Posted on 02/14/2004 5:20:01 PM PST by nwrep
The highly accurate "Presidential Vote Equation" created by Ray Fair, a Yale economist, continues to predict a Bush landslide victory in November, despite several recent polls showing a decline in President Bush's popularity.
The model is updated every quarter with the release of quarterly economic statistics by the government.
The latest update to the model was made on February 5, 2004 based on data for the 4th quarter of 2003.
The model prediction is as follows:
Presidential Vote Equation--February 5, 2004
The predictions of GROWTH, INFLATION, and GOODNEWS for the previous forecast from the US model (October 31, 2003) were 2.4 percent, 1.9 percent, and 3, respectively. The current predictions from the US model (February 5, 2004) are 3.0 percent, 1.9 percent, and 3, respectively. In the previous forecast 2003:4 was predicted to be a GOODNEWS quarter, but it turned out not to be. For the current forecast 2004:1 is predicted to be a GOODNEWS quarter, so the total number of GOODNEWS quarters is the same at 3. The prediction of GROWTH, the per capita growth rate in the first three quarters of 2004 at an annual rate, has increased to 3.0 from 2.4 for the previous forecast. Given that the coefficient on GROWTH in the vote equation is 0.691, an increase in GROWTH of 0.6 adds 0.4 to the vote prediction.
The new economic values thus give a prediction of 58.7 percent of the two-party vote for President Bush rather than 58.3 percent before.
This does not, of course, change the main story that the equation has been making from the beginning, namely that President Bush is predicted to win by a sizable margin.
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The equation, based on Ray Fair's economic model has an excellent correlation percentages of two party popular votes. The only times it has significantly deviated from the November election results was in 1992 due to the presence of a strong third party.
The equation has worked as follows since 1916:
Table
Presidential Elections Since 1916
Party Actual Predicted
in Vote Growth Infl. Good Vote
Power Share Rate Rate News Share
1916 D Pres. Wilson beat Hughes 51.7 2.2 4.3 3 50.7
1920 D Cox lost to Harding 36.1 -11.5 16.5 5 38.9
1924 R Pres. Coolidge beat Davis 58.2 -3.9 5.2 10 57.9
1928 R Hoover beat Smith 58.8 4.6 0.2 7 57.3
1932 R Pres. Hoover lost to F. Roosevelt 40.8 -14.9 7.1 4 39.2
1936 D Pres. F. Roosevelt beat Landon 62.5 11.9 2.4 9 64.3
1940 D Pres. F. Roosevelt beat Willkie 55.0 3.7 0.0 8 56.0
1944 D Pres. F. Roosevelt beat Dewey 53.8 4.1 5.7 14 52.9
1948 D Pres. Truman beat Dewey 52.4 1.8 8.7 5 50.5
1952 D Stevenson lost to Eisenhower 44.6 0.6 2.3 6 43.9
1956 R Pres. Eisenhower beat Stevenson 57.8 -1.5 1.9 5 57.3
1960 R Nixon lost to Kennedy 49.9 0.1 1.9 5 51.1
1964 D Pres. Johnson beat Goldwater 61.3 5.1 1.2 10 61.2
1968 D Humphrey lost to Nixon 49.6 4.8 3.2 7 49.6
1972 R Pres. Nixon beat McGovern 61.8 6.3 4.8 4 59.8
1976 R Ford lost to Carter 48.9 3.7 7.7 4 48.6
1980 D Pres. Carter lost to Reagan 44.7 -3.8 8.1 5 45.6
1984 R Pres. Reagan beat Mondale 59.2 5.4 5.4 7 61.4
1988 R G. Bush beat Dukakis 53.9 2.1 3.3 6 52.4
1992 R Pres. G. Bush lost to Clinton 46.5 2.3 3.7 1 50.9
1996 D Pres. Clinton beat Dole 54.7 2.9 2.3 3 52.7
2000 D Gore lost to G.W. Bush 50.3 3.5 1.7 8 50.8
I would say because there was no second dip recession in 2002. As a matter of fact, two of the three quarters which the Yale Economic Model is deeming "good news quarters" were the 1st and 3rd quarters of 2002 (5.0% and 4.0% growth, respectively). Where is your alleged recession? Could it be that the economic statistics simply are not capturing the true state of the overall economy in the same manner they once did? Oh, wait...that's what I said!
Now, I don't know whether in fact that is the case. Just a couple months ago I was dismissing pessimists on the last Yale Economic Model thread and saying that I expected a 57% landslide in 2004. Now, I no longer believe that. Whatever the reason for the stifling of the recovery, it has been stifled and that's what I think matters. All I am essentially saying is that I agree with raloxk that one of the key reasons why these values have worked in the past is because such levels of growth and inflation have generally indicated higher rates of employment and income security.
For whatever multiple reasons, that has not been true the past two years and that is why I expect the Yale Economic Model will fail in 2004.
1st and 3rd quarter? What happened in the 2nd? And the 4th? Do we have a trend here of high growth, or is there sputtering going on?
I like constant-dollar numbers better, so we can watch GDP without also watching price movements mixed in.
Those look like this:
2002 01 9655.3 6.544% 2.158% 2002 02 9694.8 1.646% 3.077% 2002 03 9858.1 6.910% 4.954% 2002 04 9909.4 2.098% 4.271%
I don't understand what you're trying to do here. You already know that I know where to get these numbers. So why would you try to slip something like "1st and 3rd quarter" by us? Surely you must have anticipated that someone would know what the 2nd and 4th quarter numbers looked like as well. Selectively quoting two quarters that support your point, while pretending that the quarters in between -- which do not support your point -- do not exist, reeks of an attempt to mislead.
The entire series, going back to 1967, is here.
I don't understand what you're trying to do here. You already know that I know where to get these numbers. So why would you try to slip something like "1st and 3rd quarter" by us? Surely you must have anticipated that someone would know what the 2nd and 4th quarter numbers looked like as well.
I wrongly assumed that in your spectacular erudition and dazzling brilliance, you knew the definition of a recession. I apologize for my impertinence.
(Is job-offshoring a major issue? You respond in the negative)
OTOH, you might take a look at the Consumer Confidence survey.
Latest number is down slightly, and the "future expectations" component is WAY down, which dragged down the overall number.
The press is playing up the job-loss/job-less recovery stuff hard, and has LOTS of material to use.
And Mankew's seemingly uncaring statement on the issue does NOT help GWB.
In the manufacturing belt (WI, IL, OH, IA, TN, MI) there are lots of people who are working--at about 2/3rds (or less) of their former wage.
Yes, they have "a job."
Wisconsin recently released its tax revenue projections for the balance of 04 and the first 1/2 of 05.
Personal income tax will yield $220 million LESS than originally projected (mid-2003.)
As a result, Wisconsin will have a deficit.
This is not evidence FOR a great recovery.
To understand what is going on, one needs to know that the Labor Department collects employment data in two different surveys. The first, called the household survey, is based on telephone interviews with about 60,000 households per month. This survey is used to calculate the official unemployment rate, which consists of people not working but looking for work as a share of the labor force (those working plus those looking for work). Those not looking for work, such as retirees and stay-at-home mothers, therefore, are not counted as unemployed.The second survey is called the payroll survey and is based on the actual employment records of domestic businesses. Economists generally consider this survey to be a more accurate measure of month-to-month changes in national employment. However, there is evidence that during cyclical upturns, such as we are in now, the payroll survey misses many new business startups, causing it to understate employment growth. Eventually, the Labor Department finds these businesses and adjusts its data upward, which it probably will do for recent payroll data when revised figures are released on Feb. 6.
For some time, there has been a growing divergence between the two labor surveys. The household survey has shown strong employment growth an increase of more than 2 million jobs between Nov. 2002 and Nov. 2003 (including a statistical adjustment last January). In the latest month it showed 138,603,000 jobs in the U.S. But the payroll survey has shown anemic job growth over the same period. Indeed, between Nov. 2002 and Nov. 2003 it shows a net decline of 235,000 jobs. According to the payroll survey, there are only 130,174,000 jobs far fewer than shown in the household survey.
From http://www.nationalreview.com/nrof_bartlett/bartlett200401070854.asp
I assume, if this is correct, that the lower-than-predicted job growth (if that is the case, perhaps the data are lagging) would be owing in large part to increased productivity and extra-national employee outsourcing by domestic corporations. Would you agree?
IMHO, extranational outsourcing can be wise long term investment.
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