Reuters reports that Ray Fair, a Yale University economist who has been predicting elections with remarkable accuracy over the last several decades, is calling for an Obama victory on November 4. How so? The economy is in the tank. And his model predicts that a strong economy benefits the party of the incumbent and a weak one is great for the challenger.
Fair's model predicts Obama will win 52.2% of the vote to McCain's 47.8%, according to Reuters. And that's based on a relatively optimistic set of economic assumptions. In April, Fair ran the numbers assuming U.S. economic growth of 1.5% and a 3% rate of inflation. But in the fourth quarter of 2007, GDP growth was revised to a negative 0.2%. And despite 0.9% growth in the first quarter and 1.9% growth in the second quarter, it would not surprise me to see those numbers revised into negative territory. Meanwhile, inflation, most recently roaring ahead at 5%, is way above Fair's prediction.
Another similar model developed by Macroeconomic Advisers -- which Reuters reports has correctly predicted the winning party 12 out of 14 times -- uses more recent data to suggest that in light of the dismal economic conditions McCain will get 45% of the vote in November. Who knows whether these models will work for this election? In the meantime, they suggest that the worse the economy gets, the better it is for Obama.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter











Reader Comments (Page 1 of 1)
8-03-2008 @ 8:58PM
Sam said...
I hope that this is one of the times that these pollsters are wrong. Everything is cyclical and I am fairly certain that the economy will rebound. I however fear that if Obama is elected President and he tries to implement his "Pie in the sky" ideas, the country will sink into a deep morass. To implement most of his ideas, there will have to be massive tax increases. I will be willing to bet my last dollar that the ones who will get screwed over by the these tax increases are the middle class.
The young who presently support Obama have nothing to worry about now, but when they get into the workplace, they will rue the day that they voted for him.
8-03-2008 @ 9:21PM
Ron said...
These numbers are from several months ago. Professor' Fair's system now shows McCain gaining ground, something Reuters also didn't mention. Fair's model has been within 1.6% accuracy for the last fifty years, as long as you subtract Bill Clinton's first election. That said - that makes this a neck and neck race. And that speaks poorly for Obama, running against a party with a term term 'lame duck' president.
http://fairmodel.econ.yale.edu/vote2008/vot0708.htm
8-04-2008 @ 12:10AM
neil said...
Hes an Idiot .....those that can DO those that cant Teach WRONG albeit
Mccain in 08 as USA voter are not as stupid as the professor thinks
8-04-2008 @ 12:18AM
Sarah said...
I would like to see someone of a SOUND MIND in the White House. So that EXCLUDES John Mc Cain. He is A TIME BOMB that would explore in the face of CRITICAL THINKING,and I FEAR for the FUTURE of my children under his leadership.
8-04-2008 @ 3:34AM
warren garrison said...
I don't think any black person could possibly become more upset as I do when I see footage of the atrocities that blacks suffered in the past. And so when Michelle Obama said that for once she was proud and everyone jumped her for it, I said to everyone I knew, "well, you try working and being a part of this country, go to vote only to have dogs put on you, hosed down with high pressured hoses, and beaten by the redneck bastards that claim to serve and protect us and I bet you wouldn't even be as nice as she was". Still, I have never gotten a worse feeling about a person who could become top dawg in this country than I have gotten over Barack Obama. I know there are a lot of spineless individuals who call themselves conservatives and they claim to love this country so much and yet they'll sit on their unproductive asses and watch a mere handfull of liberals almost remove Christmas from this country as we have known it all out lives. They'll sit on their ass and watch one miserable sick godless woman, who by the way ended up dead in a vacant lot, remove prayer from our schools. They'll sit on their asses as 100's of thousands of illegals pour into this country each month and they say nothing about it to the right people even though they might bitch to a close friend. But surely there are enough people out there who have fought or have friends and relatives who have fought and died for this country who realize that if this man gets into office the first order he will issue is to burn ALL American flags, and destroy all lapel pins or items that show the flag. Had I heard some report that, "you know, Obama use to go to a church where the pastor spoke out against America, cursed it, damned it, but he got up and walked out one day and said that church wasn't for him", I would sincerely respect the man. BUT, he didn't. If Mr. Wright damned the actions of America and the way it's leaders have stood by and allowed black people to be treated as a black man, I'd be right there in his corner BUT as a minister, he more than likely has damned himself since he is supposed to be teaching love and forgiveness. It came to me the other day that this is nothing but a Trojan horse being pushed into the city. But you know what? Unlike that story where one of the greek men claimed he had been left behind and swore to the people of Troy that the horse was nothing more than a gift and convinced them to pull it into the city so the soliders inside could come out at night and slay the people as they slept. The horse is being pulled into America but no one is being quiet in the horse, the enemy is laying out right in front of their enemies their plan and what they are going to do to them as they sleep. THIS IS REALLY REALLY SAD!!!
8-04-2008 @ 5:55AM
al coholic said...
Pity the winner of this election, whomever he might be. If there is one lesson to be learned from history it is that you cannot have "guns & butter" at the same time without paying a future dear price.
When LBJ tried it during the Vietnam War it resulted in years of stagflation and financial suffering. I hate to say it but it may take many years for us to get over it now.
8-04-2008 @ 6:49AM
bob said...
I have seen these polls all my life. Bah, when America goes to the polls, it will be economy and security, that will translate to Mccain. We've had excellent security, we had good economy until 2 years ago, wasn't that when that wonderful demo congress came in?
8-04-2008 @ 7:01AM
Warren said...
"We've had excellent security, we had good economy until 2 years ago,"
What the hell? Seriously, what?
8-04-2008 @ 5:48PM
Jaben said...
@Sam
Do you have any understanding of how much debt the Bush administration has created the last 8 years? You also realize that it has to be paid for somehow. McCain's solution is to lower taxes for the upper 1% and a tiny bit for everyone else.
He says "I will balance the budget" -- yet says he will lower taxes -- just like Bush did. Bush didn't balance anything. In fact, we have the biggest deficit ever projected for next year: roughly $500 billion dollars. (Enough to have universal healthcare, and free higher education for all.)
These incredibly terrible spending practices work very long. The more you borrow, the more you have to pay back, and the more interest you have to pay. America will soon be paying all tax dollars to interest payments -- and all government programs will have to be cut. This is not good news -- the government will no longer be of the people and by the people. We'll be slaves to our own debt -- the worst possible outcome for this country imaginable.
And this isn't because of entitlement programs. Social Security pays for itself RIGHT NOW. You know what doesn't pay for itself? You are correct -- the incredibly misguided adventure called Iraq. To the tune of 3 trillion dollars.
Obama will raise taxes on the upper 1% (I'm sure you're not one of them) and actually lower taxes on all other tax brackets.
History has shown that the middle class benefits under democratic administrations. History shows that the upper classes (upper 1%) benefit under a Republican administration.
You are being lied to by the upper 1%. They run the current government, Fox News (and other news) and your wonderful conservative talk radio. They tricked you into voting against your own best interest. This country could be so much better -- if people would stop listening to the fear and hatred folks. They are the ones who steer you wrong.
8-04-2008 @ 11:13PM
anna said...
Some of you assholes are so entrenched, grossed out by your racism you'd rather a white old fool sit in the white house than accept someone who has the greater potential. I hope that Obama loses because America doesn't deserve him. Let a white person clean up this mess. The world is changing and you won't so I hope you all choke on your racist regurgitated vomit. You sicken me.
8-06-2008 @ 11:39AM
Wayne said...
Republicans are in much trouble, McCain is a joke, just another BUSHie.
8-16-2008 @ 12:10PM
Sam said...
I just can't believe how stupid americans are. McCain will will simply because he is white and will manage to fool people with his tough talk and ads for the brainless. Americans don't deserve any respect. They have the chance to elect an intelligent man but no, it's all about skin color. Stay with good old white McCain who can't even use a computer.
9-07-2008 @ 10:52PM
Ames@stcaustin.com said...
McCain will win. The American people will never put a man in the White House who sat in a church for 20 years that was run by a pastor who hates America. The Democrats can dream all they want. When individual Americans are in their voting booth and they can go with either a patriotic American or vote for the man married to Michelle Obama, they will chose McCain. Any man that has a pastor who is a complete racist against the majority of Americans is not fit to be the Commander in Chief. The American people understand this. Of all people, Obama himself should recognize this. After all, isn't it Mr. Obama who keep telling everyone that "words matter?"