph, it’s interesting how the data from the last three elections (2004, 2000, 1996) show the opposite trend from the one he proposes. The slower the economic growth, the more votes received by the incumbents.

    This micro-trend is unlikely to be statistically significant, but it makes me wonder if modern influences (e.g., the war on Terror) may be having a stronger effect than in years past.

    Also, even if you go back as far as 1988, there is still no positive correlation between the two variables. You have to go back quite a long ways — the late 70s and early 80s, almost thirty years! — to make the case he’s making with this graph.

    So, I continue to think the conventional wisdom is worth about what it was four years ago, and four years before that. Which is to say, it’s worth nothing.

    Joshua Zader  ·  Dec 23, 2007 at 1:38 pm  ·  Permalink
  • I think the problem could be using average economic growth over the previous 4 years. I think voters care about what is happening NOW rather than being so generous as to include the entire term.

    If you think about it that way, it is consistent with Bush 41 losing in 1992 – as the economy was very weak back then. And it’s consistent with Bush 43 winning in 2004 as the economy was strong at that time.

    1980 is another classic example of the economy tanking and the incumbent (Carter) being sent packing.

    I don’t think the economy is the only thing that matters but it does matter and I’d expect to see some kind of correlation between current perceptions of the economy and voting for the incumbent.

    Greg Feirman  ·  Dec 25, 2007 at 3:35 pm  ·  Permalink

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