The fundamental things apply

According to the Washington Post, an economic forecasting firm called Macroeconomic Advisers is about to release a report that, using various key economic indicators, projects a victory of more than 10 percentage points for the Democratic presidential nominee. This is the same margin I projected with my “nose” two months ago.

This sort of analysis doesn’t take into account the real, live nominees. As I noted in my May post, once you replace the “dummy” candidates with Obama and McCain, it’s not difficult to see the race tightening. McCain is held in higher esteem than the average presidential nominee, and Obama’s lack of seriousness is becoming increasingly evident. But a 10 percentage point advantage, if that’s really what the “fundamentals” deficit is, seems like a lot to overcome.

SCOTT adds: Reader Abu Galdsher points out that Scott Rasmussen’s daily presidential tracking poll shows McCain trailing Obama by a statistically insignificant margin. Coincidentally echoing the heading of this post, Rasmussen comments that “the campaign remains surprisingly competitive in a year where the fundamentals so heavily favor the Democrats.” Mr. Galdsher notes the competitiveness of the race “…despite McCain’s god-awful campaign. Despite the economy. Despite the war. One point!”

JOHN adds: I haven’t tried to dissect the “fundamentals,” but I think it is highly unlikely that Obama will win by anything like ten points. The last time a Presidential election was decided by a double-digit margin was 1984. Of the last six Presidents to be elected by ten or more points, five were Republicans: Eisenhower (twice), Nixon and Reagan (twice). The only Democrat since Roosevelt to win by double digits was Lyndon Johnson, under the unique circumstances of 1964.

To win by 10, Obama would have to do better than Bill Clinton did against Bob Dole. No doubt, the tide has been flowing in the Democrats’ direction over the last two or three years, but for Obama to win by 10 would require a major realignment in the electorate. The closest analogy to this year, I think, is 1976, when the Republicans were in disgrace, the economy was in the tank (misery index of 13.45 compared to around 10.0 today), the stock market was below where it had been ten years earlier, and the Democrats nominated a little-known, lightly-qualified candidate. Jimmy Carter beat Gerald Ford by two points.

PAUL adds: Just so there is no misunderstanding, I’m not predicting that Obama will win by 10 percentage points. What I’m suggesting is that an average strength Democrat could reasonably expect to defeat an average strength Republican by that margin this year.

Since we probably don’t have such a contest, my suggestion can’t really be tested. But there’s nothing implausible about a party losing a presidential election by 2 percentage points in one cycle and then winning in the next cycle by 10 percentage points. We’ve seen comparable or much larger swings in our lifetime (e.g. 1960, 1968, 1976, 1980, 1992). If you throw in 2000 (8 point swing), you’ve included every election since 1960 in which power has gone from one party to the other. There have also been comparable swings in elections where power didn’t change hands (1964, 1972, 1984 and 1988). If you include these, you’ve covered nearly every presidential elections during this 44 year period.

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