[WOSG]

Have you overlooked the fact that the economy's recovery was decidedly weak due to several highly unusual factors:
1. 9/11 aftermath, especially in sectors like travel.
2. post-bubble stock market and corporate scandals in 2002, viz. worldcom and enron.
3. iraq war uncertainty, right up to march 2003.

Check the stock market - it followed that trajectory with a classic 'triple bottom' that dips on each of the above fears.

This 'perfect storm' has held growth back in 2003 and 2002. the recession was over for 28 months, but the recovery has been stifled. Then we fixed all of the above and had a bonus: tax cuts in may 2003. Since June 2003, we've been on track. Nick says wait six months ... he is right. January 2004 onwards, look at job growth. It is just beginning.

[AntiGuv]

No, I have not overlooked any of that. Quite the contrary, I am saying that extraordinary events such as those may well be why the Yale Economic Model which is explicitly predicated on the consistency of historical patterns may not be applicable in 2004. An empirical model such as this cannot account for extraneous factors, and so when these factors are such as to render the values meaningless, the entire Model is consequently meaningless.

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.

[AntiGuv]

I should note also that part of the reason I no longer expect a 57% Bush landslide win is because two months ago I was assuming that Howard Dean would be the challenger..