Political scientist Douglas Hibbs looks at two factors when forecasting presidential elections: a) per capita real disposable personal income over the incumbent president’s term, and b) cumulative U.S. military fatalities in overseas conflicts.
And he’s predicting a near-landslide win for Mitt Romney over Barack Obama, with Obama losing by about as big a margin in 2012 as he won back in 2008. Under Hibbs Bread and Peace model, Romney wins 52.5% to Obama’s 47.5%.
First, here is how Hibbs sees the “peace” part of his equation:
To project Obama’s 2012 vote I’ll make the plausible assumption that American military fatalities in Afghanistan continue running at the (politically relatively low) average quarterly rate of the past year: 95 or 0.3 per millions of population. At Election Day cumulative Fatalities then would amount to approximately 1500 or 4.8 per millions of population, which would depress Obama’s expected two-‐party vote share by less than a quarter of a percentage point −0.5 ⋅ 4.8 = −0.24%. Baring a really big escalation in the aggressiveness of fighters resisting US military presence in Afghanistan, plausible alternative assumptions about the flow of American body bags during the next four months would only negligibly affect my projections of Obama’s re-‐election prospects.
Now the “bread” part of the equation:
Consequently, growth rates of per capita real disposable personal income over the remainder of the term will be the decisive as yet unrealized fundamental factor in the 2012 presidential election. Calculations in the table 3 show that according to the Bread and Peace model per capita real income growth rates must average out at nearly 6 percent after 2012:q2 for Obama to have a decent chance of re-‐election. If the US economy experiences an unanticipated reversal of fortune with growth surging to rates not uncommon in the initial robust phase of recoveries from deep contractions, Obama could squeak out a win, as implied by the last column of table 3. However the pace of recovery from the 2008 Great Recession remains sluggish, and the famous 2009 book This Time Is Different: Eight Centuries of Financial Folly by Carmen Reinhart and Kenneth Rogoff documents how recoveries from contractions originating with the bursting of speculative financial bubbles are not V‐shaped as in garden-variety recessions, but instead are typically prolonged U-shaped affairs lasting 5 to 6 years. The univariate statistical properties of postwar per capita real disposable personal incomes indicate that the chances of weighted-average growth on the order of 6% over the one and one-third quarters remaining until Election Day 2012 are no better than 1/10.
Here is that Table #3 Hibbs refers to. It shows how much of the two-party vote Obama would get under different economic scenarios.
And Hibbs the scenarios shaded in gray as the most likely:
The protocol of the PS Election Forecast Symposium obliges me to make a specific prediction of the 2012 aggregate voting result. My reading of the tea leaves (statistical forecasts of income and output growth from formal econometric models have proven to be useless) leads me to posit that quarterly, annualized per capita real income growth rates will fall in the interval [1.2%] during the remainder of President Obama’s term. That supposition, along with my assumption that fatalities in Afghanistan will not escalate dramatically, yields a projected Obama two-party vote share centered at 47.5%, as indicated by boldface entries in table 3.
And how is Hibb’s track record?
The only postwar presidential election results not well explained by the Bread and Peace model are 1996 and 2000. In 1996 the vote received by the incumbent Democrat Clinton was 4% higher than expected from political‐economic fundamentals, whereas in 2000 the vote for the incumbent Democratic Party candidate Gore was 4.5% less than expected from fundamentals. I am tempted to argue that idiosyncratic influence of candidate personalities took especially strong form in those elections, with the ever charming Bill Clinton looking especially attractive when pitted against the darkly foreboding Bob Dole in 1996, and the unfailingly wooden Al Gore paling by comparison to an affable George W. Bush in 2000. Alas, this line of reasoning is entirely ad hoc and without scientific merit.
Reading Hibb’s entire paper, I get the sense he is not thrilled with what his model is telling him. He even mentions that he’s a big fan of betting markets, and they show an Obama win. But the model says what it says — even he kind of gently suggests Romney is another stiff, just like Dole and Gore.